Free for a Fee

This week: A snapshot look at how the surge in infringement suits by patent-holding companies is causing big woes for small companies, and potentially affecting the ability of many people to engage in a popular pastime.

Creating and sharing images—drawings, paintings, photographs—are among the most ancient of human activities, and throughout history, technology that makes that sharing possible has been embraced as rapidly as it appears. Today, that technology takes the form of software applications for computers and cell phones.

That all helps explain why the collection of scrappy entrepreneurs who run small and medium-sized photo-sharing companies didn’t always think about patents as they built up their businesses.

But patents are certainly on their minds now that they’ve been sued for infringement by a company they’ve never heard of, in a place they’ve never thought about, in a case that illustrates how the surge in lawsuits by patent-holding companies isn’t just taking a bite out of big companies—it’s hitting small businesses too.

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By Eric Goldman

Stratton Faxon v. Google, Inc. (New Haven Superior Ct. complaint filed May 27, 2009)

Today’s lawsuit combines two trends:

Trend #1: Lawyers-as-plaintiffs suing Google for their own account. I don’t have a complete inventory of these lawsuits, but other examples include the Field, Feldman, Person and Bradley lawsuits. Ironically, I believe all of these lawsuits were shot down in inglorious flames–lawyers-as-plaintiffs often seem to do even worse than other plaintiffs.

Trend #2: Lawsuits over Google AdWords, Heck, two were filed earlier this month (the Firepond and John Beck lawsuits).

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What is going on in Canada? This week, a prestigious research group recalled a series of intellectual property reports that were highly favorable to copyright holders—and appear to have been plagiarized. And the Business Software Alliance admitted that its Canadian software piracy numbers were “estimates”—no surveying had been done in the country.

Irony alert

Both discoveries were made by law professor Michael Geist, a one-man IP wrecking ball. First up was a report from the Conference Board of Canada, a nonpartisan research group that was asked to produce a report on the digital economy. When the report in question came out, the press release trumpeted, “Canada seen as the file-swapping capital of the world.”

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It’s a well-known story by now: Europe, the US, and plenty of other countries have made it generally illegal to circumvent DRM, even when users want to do something legal with the content. Sure, it sounds bad and Ars complains about it all the time, but come on—do anticircumvention laws really prevent real people in the real world from doing real things with their content? Or are the complaints largely dreamed up by copyleft activists who would like nothing more than to see the term “intellectual property” disappear into the tentacled maw of Cthulhu?

According to the first empirical study of its kind in the UK, by Cambridge law professor Patricia Akester, it’s the former. DRM is so rage-inducing, even to ordinary, legal users of content, that it can even drive the blind to download illegal electronic Bibles.

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