Thursday, December 29, 2005

Robotic structures

One of the big engineering advantages of outer space is that microgravity allows for very large structures. First, however, one must figure out how to deploy the structure. Here's an interesting new approach.

Patents: the problem of gratuitous elements

Alas, from what I've seen so far of the LabCorp v. Metabolite briefs, they don't hit on the biggest problem in this area, namely the problem of gratuitous elements.

I have written about how software became patentable in the United States. In a nutshell, the forbidden category of algorithms became patentable because the trivial combination of (novel algorithhm + prior art patentable subject matter) was held by the Federal Circuit to be patentable subject matter. Thus, a good patent drafter could simply added a broad prior art element such as "a device with memory" to an algorithm to make it patentable. (All digital computers are devices with memory). Adding the gratuitous element did not add to the novelty or non-obviousness of the invention, but instead served to make the claim look like patentable subject matter.

In LabCorp v. Metabolite, the claim has the pattern (novel scientific discovery + prior art assay test). LabCorp's brief argues that the claim covers a "law of nature" and is thus unpatentable. But their main argument, following dicta in Diehr, that the claim covers all practical uses of the scientific discovery, is false. Scientists and doctors are still free to discuss the scientific discovery and use it in ways that don't involve the assay test. This severely cripples science and engineering involving the discovery without a license, but it doesn't 100% eliminate it as defendant Metabolite claims. The problem is that this supposed holding of Diehr combined with the use of gratuitous elements makes the subject matter restrictions of 35 U.S.C. 101 an effective nullity. Having failed to understand the problem of gratuitous elements, Metabolite is left without a good argument and the United States Patent system is left without any effective restrictions on what kinds of subject matter may be patented.

The problem of gratuitous elements is not confined to subject matter patentability. They also occur in damage calculations. It is now common for patent drafters to add gratuitous elements to patent claims to make them cover larger markets. An example, given by W. David Westergard, is that an inventor thinks of a new hinge for a door. The patent drafter then drafts the claim (novel hinge + prior art door). The jury is thus fooled into thinking that the patentee should be awarded damages for the lost profits on doors instead of just the lost profits on hinges. Indeed, Jeffrey G. Sheldon in How To Write a Patent Application, the bible of patent drafting, recommends this strategy, giving the example of claiming a toaster when all that has been invented is the toaster thermostat. "When negotiating a license or arguing damages before a jury, it would be better to work from a high royalty base that includes the entire toaster oven."

This problem of gratuitous elements used to inflate patent damage awards is particularly severe in modern electronic devices that can contain hundreds of patented parts or software. It is one of the big motivations behind the damage reform provision in the 2005 Patent Act, which hopefully will be revived and enacted (with some recommended changes, which I will post in the future) in 2006.

LabCorp v. Metabolite briefs

Dennis Crouch has a good review of and links to the petitioner's brief and several amicus brief in LabCorp v. Metabolite. This case may impact the patentability of software and business methods. I have described in a paper how software came to be patentable in the United States, when our Supreme Court has held "mathematical algorithms" to be unpatentable subject matter.

Tuesday, December 27, 2005

The security and productivity of farms

Perhaps the two most important factors contributing to a neolithic, ancient, or medieval civilization were the productivity and security of farmland. Over these times (almost all of recorded history) productivity and security (largely, but by no means entirely, involving warfare techniques and organization) were probably the two main factors determining the ownership (or more generally control) of farmland and thus the structure of an agriculturally dominated society.

Which of these two factors were more important? Many traditional historians take it for granted that military organization (often determined by military technology) determined social structure as well as the success of a society. Thus, for example, the theory that the stirrup gave rise to feudalism. Some other historians or scientists who study history take it for granted that crop productivity, primarily determined by ecology and technology, was more important to the success of a civilization or to determining its political, legal, and economic institutions.

Neither view is correct. Farm productivity and farm security interact, and institutions are at least as important to determining that productivity and security as the reverse.

A few historians have started analyzing the interaction between crop productivity and security in a variety of detailed ways, an approach I think may shed quite a bit of light on history.

One common strategy of ancient warfare was to "devastate" enemy crops. Historian and viticulturalist Victor Davis Hanson has studied the vines, olive trees, and some grain varieties grown in ancient Greece and has shown that they could often withstand intentional destruction (burning, chopping, digging up, etc.) rather well. I further suspect that plants in most places and times were bred, not merely for their nutritional content, and not merely to withstand weeds and animal pests, but to withstand such assaults from human pests as well.

