Category: News

Prepare the foot soldiers from the Internet Nerd Rage army for this one. Apparently if you buy a subsidized Google Nexus One and “cancel your wireless plan prior to 120 days of continuous wireless service,” you’ll be charged the difference between what you paid for the device and its full retail price of $529. So at its current subsidized price of $179, you’d pay a $350 early termination fee. That fee is paid to Google, by the way, “and is in addition to any early termination fees that may be charged by your chosen carrier.”

People are upset, naturally, as the point of a wireless provider’s early termination fee is to make up for the lost revenue from subsidizing a particular handset’s selling price, and being hit with two fees seems a bit out of line. As handsets get more and more expensive, though, we start to see people (for instance) buying a $600 phone for $99, canceling the contract right away, paying a $175 early termination fee, and then selling the phone on eBay for a tidy profit.

In light of such activity, we’ve seen Verizon raise its early termination fee on “advanced devices” to $350. This is likely the same rationale behind Google’s early termination fee, except that in the end you’d pay out more than the retail price of the phone.

Here’s a snippet of the legal mumbo-jumbo from the Nexus One’s terms of sale:

You agree to pay Google an equipment subsidy recovery fee (the “Equipment Recovery Fee”) equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device if you cancel your wireless plan prior to 120 days of continuous wireless service. For example, if the full price of the Nexus handheld device without service plan was $529 USD and the price you paid for the Nexus handheld device was $179 USD with a service plan, the Equipment Recovery Fee you pay will be $350 USD in the event you cancel within the first 120 days of carrier service. The Equipment Recovery Fee is equal to the line item in your confirmation email setting forth the discount on the full priced Nexus handheld device related to your carrier service plan activation. You authorize Google to charge the Equipment Recovery Fee directly to your credit card, or other payment method used to purchase the Nexus handheld device, upon cancellation of your wireless plan. You will not be charged the Equipment Recovery Fee if you return your Nexus handheld device to Google within the 14 day Return Policy period as set forth below.

You agree that the Equipment Recovery Fee is not a penalty but is for liquidated damages Google will incur as a result of such cancellation. These damages may include, but are not limited to, loss of compensation and administrative costs associated with such cancellation or changing of wireless service provider(s), market changes, and changes in ownership. Please note that the Equipment Recovery Fee is imposed by Google and not your chosen carrier and is in addition to any early termination fees that may be charged by your chosen carrier in connection with termination of your wireless plan prior to fulfillment of your chosen carrier’s service agreement term.

[via Phandroid]

Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.

One interesting piece of news that’s been making the rounds of tech blogs and has now reached the more mainstream publications is Google’s decision to stop hosting AP content on Google News. People noticed that, as early as December 24, new AP stories, which show up on Google News through a licensing agreement, were conspicuo… (read more)

Well, as it turns out, CES really wipes one out. So we may have missed that there were some new apps over the weekend, but through the magic of the internet we’re still going to bring it all back to you. With all sorts of hot new games in play, not to mention PreCentral’s sweet new webOS App Gallery, there’s plenty of awesome app action awaiting you in the obligatory list form after the break.

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Fresh pomegranate season may have ended, but it’s still possible to cook with these fruits in their dried, spice form. Dried pomegranate seeds, also known as anardana, are a fairly new ingredient for us, but here are some of the things we have learned.

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A story in this morning’s WSJ cracks open what one government official calls a “secure system to protect these birds”: Secretive farms, classified as part of the nation’s “critical infrastructure,” where hens lay the hundreds of thousands of eggs needed to make swine-flu vaccine.

The article put us in mind of another big job for chickens seeking a career in public health: serving as a sentinel bird . It’s a job that requires some sacrifice, as this WSJ story suggested back in 2003:

Braving a burst of clucks and beating wings, a woman in a white Tyvek jumpsuit grabs a red-brown hen by the feet and holds it upside down until the flapping stops. Then she flips the bird over, tucks it between her knees, and pricks the hen’s comb with a tiny lancet, dabbing drops of blood onto a strip of filter paper to be tested for West Nile virus.

