The Register: Kelly Fiveash highlights a recent intellectual property agreement between software giant Microsoft and tech titan Panasonic in her recent piece, Microsoft inks IP licensing exFAT deal with Panasonic. She writes:

Financial terms were kept characteristically quiet in what is Microsoft’s second IP handshake in the past week, following a cross-licence patent pact with Amazon on Monday.

Under the agreement Microsoft will grant Panasonic access to its exFAT file system.

“This agreement with Panasonic is the most recent example of our commitment to licensing cutting-edge intellectual property to drive innovation across the industry,” said the software vendor’s IP licensing boss David Kaefer in a statement on Thursday.

Microsoft had previously licensed the exFAT technology to a number of other tech industry heavies and almost got into a showdown with GPS manufacturer TomTom over the same patent a year earlier. The skirmish was avoided “after the companies exchanged legal threats in court over patents related to the FAT formats. The pair eventually agreed to play nice, much to the disappointment to some in the open source world.” The cost of the license for Microsoft’s exFAT tech runs some $300K for camera, camcorder and digital photo frame makers, while phone, PC and network companies will pay a volume licensing fee to use Microsoft’s data formatting specification.

State Of Innovation: Ayn Rand is quite famous for her lengthy novels on the subject of capitalism and some of the more extreme positions she asserts in them. One of the topics she covers is that of intellectual property (IP) and the rights that patents give to the creators of IP. Dale B. Halling, patent attorney and entrepreneur, features Rand’s writings on innovation and patents in his aptly titled piece, Ayn Rand on Intellectual Property. Here are the major points that Halling includes in his Randian IP lexicon:

A person only has a property right in real (personal) property during their lifetime.  How can someone who is not alive own something – this would be a logical absurdity.  However, real property is passed on to the person with the next best title to real property upon a person’s death.  In the case of intellectual property, no one person has better title to intellectual property than anyone else so upon the expiration of its term it becomes free for all mankind to use.  Or as Rand explains, real property “can be left to heirs, but it cannot remain in their effortless possession in perpetuity: the heirs can consume it or must earn its continued possession by their own productive effort.”  In contrast, “Intellectual property cannot be consumed.  If it were held in perpetuity, it would lead to the opposite of the very principle on which it is based: it would lead, not to the earned reward of achievement, but to the unearned support of parasitism.”

Here, here! Why should the patent of a deceased inventor benefit his or her heirs when they had nothing to do with the invented item? Such thinking smacks of British-style estate inheritance by the first-born son, who did nothing other than be born to gain such largess. And seeing as the policy of primogenitor is one of the things the forefathers of America were trying to escape, shouldn’t our system of property rights, intellectual or other, work towards a meaningful reform of “parasitism,” as Rand so correctly calls it?

The Blog of Helios: Buried away in the USTR’s Special 301 Report comments is a particularly interesting one by the International Intellectual Property Alliance, or IIPA. The comment appears innocuous enough on the surface but as is often the case, the water that appears calmest on the surface belies the energy moving just below. Ken Starks has some thoughts on the IIPA’s comment in his related piece, International Intellectual Property Alliance – The Disconnect, and he shares them with the gentle reader to help build some understanding of why the call for Indonesia’s inclusion on the USTR IP hit list is unfounded, and sets a dangerous example. He quotes from the IIPA’s comment:

“While IIPA has no issue with one of the stated goals of the circular, namely, “reducing software copyright violation,” the Indonesian government’s policy as indicated in the circular letter instead simply weakens the software industry and undermines its long-term competitiveness by creating an artificial preference for companies offering open source software and related services, even as it denies many legitimate companies access to the government market. Rather than fostering a system that will allow users to benefit from the best solution available in the market, irrespective of the development model, it encourages a mindset that does not give due consideration to the value to intellectual creations. As such, it fails to build respect for intellectual property rights and also limits the ability of government or public-sector customers (e.g., State-owned enterprise) to choose the best solutions to meet the needs of their organizations and the Indonesian people. It also amounts to a significant market access barrier for the software industry.”

Boiled down?  They don’t want to compete with Free Software.  Several multi-billion dollar corporations afraid of a relative handful of FOSS hackers…

Seeing as Starks and his crew build and distribute computers loaded with FOSS to help underprivileged children gain access to technology and the Internet, he has a dog in the fight.