Furthermore, I hypothesize that the pattern of control or ownership of land, and thus property law (and political structure in general) will vary depending upon the interaction of agricultural productivity and security, and vice versa.

To flesh out this theory I will make some corollary "geostrategic" hypotheses about neolithic, ancient, classical, and medieval warfare:

* There are some economies of scale in protecting farmland. An obvious economy of scale is that the area (a good proxy measure for value) of farmland increases as the square of the length of boundary that must be guarded.

* There are some diseconomies of scale in protecting farmland. An important diseconomy of scale is that it becomes more difficult to coordinate ever larger armies (the knowledge problem familiar to Austrian economists) and to coordinate the tax collection needed to fund those armies.

* There is a tension between the optimal size of a farm for the application of organizational labor and technology and the optimal size for military protection. If security needs become too great, the two can become mismatched and farm productivity will fall. If this is not to occur some military coordination between landowners is needed (this may be feudal, or democratic/agrarian as in the classic Greek polis, or a wide variety of other kinds of coordination including the modern state).

* Geographic features can help protect farmland, allowing its size and organization to be optimized for productivity. Which geographic features are important depends on the scale on which farmland is defended. During many eras of history (from large-scale feudal coordination to the state) such coordination has occurred on a large scale. Thus, it may be no coincidence that two large islands which have been largely or entirely protected from invasion for hundreds of years, Japan and Britain, also had among the highest agricultural productivities per acre during that period as well as the greatest cultivation of even marginal arable lands. Italy's situation is similar being protected on one side by the Alps and three other sides by water. Italy and Japan, though often divided politically during this era, are long and thin, making disputed internal boundaries shorter. In some areas (such as the Low Countries) inhabitants went to great lengths to create water barriers between themselves and invading armies. Contrariwise, this theory predicts agricultural productivity will be lowest in unprotected continental regions. Indeed, interior continental regions easily reached by horse tended to be given over to much less productive nomadic grazing. Security constraints were probably what prevented any sort of crop from being grown.

Some of the inspiration for this theory comes from Adam Smith, in Book 3 of The Wealth of Nations. Smith pointed out that there was a large mismatch between land ownership patterns that provided the best incentives to productively use the land and laws derived from feudal protection needs. Under English law there were a variety of kinds of land ownership, called "estates." Smith advocated straight ownership called "fee simple" that allowed land to be divided among children, bought and sold, and used as collateral. The two now curious but formerly common kinds of estates Smith observed and criticized were "primogeniture," in which land could not be divided among children but had to be devised to the oldest male, and "fee tail," or restraints against transferring the property or using it as collateral. In the Middle Ages land ownership was bundled with the ability to protect the land. The law thus prevented foolish heirs from dividing up their land into portions too small to protected. These restraints also protected the tenants who actually worked the land.

Smith, living on an island well protected by the navy of a single state, observed that England was moving away from that kind of ownership and advocated getting rid of it altogether, pointing out its economic wastefulness. As evidence Smith cited large tracts of poorly cultivated or entirely uncultivated land in farms still under those feudal property law constraints. Furthermore, we have seen the importance of the ability to use land as collateral. Collateralization of land probably ocurred first on a large scale in late medieval Italy. This may be due to its greater adherence to the traditions of Roman law (in which land was divided equally among children and was freely transferable) as well as its relatively secure geography.

The crucial role of security for the history of farming may also shed light on the birth of agricultural in the first place. Hunter-gatherers were very knowledgeable about plants and animals, far more than the typical modern. It would not have taken a genius -- and there were many, as their brains were as large as ours -- to figure out that you can plant a seed into the ground and it will grow. There must have been, rather, some severe institutional constraints that prevented agriculture from arising in the first place. The basic problem is that somebody has to protect that seedling for several months from enemies, and then has to harvest it before the enemy (or simply a envious neighbor) does. Security and allocation of property rights between providers of security and providers of farm labor were the intractable problems that took vast amounts of trial and error as well as genius to solve in order for agriculture to take root.

A tamper evidence protocol from China

In "The Playdough Protocols" I described how ancient Sumerians used tamper evidence both in the form of physical seals and in the form of tamper evident numbers, in particular checksums. These are forerunners both of modern plastic sealing (used for evidence bags, in banking to store and transport cash and other valuables, to protect food from tampering, and so on) and modern cryptographic hash functions, whereby one can detect whether digital content has been altered.