Sentinel birds got a lot of ink a few years back, when more than a dozen states established flocks as early warning systems for West Nile virus. See page 12 of these CDC gudelines for tips on setting up a sentinel flock.

Sentinel work isn’t limited to chickens; as Slate noted in 2006, flocks of ducks can serve as an early-warning system for the arrival of strains of bird flu.

Photo: Associated Press

David Rosenberg is back on housing, and has an interesting non-Case Shiller chart to show you:

Home prices: There remains a glut of at least two years supply on the market
when the ‘shadow’ foreclosed housing inventory data are included in the
calculation and home prices on average have 10-15% downside before fully mean
reverting with respect to residential rents and wage income.  This is the canary in
the coalmine when it comes to wealth, confidence, spending — and writedowns
(the market is expecting write-ups this year) in the banking sector.  The big surprise
will be the renewed turndown in the closely-watched Case-Shiller (CS) index of
home prices, which in the past two months has slowed to an average gain of
+0.25% after 1%+ advances in July-August, which gave beta-hungry investors
more reason to add risk to their portfolios.  But the CS series is a three-month
average and for all we know, the renewed price declines we expect to see may
already be occurring now.  Note that two home price series are already back in
decline for two straight months — LoanPerformance and Radar Logic.  This is key
for any sector that remotely touches the housing industry from the homebuilders,
to the financials, to the consumer discretionary group.  

Don’t miss: David Rosenberg’s key themes for 2010 — >

Join the conversation about this story »

See Also:

• Rosenberg’s Themes For 2010: The Consumer Is Still Toast, Housing Is Down, And Everyone Is Delinquent On Everything
• Case-Shiller: Housing Recovery Still Weak, October Decline Of 7.3% Slightly Worse Than Forecast
• Housing: Stable In The First Half Of 2010… Then Off A Cliff

The Harvard China Student Internship Program (HCSIP), launched in 2008 by the Harvard China Fund, is a collaborative effort involving Harvard’s Office of Career Services and Office of International Programs. Together with Chinese corporations and U.S. companies in China, the program creates transformational experiences for Harvard College students as they prepare for a lifelong engagement with China.

The HCSIP is open to all Harvard College students, and applications are due by Jan. 29. For more information, visit the Harvard China Fund Web site.

With demand gaining on supply, FoMoCo Americas President Mark Fields said yesterday that the company will ramp up production of its full-sized SUV’s. This time last year, Ford had halted SUV production so that they could move assembly to a different plant, and sales of the Ford Expedition and Lincoln Navigator rose 45% and 60%, respectively.

With a 60 day supply being the industry standard, the Expedition last month fell to a 31-day supply and the Navigator to a staggeringly low, 24-day supply.

Fields also said that Mercury is in fact slated receive a compact car based on the ‘12 Ford Focus ha twas unveiled yesterday, but that Lincoln will be receiving the bulk of the new products from this point forward as far as the two brands are concerned.

– By: Stephen Calogera

Source: Automotive News (Subscription Required)

Miep Gies, the office secretary who hid Anne Frank and her family from Nazi occupers and saved the teenager’s diary, has died, The Anne Frank Museum said Tuesday. She was 100.

Gies and other helpers provided food, books and good cheer while The Franks hid from the Nazis in a tiny attic apartment in Amsterdam for two years during the Second World War.

Rest peacefully, Ms. Gies. Thanks for your bravery……

What caused the Great Recession, anyway? Two years after it began, we don’t know. (Heck, 80 years after the Great Depression, we haven’t decided why it started, or lasted so long, or ended.) So Slate’s Jacob Weisberg went digging for answers. Just about everybody agrees that Alan Greenspan is at fault, somehow. After that, everything is up for debate.