Who is going to pay for the licensing of  “proprietary software” for projects such as ours?  Dell?  Intel?  HP?  Aren’t all of these corporates involved at one level or another in the development or use of Free Software? I can promise you that we can scratch Microsoft from the list.  They have refused to help us twice, both times in 2005.

I wouldn’t put Microsoft software on any of our computers now, even with a gun to my head…but that’s not the point.  Are we, as charitable and community service-driven organizations, subject to their whim and multi-month grant requests for their software?  It would appear so.  If Free Software were to be “discouraged” by the US Government (not likely but possible) then we would either have to come to these companies with out hands out, pirate the software or purchase it.

If one small comment to the USTR’s 301 Special Report can cause so much concern in a generous organization such as Stark’s, imagine what the unspoken masses are feeling? Is FOSS such a threat to the multi-billion dollar for-profit software industry that they need to help form international policies to force open sourse out of existence?

A VC: In his timely piece, More Patent Nonsense, Fred Wilson offers some thoughts on why the recent patent granted to Facebook for “Dynamically providing a news feed about a user of a social network” is simply wrong. Here are the good bits of Wilson’s call for a jihad on all software patents, and not just Facebook’s, even if it is absolutely ridiculous:

Don’t take this post as a slam on Facebook. They have done an incredible job of executing on an entirely obvious idea. I was chatting this past week with a tech journalist who was in college when Facebook launched. She was not at Harvard but at another ivy league school. She told me that there were “facebooks” launching all over the ivy league that year. Facebook out executed everyone and took the market. That’s how it is done. But they did not come up with the idea that “we should take a facebook and put it online”. They simply did it better.

Same with social news feeds. They are the dominant provider of social news feeds in the world. Because they out executed everyone else. But not because they invented the idea. Giving them a patent on this idea is lunacy. But the whole idea of software patents is lunacy. We need to eliminate software patents and we need to do it now.

As is often the case with Wilson’s blog posts, this one’s got a lively comment section with plenty of excellent intellectual repartee to help build a healthy ecosphere around the question of eliminating patents for software. Be sure to check it out at the above linked piece.

The Wall Street Journal – Blogs: The Nathan Mhyrvold/Intellectual Ventures/Non-practicing entity (NPE) issue continues to stretch its long legs, this time with Don Clark featuring the growing trend in buying or selling patents for money rather than coming up with a patentable idea one’s self. From Clark’s Action Heats Up Among Large and Small Patent Purchasers come more details of the making of large profits via offensive/defensive purchases of patents.

A San Francisco patent purchaser called RPX, for example, recently disclosed that Intel, Palm and four security-software companies have joined its service–bringing total membership to 35 companies. The firm says it has spent $200 million in 15 months to acquire more than 1,300 patents.

Another patent buyer, Allied Security Trust, also discloses that Intel has become a member. The Lambertville, N.J., firm now claims 17 of them.

AST and RPX have different structures and strategies, but both style themselves as “defensive” purchasers. That is, they acquire patents to eliminate them as weapons that could be used against their corporate members.

They try to distinguish their mission from that of Intellectual Ventures, which has obtained about 30,000 patents and seeks to earn revenue from them. IV, of Bellevue, Wash., is frequently lumped with what are called “patent trolls”–or, less derisively, “non-practicing entities”–which make no products but enforce patents to win royalties.

Mhyrvold says that his company offered “initial investors…an ‘early bird special’ on how much they paid the firm to stay clear of its patents” but that slug-a-beds didn’t get off so cheaply: “Later contributors, like Verizon Communications and Cisco Systems, paid $200 million to $400 million.” Interesting that companies that are paying Myhrvold’s IV to keep him from suing them are called “investors” instead of “marks.” As in, a con game. Isn’t that how “protection” racket works for the Mafia? Hmmmm. Or maybe I’m just not understanding this whole “pay me not to sue you” thing. Anyone care to offer some additional insight on NPEs and their value to the patent system as a whole?

Bonus IP piece o’ the day: TTAB Vacates 2008 Fraud Ruling in Xel Pharmaceuticals Case by John L. Welch at The TTABlog.