Daniel Nagy has uncovered a more particular connection between ancient auditing techniques and modern cryptography. He writes how Chinese merchants, at least as far back as the 3rd century A.D., used remainders of division by prime numbers instead of checksums to ensure that nothing had been stolen from storage or cargo. The security of the Chinese system was based on what we still call the Chinese Remainder Theorem. The theorem is also used in some modern cryptographic systems based on the difficulty of factoring, and in particular the RSA scheme for decryption and digital signatures.

Thursday, December 22, 2005

Secure property titles and development



Some development economists such as Hernando de Soto and Craig Richardson have stressed the crucial role of property rights in building wealth within and developing beyond an agricultural economy. In particular they emphasize the importance of recorded titles that allow property to be reliably pledged as collateral. In the above reference Craig Richardson reports in particular about how the recent deprivation of property rights in Zimbabwe led to the collapse of that economy. His statistical analysis eliminates substantial contributions from other hypothesized causes of that collapse, such as the minor drought. Richardson cites the observations of contemporaries that despite the drought, dams in Zimbabwe remained full. Irrigated farmlands had not been planted and fertilized properly in the first place and irrigation equipment had often been looted. Richardson traces these symptoms to the lack of incentives to properly raise crops and lack of seasonal loans to fund planting, fertilization, and irrigation, both consequent of uncertain property titles.

The importance for development of being able to use property as collateral is confirmed by Western Europe's own experience, starting in the late medieval era, in developing wealth within the agricultural economy and using agricultural wealth to finance ventures beyond agriculture. During this period Western Europe, and in particular the city-states of Italy, developed a wide variety of new kinds of contracts that provided the legal foundations for business ventures, loans, insurance, and a wide variety of other structures. Insurance, for example, enabled Europeans to mount unprecedented overseas ventures of trading an empire-building. In de Soto's terminology, Western Europe coverted "dead capital" of agricultural land and other fixed wealth into the "live capital" of manufacturing and overseas ventures.

Many of these contracts were based on collateral clauses. For example, commenda contracts allowed an investor (who was "sleeping," like a creditor, and thus had limited liability like a creditor, but unlike a creditor would be paid a share of profits) to fund the purchase of ships and goods and other financing of trading voyages. As early as 1073, the recipient of a commenda investment pledged "if I do not observe everything just as is stated above, I, together with my heirs, then promise to give and to return to you and your heirs everything in the double, both capital and profit, [i.e. the capital and profit plus again as much as a penalty], out of my land and my house or out of anything I am known to have in this world." Simimlarly other kinds of business venture investments, loans, insurance, and a wide variety of other contracts used in the Italian city-states were usually underpinned by pledges of land, goods, or both.

During the late Middle Ages Europeans cities started developing municipal records for recording these "security interests" in land and chattels. These allowed future creditors to check and see whether goods or real estate were already pledged. Along with these developments came the commercial innovations that made the industrial revolution and subsequent wealth of the West possible.

In our era a wide variety of kinds of property would benefit from distributed property title databases that reduce dependence on particular government offices for the security of property titles.

Image: Instruments for surveying property boundaries, from ancient Rome. Courtesy Deutches Museum, Munich Germany.

The Justice Department vs. the United States Constitution

Two professors here at GWU, Orin Kerr and Daniel Solove have written on the legality of the President authorizing the ultra-secretive National Security Agency (NSA) to spy on U.S. citizens without getting warrants from the FISA court. For further updates check Volokh Conspiracy and Emergent Chaos.

For the President to authorize the NSA to bypass the courts and spy on citizens without a warrant is very dangerous and very illegal. We have spent most of the last century expending hundreds of thousands of lives and trillions of dollars to fight against dictatorships, and now we are accelerating down the entrance ramp to unchecked executive power ourselves.

The Justice Department argues that the President has what amounts to arbitrary powers in times of war or emergency. Here is some of what the founders of the United States wrote that flies in the face of the Justice Department's view of the law. What the founders wrote in our Constitution is, despite what the Justice Department, Bush, and Gonzales say, still the law of the land:

Article I gives Congress "all legislative power" including the right to declare war and "[t]o make rules for the government and regulation of the land and naval forces." Congress is entrusted with the basic war-making powers. It may through specific legislation instruct the executive branch, and the executive must "faithfully execute" these laws (Article II). To not faithfully execute the FISA statute that requires a court warrant for a wiretap, for example, is an impeachable offense against the Constitution. To fail to faithfully execute the Fourth Amendment, which requires a court warrant for conducting any search, is an impeachable offense against the Constitution.