Conservative economists–ever worried about inflation–tend to fault
Greenspan for keeping interest rates too low between 2003 and 2005 as
the real estate and credit bubbles inflated. This is the view, for
instance, of Stanford economist and former Reagan adviser John Taylor,
who argues that the Fed’s easy money policies spurred a frenzy of
irresponsible borrowing on the part of banks and consumers alike.

Liberal
analysts, by contrast, are more likely to focus on the way Greenspan’s
aversion to regulation transformed pell-mell innovation in financial
products and excessive bank leverage into lethal phenomena. The pithiest explanation I’ve seen comes from New York Times
columnist and Nobel Laureate Paul Krugman, who noted in one interview:
“Regulation didn’t keep up with the system.” In this view, the
emergence of an unsupervised market in more and more exotic
derivatives–credit-default swaps (CDSs), collateralized debt
obligations (CDOs), CDSs on CDOs (the esoteric instruments
that wrecked AIG)–allowed heedless financial institutions to put the
whole financial system at risk. “Financial innovation + inadequate
regulation = recipe for disaster is also the favored explanation of
Greenspan’s successor, Ben Bernanke, who downplays low interest rates
as a cause (perhaps because he supported them at the time) and attributes the crisis to regulatory failure.

A
bit farther down on the list are various contributing factors, which
didn’t fundamentally cause the crisis but either enabled it or made it
worse than it otherwise might have been. These include: global savings imbalances,
which put upward pressure on U.S. asset prices and downward pressure on
interest rates during the bubble years; conflicts of interest and
massive misjudgments on the part of credit rating agencies
Moody’s and Standard and Poor’s about the risks of mortgage-backed
securities; the lack of transparency about the risks borne by banks,
which used off-balance-sheet entities known as SIVs to hide what they
were doing; excessive reliance on mathematical models like the VAR and the dread Gaussian copula function,
which led to the underpricing of unpredictable forms of risk; a flawed
model of executive compensation and implicit too-big-to-fail guarantees
that encouraged traders and executives at financial firms to take on
excessive risk; and the non-confidence-inspiring quality of former
Treasury Secretary Hank Paulson’s initial responses to the crisis.

Last year, National Journal’s Jonathan Rauch wrote a killer essay on
this very topic that came to an exotic, and fascinating, conclusion.
Here‘s the quick summary: Financial innovation produced a vast network
of
complicated asset-backed securities traded among what insiders call
“shadow banks,”
or unregulated banks. Shadow banks looking to park cash where it would
hold value and earn interest created a
short-term securities market — much like a checking account. But
unlike a regular FDIC-insured checking accounts, these deposits would
not be guaranteed by the
government. So investors borrowing from
this shadow depository system had to put up collateral. And they chose
…
their asset backed securities.

Why is that dangerous? Because in the shadow banking industry, these
deposits, backed by sub-prime mortgages instead of the FDIC, acted as
money. Banks relied on it for transactions. “Subprime morgage debt had
entered the money supply.” But then the
housing bubble burst. Depositors dumped their assets to raise cash and
tried to withdraw their money, raiding the shadow depository market,
and the
money supply crashed.

And here’s Rauch in his own words:

In the so-called Quiet Period, 1934 through 2007, systemic bank runs
seemed to become relics of an unmourned past. Why? Because for about
four decades, banks’ activities were restricted to heavily regulated
ventures that were more or less guaranteed a profit — and, even more
important, because federal deposit insurance, which began in 1934,
assured depositors that their savings were safe.

Financial innovation, however, could be delayed but not denied.
Around the walled garden grew a forest of new competitors and products.
Money-market funds and other investment vehicles took deposits without
offering federal guarantees. In a process known as securitization,
investment banks converted predictable streams of income, everything
from mortgage payments to health club dues, into securities that
investors bought eagerly. Derivatives — securities based on other
securities–arose to spread risk and hedge against volatility. In time,
shadow banking, as the new institutions and instruments were
collectively called, rivaled and even eclipsed old-fashioned commercial
banks.