"All legislative powers" means these powers are inalienable: Congress may not grant them wholesale to the executive branch. Congress could thus not in its 2001 war authorization instructing the President to use "all necessary and appropriate force" have thereby given the President powers arbitrarily to spy on United States citizens communicating overseas -- even if that is what Congress intended, which is highly doubtful. Rather, the President's powers to spy remain defined by the Congressional acts which specified FISA,including the PATRIOT Act. These acts (like the Constitution itself) require the executive branch -- that includes the NSA as well as the FBI and every other such agency -- to obtain a court warrant before spying on the communications of U.S. citizens, whether that communication is directed overseas or is purely domestic.

The very lame "process" of the President notifying a handful of House and Senate leaders about the existence of some vague wiretapping program, which cannot be further elucidated "for national security reasons," is no sort of effective check and balance and thus, not surprisingly, is not mentioned anywhere in the Constitution.

Furthermore, the Fourth Amendment to that Constitution expressly forbids searches and seizures without a court warrant, even if the Congress and the Executive both approve.

The utter necessity of checks and balances is well illustrated by what one of the main drafters of our Constitution, James Madison, said about them in Federalist #10. Madison thought that government, the ultimate in trusted third parties, should not be based on an actual particular party: “ambition must be made to counteract ambition. The interest of the man must be connected with the rights of the place," and thus "it is necessary...to divide and arrange the several offices in such a manner as each may be a check on the other – that the private interests of every individual may be a sentinel on the public rights.”

President Reagan advised us when it came to dealing with power to "trust but verify." Madison too fought to protect the United States against dictatorship. If we are wise, we will follow the Constitution and protect ourselves from dictatorship as well. As another of our law professors, Jonathan Turley, has stated, the NSA by spying on American citizens without warrants is committing felonies, and the President by authorizing these acts is committing felonies. By law, the President ought to be impeached by the House, convicted by the Senate, and thus thrown from office. Furtheremore, those conducting these wiretaps at the NSA are felons who must under law be fired, prosecuted, and imprisoned.

But while we are "at war" (with Iraq, terrorists, drugs, and so on) a large portion of the populace, including talk radio demagogues and most of the current Republicans in Congress (with a few refreshing exceptions such as Senator Sununu) genuflect to the alpha male as if he were God and to top secret agencies as if they were God's messengers. Impeachment by a Republican House and Senate? Fat chance. Dream on.

Furthermore, impeachment and removal of Bush, would, however strongly it is compelled by the law, only address the latest symptoms, not the disease. What is really required is a rebirth of learning about the our Constitution and a reformation of the Justice Department and our attitudes towards it.

What the President and the NSA are doing is blatantly illegal in the opinion of practically every legal scholar knowledgeable about the original meaning of our Constitution, and indeed in the opinion of most legal scholars of any philosophical stripe outside of the Justice Department. Over the years the Justice Department has developed its own unique view of the world in which the executive branch "in times of emergency" (which could mean just about any time) has the arbitrary powers of a dictator. Indeed, the Justice Department has been arguing, often with success, for the doctrine that the executive has arbitrary emergency and wartime powers long before George W. Bush (and even long before George H.W. Bush).

The Justice Department has thus given lip service to "rule of law" while slowly scratching actual rule of law and the Constitution to shreds. George Bush and Alberto Gonzales are merely the latest mouthpieces of a Justice Department that has been destroying what the founders fought for in 1776 and debated and ratified in 1789 -- protection against unchecked government.

We must thus reform the Justice Department and our attitudes towards that Department. The Supreme Court should never treat Justice Department as a source of legal authority. It should impute to their briefs no more credibility than it imputes to anybody's else's brief. The Justice Department is just another party with an interest -- except that this interest happens to be aggrandizing to the executive branch arbitrary power over which the only remaining legal check is the Justice Department itself.

This is the Christmas season here in the United States, a season of the story of when God came down to Earth as the baby Jesus and angels sang about Peace on Earth. If we were ruled by God on earth, we would not need separation of powers with checks and balances. Madison wrote, "[i]f men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls would be necessary.” But we are not ruled by an omniscient and omni-beneficent deity, nor by angels: we are ruled by George Bush as advised by a Justice Department that has forgotten what the Constitution means. The Christmas infant when he grew up said to "render unto Caesar the things that are Caesar, and unto God the things that are God's." Our Caesar is, like the Caesars of old, trying to aggrandize himself with powers that could only wisely be entrusted to an all-beneficient God. We thus need separation of powers and checks and balances more than ever.

And we need the Justice Department to stop aggrandizing power to itself by misleading the President and the American people about the United States Constitution. There might be an excuse of naive reliance on bad advice to forgive the President for making the claims he is making, but professional lawyers entrusted with enforcing the federal laws should know better.