The firms and major financial players making all these trades needed
to park cash where it would hold its value and earn some interest, yet
be accessible on demand. In other words, they needed the equivalent of
checking and savings accounts, the “demand deposits” that banks
traditionally provide and that form the backbone of the money supply.
But no insured depository could begin to cope with the trillions of
dollars involved. And so shadow banking developed what amounted to its
own depository system, a short-term securities market called the “sale
and repurchase,” or “repo,” market. It is immense. Gorton figures its
size at perhaps $12 trillion, but he says no one knows for sure.

“It’s important to see that this is a banking system,” Gorton says. But it is like a 19th-century
banking system, because repo “deposits” are uninsured. Unable to rely
on a federal guarantee, depositors who park their holdings there
require that the borrower put up something of value as collateral.

Treasury bonds, because they are safe and liquid, are the ideal form
of collateral, but there were nowhere near enough of them to meet the
demand. So asset-backed securities — those packages of safe-looking
income from mortgages, auto loans, and all the rest — were pressed
into service as collateral. In time, the better grades of subprime
mortgage-backed securities were mixed into the blend, and they, too,
won acceptance as collateral.

All of these asset-backed securities were sorted and re-sorted,
combined and recombined, sold and resold, until, as Gorton writes,
“looking through to the underlying mortgages and modeling the different
levels of structure was not possible.” Users could not independently
assess the value of mortgage-backed collateral any more than your
grocer can independently assess the solvency of your bank before
accepting your check.

You can see, perhaps, where this leads. Repo is a form of money
because it acts as a store of value and financial actors rely on it to
conduct transactions. But instead of being backed by a federal
guarantee, it was backed by, among other things, subprime mortgages. In
this way, without anyone paying much notice, subprime mortgage debt entered the money supply. As
in the 19th century, the economy had become dependent upon a form of
bank-issued money that was not federally guaranteed and that was not as
stable as it appeared. Unlike in the 19th century, however, no one
understood how vulnerable the system was to a panic.

Calamity then struck, as it had before. First, the unexpected
decline in housing prices tanked the subprime market. Repo depositors
knew that most collateral was sound, but they had no way to know if
their own holdings were safe; so in 2007 they began what amounted to a
run on the repo system, effectively withdrawing their money. To raise
cash, repo depositories dumped assets, further depressing collateral
values and starting a tailspin.

In September of last year, when the failure of Lehman Brothers, the
mighty investment bank, convinced investors that no one was safe, the
crisis turned into a meltdown. As the repo market “virtually
disappeared” (in Gorton’s phrase), the money supply crashed and the
economy began to suffocate.

Wolin-Levin Celebrating 60th Year in Business

Bob Levin, president of property management firm Wolin-Levin Inc., was recently honored for his decades of service in the property management business by receiving the annual Outstanding Leadership Award and the new Property Manager of the Year Award presented by Condo Lifestyles magazine at its 2009 State of the Industry Seminar.

Approximately 100 people attended the luncheon and award ceremony, held Dec. 10 at the Chicago Cultural Center.

Presentations were made focusing on the financial and legal issues facing community associations and property management organizations in the Chicago area.

Levin has been a key figure in the industry for more than 30 years. He worked for a Fortune 50 company and a management-consulting firm before joining family owned Wolin-Levin Inc. in 1978.

Under his leadership the company has expanded greatly and now has approximately 20,000 managed units in more than 200 properties throughout Chicagoland – with a focus primarily on high-rise condo buildings in Chicago within a mile of Lake Michigan.

Levin was chosen for the honor because he and his company “have been a fixture in Chicago condominiums since the beginning of the condo boom,” explained Michael C. Davids, editor and publisher of Condo Lifestyles, when presenting the award.

“And because of the length and reach of Bob’s involvement in condominiums, he has had a unique and significant impact on improving professionalism and the level of education of so many others in this field.”

Levin is a Certified Property Manager (CPM®) and licensed real estate broker in the state of Illinois.