Tuesday, December 20, 2005

New Zealander challenges Amazon one-click patent

Caveat: As is with every post on this blog, this post is not legal advice. If you want to make, use, sell, offer to sell, challenge, or otherwise legally entangle yourself with Amazon's patent, consult a good patent laywer (I'm not even one of those quite yet either).

Peter Calveley from New Zealand has asked the United States Patent & Trademark Office to re-examine the validity of Amazon's infamous "one-click" patent. One of the claims he is going after is Claim 11 which reads as follows:

11. A method for ordering an item using a client system, the method comprising:

displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and

in response to only the indicated single action being performed, sending to a server system a request to order the identified item

whereby the item is ordered independently of a shopping cart model and the order is fulfilled to complete a purchase of the item.

Calveley has made great use of the Wayback Machine to dig up old documents. Of particular interest is some of the old ecash(tm) documentation from DigiCash. It's of particular interest to me because way back when I worked for six months for DigiCash as a contractor.

Ecash was the first digital cash payment system to be deployed on the web. Ecash deployed cutting-edge cryptography, in particular the blind signature which was one of the earliest patents for what was basically a pure algorithm. I describe blind signatures here.

However, it's not the cryptography that's important here, but how ecash interacted with the web to order a product. The normal cycle of using ecash was as follows:

(1) Click on a link or button on a web page to place an order with a merchant;

(2) In response to this click the web server would (using a CGI script) start up the "shop" ecash software;

(3) That software would contact the ecash client to request a payment;

(4) The ecash client would pop up a screen to confirm a payment, and finally;

(5) The user would click a button on the pop-up to confirm the order, and the order would be executed (the file delivered, the wager made, or whatever).

This is a "two-click" process. However, ecash had another feature, which I personally only dimly remember, and never associated with the notorious one-click patent until now. But Calveley did make the link and has recovered the documentation for this feature. With this feature the user could alter step 4 to automate the payment. If a user trusted a merchant, he could configure the policy so that step 4 would not launch a pop-up, but would just go ahead and make the requested payment. The result was a one-click ordering process.

The combination of ecash automated payment policy with web ordering, which is at least strongly implied by the documentation Claveley has enearthed and almost surely was actually deployed and used in a one-click manner, reads on Amazon's claim 11 and some associated claims.

Calveley is the first to point out, as far as I know, that the automated payment policy setting of ecash, combined with a single click to order an item (e.g. to download a file or to make a wager), is a very good prior art reference which anticipates the Amazon one-click patent (or at least makes it even more blindingly obvious than we software engineers already thought it was).

If you have personal information or know of further documentation about this feature, or any other product or design prior to 1997 that used one-click ordering, both myself and Peter Claveley are greatly interested in collecting this information.

Also, Claveley's going forward with the re-examination is contingent upon him collecting enough donations to recoup the $2,500 USPTO fee for a patent re-examination. You can donate here.

Sunday, December 18, 2005

New book -- The Origins of Value

I recently found a delightful new book, The Origins of Value: The Financial Innovations That Created Modern Capital Markets, edited by Goetzmann and Rouwenhorst. Besides the wonderful pictures (it doubles as coffee-table book), it contains a variety of articles on the precursors and antecedents of modern trade in stocks, debt, and financial instruments. Each article is (co-)written by different noted authorities in the history of financial markets.

Just some of the highlights: tallies, chirographs, Chinese paper money (a kind of sad history paralleling the 20th century experience with government currencies), the Roman publicani, Fibonacci on present value, securitization of government debt in Venice and Genoa, the Dutch East India Company (VOC -- the first corporation whose stock was widely traded), a silly defense of John Law (making some noteworthy economic observations justifies coercing and defrauding millions?), and a perpetuity that financed a 17th-century Dutch dike and is still being paid today.

The book is biased towards finding antecedents of surface phenomena of modern capital markets, and thus is narrower than a good history of economic institutions would be. The importance of the legal idea of a corporation as a "person" is briefly noted, for example, but the many tricky legal issues this raises that must be solved before such an institution can become widely viable, the shortcomings of Roman law in this regard (despite the publicani, which are so poorly recorded in the historical record we lack many important details on their legal structure and operations) are not raised. Nor are contributions to corporate law of the Catholic Church, municipalities, and guilds in the Middle Ages (not to mention Western law schools, which first appeared then), long before Dutch East India Company, mentioned. Indeed, most of the important legal issues that must be solved to make modern capital markets possible are just not addressed, despite the vast documentary record of legal codes and decisions from Babylon, Rome, medieval Europe, and other places where such legal breakthroughs were made. Some important issues of trust and security are raised or at least hinted at, but are usually not explored in detail. The crucial role of accounting is given short shrift. There is not a lot of economic theory and it doesn't go much beyond standard financial economics, which may not provide a very good model many of the ancient, high transaction cost eras discussed.