After joining the company his father founded 60 years ago, he was instrumental in developing Wolin-Levin’s presence in the condominium and cooperative management segment.

Wolin-Levin has set itself apart from other property management companies by using cutting-edge technology to facilitate communication between property managers and community residents, maintaining transparency through building-specific record keeping, and using green initiatives to save clients money while increasing building efficiencies.

Wolin-Levin concentrates on Chicago residential property management.

National company FirstService Residential Management, a division of FirstService Corp., acquired a majority interest in Wolin-Levin in 2004. The corporation manages more than 1 million units nationally, with Wolin-Levin serving as its Chicago affiliate.

Wolin-Levin is able to leverage and offer significant benefits to its clients through the buying power and competitive national contracts FirstService provides.

After MySQL founder, Monty Widenius, started an aggressive campaign against Oracle’s bid to buy Sun, the community has shown considerable support and anted up the pace with a new pro-MySQL campaign: the HelpMySQL.org website. The site is entitled “Save MySQL” and was launched on December 28, quickly catching the eye of many developers, p… (read more)

Meet Roxxxy, the world’s first butt-ugly sex robot! At the 2010 AVN Adult Entertainment Expo in Las Vegas last weekend, Doug Hines, owner and designer for TrueCompanion, unveiled a prototype of the world’s first girlfriend sex robot — complete with artificial intelligence and skin and equipped to carry a conversation….

“She can’t vacuum, she can’t cook but she can do almost anything else if you know what I mean,” Hines, who has been developing the doll for nearly 20 years, told AFP this week. “She’s a companion. She has a personality. She hears you. She listens to you. She speaks. She feels your touch. She goes to sleep. We are trying to replicate a personality of a person.”

That’s impressive, Doug, but why does she look like a Hunts Point sex peddler?

The Roxxxy is 5 feet, 7 inches tall, 120lbs, and “has a full C cup and is ready for action” (Hint, Hint). The doll features “girlfriend personalities,” including Frigid Farrah, Wild Wendy, Mature Martha, and more. Users can also built custom profiles online and even swap them with friends. Roxxxy goes on sale next week for for $7,000 – $9,000, plus a subscription fee.

For more information on how you can purchase a Roxxxy of your own, visit TrueCompanion.com…..

Belgian prosecutors have charged three Britons and a Dutchman with failing to pay 3 million Euros on carbon trading transactions, according to a report in The Guardian.

This fraud is terrible news for supporters of a U.S. cap-and-trade system.

The “carousel fraud” involves buying credits in one country that allows credits to be sold without charging Value Added Tax (VAT) then selling to buyers in another country that requires VAT to be collected.

The sellers then disappear without forwarding the tax to the government. Similar fraud has cost the European Union an estimated 5 billion euros in the last 18 months.

The problem is unique to the EU’s Emissions Trading Scheme (ETS) because the taxation regimes are not harmonized across different countries. Thus, fraudsters can exploit differences in the taxation rules.

This would not necessarily be a problem if the U.S. introduced a cap and trade plan – which would be governed by one set of taxation rules – but could create enormous problems in an international scheme.

More to the point, gaming of the system also validates the anxiety many people feel about creating a huge, new financial market to curb emissions.

Public trust in Wall Street is at a low-ebb and voters are wary of giving financial firms an entire new market to manipulate in both legal and illegal ways.

The EU believes it has found a way to stop the VAT fraud. But the damage to the EU’s coffers, and cap and trade’s image, has been done.

Joe Romm has an important post about the folks down in Texas who are constantly trying to bring the textbooks into line with ideology. This is something we usually think of as affecting the evolution issue, but no–climate change is also a topic that is being watched closely by the watchers of educational content.