These, however, are just grumbles about how reality always falls far short of the ideals one can envision. After all, the subtitle says "...Financial Innovations...", not accounting or legal or in general institutional innovations that made modern capital markets possible. And I don't know of any single book out there that explores so many episodes of ancient, medieval, and renaissance financial history in such a detailed and colorful way.

Copyright v. the blogosphere?

"The blogosphere has developed a set of copyright norms in an area where there is very little enforcement. These norms about the use of copyrighted material are probably at odds with existing copyright law." So writes Daniel Solove, a professor at my law school, More here (via Emergent Chaos). The same was true of the original Internet itself (e-mail, ftp, and so on), and then of the web. There would be no useful Internet and no useful web if it the copyright that copyright law says exists in almost every human-generated packet of bits was actually tracked and enforced. Copyright exists by default, simply from the human act of creating a web page, a photo, some music, and so on. Generally, under current copyright law once a work is created it may not be copied without the express permission of the copyright owner. However, if this standard were actually applied to the Internet transaction costs would be prohibitive and the Internet would not usefully exist.

Fortunately, at least some of the massive copying done by the Internet has been deemed to come under "implied consent." By sending e-mail or publishing your web page, you have given implied consent for intermediating servers and users to have their software make copies so that users can view your work. Unless you put up a "robots.txt" file that forbids it, presumably Google and other search engines are free to copy, search, and cache your web pages, without asking you despite your copyright in them. Contrary to standard copyright law, web searching like many other features of the Internet does not require the express permission of the copyright owner. To be protected against copying the author must give notice that he desires such protection, rather than the starting with the presumption that nothing can be copied. This results in radically lower transaction costs that make e-mail, the web, and web searching possible. But when an industry fights back (e.g. the music industry against P2P) the presumptions made by emerging Internet norms can be put in jeopardy, Solove points out.

The idea that copyright exists by default in a work is a rather recent one, especially in the United States. Traditionally, unless one registered the work with a copyright office, or at least labeled the work as "copyright", it was presumed that the work was placed, like almost all human communication has traditionally been placed, in the public domain. Copyright offices are now online and works mostly digital, so that registration can be made far easier. It's often easy to give notice to software regarding the status of works as with the "robots.txt" system. Under Internet norms works such as e-mails, web pages, and blog posts are not protected against copying by default. Thus, this older version of copyright law, where works are not copyrighted until they are registered or at least labeled as such (this time in a computer-readable way) is what we should return to in the Internet era, legally as well as de facto.

RIM asks Supreme Court to hear BlackBerry case

Research In Motion, Ltd. of Canada, which lost a very big (both in terms of dollars and legal precedent) case to NTP, Inc., over NTP's patent for a distributed e-mail system, has now asked the United States Supreme Court to hear the case.

The big legal issue is how to determine patent infringement when distributed systems (for example, Internet protocols) span borders.

Specifically, the issue under United States patent law is whether a system claim (or method claim) of a United States patent can be infringed when some features of the working system are located outside United States territory, but most the system elements or method steps are located within the United States, as are users. In this case a part of the system (and at least one of the steps of the method) corresponds to RIM's relay located in Canada; the other elements or steps (BlackBerries and the operations performed on them) and the users at issue are located within the United States. Another issue is whether RIM's infringement was direct or contributory infringement. A third issue is whether any international law is implicated.

If only some elements or steps need to be in a country to infringe a patent in that country, the operator of a patented protocol spanning two or more countries might be sued for infringing the same patent in two or more countries. There is a grave danger that the patent holder could recover far more damages than it would otherwise be entitled to. To avoid this, the international law principle of comity might have to be invoked to determine which country has jurisdiction. On the other hand, if all the elements or steps must be in a single country in order to infringe a patent, this leaves a loophole whereby makers of distributed systems can ignore patents as long as some of the features are located in different countries.

When the Federal Circuit, which has jurisdiction over patent appeals in U.S. patent infringement cases, first heard the case it said that the system claim was indeed directly infringed. It then reheard the case and decided that the method claim was not infringed. Their opinion was based on precedent from two older cases. The first case held that a system claim for a navigation system used in international waters was infringed because it was controlled from the United States. The second case held that a manufacturing process claim was not infringed if one of the steps was performed in Japan.