Romm himself is linking a Washington Monthly piece called “Revisionaries,” which reports the following:

A similar scenario played out during the battle over science standards, which reached a crescendo in early 2009. Despite the overwhelming consensus among scientists that climate change exists, the group rammed through a last-minute amendment requiring students to “analyze and evaluate different views on the existence of global warming.” This, in essence, mandates the teaching of climate-change denial. What’s more, they scrubbed the standards of any reference to the fact that the universe is roughly fourteen billion years old, because this timeline conflicts with biblical accounts of creation.

The strategy is identical, isn’t it? “Critically analyze” evolution, “critically analyze” climate change…and smuggle bad science into the classroom to sow doubt and confuse the kids. Frankly, I am wondering these days if climate denial may not be growing into an even more massive phenomenon than evolution denial in the US. I doubt it has the potential to be as long-lived. But the intensity of it, which I feel every day now, simply dwarfs what’s going on in the evolution fight….

I used to read a blog by a patent attorney named Gene Quinn. Sometimes it had some interesting posts on it with a strong pro-patent viewpoint. But too often he would just become a parody of the pro-patent position, making declarations that something was fact, when the evidence suggested otherwise. Late last year, he insisted that it was impossible for a patent attorney to think patents harm innovation. He also insisted that it was an economic impossibility for patents to not help innovation. When we presented an awful lot of evidence to the contrary in the form of numerous studies that looked at the historical evidence and made clear — from a variety of different angles — that patents do not lead to greater innovation, Quinn responded by saying he didn’t care about what the studies said, because he just knew that patents increase innovation based on what he saw. Consider it faith-based economics. Evidence be damned. Gene Quinn is right because he just knows it (oh yeah, and he profits from it too…).

Anyway, after that, I realized there was no reason to read his blog, but reader Brad points us to an absolutely stunning argument that Quinn has now made, saying that true innovators want patents, and only those who don’t innovate don’t like patents:

If you are against software patents you are not an innovator. Innovators want patents, those who do not innovate and copy others do not want patents

This was in response to Ian Clarke, a well known software developer, entrepreneur and someone who has argued strongly and articulately against software patents, pointing out in great detail, the harm they have done to the software industry. Clarke does a good job explaining his position, but Quinn doesn’t bother responding to Clarke directly, but makes up strawmen. For example, Clarke points out that he’s raised plenty of money from investors, despite being against software patents, and Quinn mocks the idea that any VCs would fund businesses without patents:

I would love to know who the investors are that are willing to provide funding for a software business that relies on trade secrets and copyrights. Naive investors like that would certainly be interested in companies with real protections. Simply stated, software cannot be adequately protected with copyrights, which I am sure you know or you should know. Likewise, trade secrets do not offer much, if any, protection for software. If the software is released the trade secret would be lost because anyone can get to the code.

Note that Quinn is both ignorant of the factual situation (many of the top venture capitalists around are against software patents — and Clarke lists out his investors, which include top tier VC firms) and then twists the story to something that Clarke did not say. Quinn seems to be of a belief that the only way a software company can be in business is with some sort of gov’t backed monopoly to “protect” them. It has apparently not occurred to him that businesses survive not based on protections, but on selling products and services, and you can do that without protectionism. In fact, here in the US, we tend to recognize that competition is a good thing. I’m not sure why Quinn is so against it. Oh yeah, as for VCs against software patents, we’ve discussed quite a few.

Clarke does a nice job responding to Quinn. Quinn — as he has done to me multiple times — refused to let Clarke’s post go live until Clarke complained and noted that it wasn’t worth responding any more, leading to this next extraordinary claim from Quinn, who seems more like a parody of the pro-patent side than anyone arguing seriously:

Everyone knows that those who don’t want patents just want to copy the work of others. Copyists are not innovators, they are a drag on everyone. Free riders are not innovators. I know you understand that, and suspect that is why you are leaving, having been defeated by logic and rational arguments. Sorry if I hit too close to home. Sorry also that you couldn’t stand up to the debate and chose to run and make false allegations in the process. Not surprising though.