As a result of the dubious analogy of these two precedents (there are no binding cases more on-point) the Federal Circuit has somewhat illogically distinguished between a claim for a distributed algorithm and the same claim restyled as a distributed system. My own opinion is that, until a treaty is signed to say otherwise, all the elements and steps should have to be within the United States in order to infringe a United States patent. This leaves a loophole in patent law, but that's better than the injustices and international law issues that are raised by courts reaching across borders to find infringement in remote Internet servers. Furthermore, if what RIM did is considered infringement it should classified as contributory not direct infringement. RIM's customers may be "using" the patent "within the United States," but RIM itself is not. RIM would however be contributing to the infringement by providing the BlackBerries and running their e-mail relay and thus would still be liable. In other circumstances with no contributory infningement, however, it would be a grave injustice to find direct infringement in the United States because one was simply operating one element or step of the United States patent overseas.

The case before the Supreme Couret is now denoted Research In Motion, Ltd. v. NTP, Inc., Supreme Court No. 05-763, opinion below, NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005).

Read more information on this case here.

Tuesday, December 13, 2005

U.S. patent reform dead for this year

Dennis Crouch reports that, while some of its provisions might be snuck into appropriations bills, the Patent Act of 2005 itself is history. I predict that most of its provisions will be revived in 2006.

Wednesday, December 07, 2005

Another proposed amendment

Here's my own tentative proposal (besides my variations on Buchanan's proposals). It may be even more important and interesting than Buchanan's (as important as those are); why is left as an exercise for the reader. I call it the Jurisdictional Choice Amendment.

"No law shall infringe an arbitration clause in a contract, nor shall original jurisdiction of said arbitrator over any area of civil law of the United States or any unit of government therein specified in said clause be denied. The courts of the United States and of any unit of government therein shall defer to the findings of fact of said arbitrator unless clearly erroneous."

What three constitutional amendments would you like to see?

What are the top three amendments you would like to see to the United States Constitution? James Buchanan proposes three. I think something quite like the latter two are already implied by broad clauses in our Constitution, but in the coming era of "conservative" Footnote Four justices, it would be good to reify them as specific textual amendments. Here's my take on Buchanan's three proposed amendments:

1. Fiscal responsibility -- requires a super-majority vote by the Congress to run a federal budget deficit. This is a good idea, but since it would provide political cover for Congress to raise taxes, I'd add a requirement of a super-majority to raise taxes, which can be found in some state constitutions.

2. Non-discriminatory politics -- Based on Hayek's proposed amendment -- “Congress shall make no law authorizing government to take any discriminatory measures of coercion.” Actually, this is the original meaning of both the General Welfare and Equal Protection Clauses, but it would be nice to add more specificity so that our courts would actually enforce them. I think the biggest issue here is that the Equal Protection Clause is currently treated as applying various levels of scrutiny to a handful of "suspect" (race) "intermediate" (gender), and "rationality with teeth" (age, sexual orientation, etc.) classifications. What should happen is that any classification made in any law, from "violent felons" to "infants", whether it be "employees" or "employers", ought to be examined under at least the Lawrence "rationality with teeth" standard. In other words, every law ought to be independently reviewable by the courts with respect to any of the distinctions it makes between different types of people, as to whether those distinctions are rationally related to a legitimate government purpose.

3. I'm not clear on what Buchanan's third proposal is, but I'm guessing it's encapsulated by "the natural liberty to enter into and exit from agreements." During the era between the Allgeyer and Nebbia cases (1897-1934) the United States Supreme Court recognized a right along these lines, sometimes called "freedom of contract." Modern cases from Griswold to Lawrence have established rights in more intimate relationships. As I suggested in my previous post, I'm greatly in favor of freedomm of contract in principle, but it's difficult to specify what it would involve in practice. There are detailed common law precedents and statutes (the Uniform Commercical Code as enacted in the states) governing contract law. Under these precedents and statutes contracts are often found to be unenforceable, as has always been the case at common law. I propose instead the following amendment: "No right of contract or property shall be infringed with the purpose or effect of unduly burdening choice in intimate relationships or medical services, or the control of parent over child." It still needs work, and we might like to add to or subtract from the list of protected categories, but I think it's a big improvement over the vague "freedom of contract." This kind of protection is already implied (IMHO) by substantive due process cases from Allgeyer and Pierce v. Society of Sisters to Griswold and Casey. However, with justices hostile to this libertarian tradition, we may soon have an urgent need to reify these rights in the form of specific constitutional amendments.