Funny thing? Those are the same arguments used for ages before Quinn came along. He’s copying them. According to his own logic, he’s a drag on the system. Also, he went to law school at some point, and was given a bunch of information that he has copied into his brain. Free rider!

The debate goes on and Quinn continues to make fantastical assertions like the following:

Innovators by definition create things that are innovative, which means they are new, non-obvious and otherwise unique. Those who engage in endeavors that are unique do not begrudge others from obtaining protections themselves, because if what they are doing is really unique there is no skin off their nose for others to obtain protections. An innovator who concerns themselves with what others are doing and demands they stop obtaining patents are really only logically saying one thing. You shouldn’t get a patent and patents shouldn’t be issued because I want to copy you and I don’t want you to be able to prevent me from doing that.

This statement has so little connection to actual innovation (especially as done in the tech world) that it’s difficult to think what Quinn is possibly referring to. As anyone who has been near real innovation knows, actual innovation isn’t created in a vacuum. It involves building on the ideas of others and doing more with it — the proverbial standing on the shoulders of giants. But, in Quinn’s mind, apparently, standing on the backs of giants is free riding. He goes on in that same comment to accuse Ian of lying in claiming he has raised $15 million from some of the top VCs in the world. This is stunning. Ian is not lying. The facts are not hard to find. Ian is well-known and well-respected, as are many of his investors. Quinn did, of course, try to leave himself an “out” by saying that if Ian is not lying, then his investors are “the most naive investors in the world,” yet fails to note that they are actually some of the most well respected and successful VCs in the world. But, apparently that’s meaningless to Quinn.

Later on Quinn again makes the usual fallacy of claiming that any startup that is truly innovative and doesn’t get patents would go out of business quickly, because a big “Mega Corp.” would just copy the tech and the startup would go under. Of course, once again, the historical evidence suggests otherwise. Does this happen? Sometimes… but rarely. The reasoning is obvious if you’ve actually been around innovative companies. First, if your idea is truly innovative, Mega Corp. doesn’t recognize it until its too late. In typical innovator’s dilemma fashion, they dismiss truly innovative products as being “not good enough.” By the time they realize what’s happening, it’s usually way too late to jump on the bandwagon. Second, innovation is not a once-and-done thing, but an ongoing practice. If big Mega Corp. just copies, by the time they’re done copying, the innovative startup is already innovated past that and big Mega Corp. is just playing catchup. Third, by that time, the innovative startup has the reputation as the innovator, and people trust them more than the Big Mega Corp. doing the copying. We’ve seen this over and over and over again. Gene apparently missed it.

From there, the conversation spirals further and further out of control. If you ever want to see what the extreme pro-patent position is, then this is it. It presents no evidence at all (nowhere in any of the posts does Gene back up a point with evidence, but he does, repeatedly insist that “everybody knows” or something is “100% true” when neither is the case). When actual evidence proving him wrong is presented, he either ignores it, pretends it says something different than it does, or blatantly says that the evidence itself is a lie. Even if you believe in patents (software or otherwise), Gene Quinn is making a mockery of the pro-patent argument by arguing such things and ignoring any and all evidence that proves him wrong. There may be legitimate arguments in favor of patents out there, but Gene isn’t doing that side any favors by making himself look so ridiculous in the face of strong arguments to the contrary.

Obviously, I’m pretty strongly in the opposing “camp” on the question of patents, but even I can admit that, as with any monopoly, patents create two countervailing forces. The first increases activity in an area due to the promise of monopoly rents and monopoly profits. The latter decreases activity in an area due to the limitations created by a monopoly, and the power for such monopolies to prevent competition and continued innovation. The question is which force is stronger. And I’ve read many dozens of studies and historical evidence and nearly every one points to the latter being the stronger force. I’m willing to be convinced however by compelling evidence in the other direction. However, someone like Quinn doesn’t even seem willing to admit that these two forces exist and are in conflict. I don’t see how one can argue in favor of patents without at least admitting that the second force exists and has been proven over and over again — even if you still believe that the first force is stronger.

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