Relationship rights and the United States Supreme Court

A couple years ago I wrote this piece which links to a number of cases in which the United States Supreme Court has protected important rights of relationship. Post-New Deal courts often make a phony distinction between "economic" relationships (which post-New Deal U.S. courts do not generally deem worthy of protection, despite many expressed and implied clauses in the U.S. Constitution to the contrary) and political and personal relationships, which are often and quite properly well-protected. An unprejudiced reading of the United States Constitution indicates that it was intended to strongly protect economic relationships as well as political and personal ones.

Personal and political relationships are not strongly protected unless related economic relationships are strongly protected. (Thus, for example, the right to use contraceptives under Griswold is phony if it does not include the right make contracts regarding contraceptives, for example the right of a drugstore to sell and a consumer to buy condoms). Furthermore, many relationships and statuses labeled "economic" have strong personal aspects. For example, owning and living in a house usually includes important personal memories, privacy interests, and community ties. I will discuss this topic more in the future.

Monday, December 05, 2005

The negative rights debate continues

My debate with Mike Huben on negative rights and the United States Constitution continues. My basic thesis is that the substantive rights defined in the Bill of Rights and the Civil War Amendments, while often defined very broadly ("rights...retained by the people," "life, liberty, and property," "privileges and immunities," "equal protection of the laws," etc.) include only negative, and never positive, substantive rights.

I have since made a second claim: that it continues to be the case that, when broadly defining basic human rights, positive rights are a very bad idea. This is illustrated by our experience with some broad clauses in the constitutions of some States and some foreign nations defining positive rights (such as a "right to health care" or "right to education"). These clauses are naive and inherently vague, have led to endless debate, and have harmed rather than helped the economy in general and the poor in particular.

Saturday, November 26, 2005

Specific cycles, trust minimization, and the kula ring

While responding to Ian Grigg's comment to my previous blog entry on kula, I came up with what is the most rigorous explanation for the two-collectible cycle that I've seen. The explanation neatly incorporates two patterns I've talked about in the past, namely (1) the literal circulation of collectibles in specific cycles to minimize non-coincidence transaction costs in a bilateral monopoly economy, and (2) trust minimization in institution design.

Thursday, November 17, 2005

Secure and accurate time sources

Broadcasts using sound or radiation, from sources such as radio, bell towers, and astronomical phenomena, must send out the same value to every receiver. A remote beacon such as a pulsar has perfect security: the access structure is any party, and its complement, the attack structure, is the empty set. For human controlled broadcasts, the attack structure consists only of the broadcaster and the access structure is any receiver.

Natural broadcasts are thus immune to the problem (known in computer science as the Byzantine Generals problem) of a transmitter sending different values to different receivers. Indeed, distributed network researchers have gone to great lengths to recreate this simple property on the Internet with logical broadcast protocols. The results are incomplete and very inefficient compared to physical broadcasts.

Nature provides clocks that are oblivious to the malicious intentions of any outside parties and many orders of magnitude more accurate than random delays that face attackers on the Internet. If critical Internet servers were synchronized to natural clocks in a secure and timely fashion, they would be immune to attacks that relied on uncertainties in timing. Here are some comparisons of the stability (error creep) in good natural clocks. Pulsars overtake atomic clocks in accuracy after about 4 months.

Oscillator Stability1 sec1 day1 month
Quartz10^-1210^-910^-8
Rubidium10^-1110^-1210^-11
Cesium Beam10^-1010^-1310^-13
Hydrogen Maser10^-1310^-1410^-13
Pulsar10^-1110^-1210^-13

Wednesday, November 16, 2005

Commercial payments at the Muslim zenith

In the 19th century spectacular Jewish burial caches ("geniza"), totalling over 10,000 items, including over 7,000 documents, were unearthed in old Cairo. Study of these items has shed light on the status of commercial payments in Islamic society (and Jews living within it) before the development of full bills of exchange, deposit banking with loans, and so in 14th century Europe. The Muslim world connected that European world to the highly evolved ancient civilizations, almost unbroken from Sumer to Phoenicia and Persia to the Muslim Caliphate. At the time of the Geniza documents Muslim trading networks spanned much of the globe, from Indonesia to Spain.

Among the finds dating from the Muslim zenith between the 10th and 12th centuries:

Cases, or sealed purses containing a specific number of coins. These had been in use since at least ancient Phoenicia for paying with specific weights of gold or silver. A widely trusted entity (coin exchangers, government mint or treasury officers, or individual merhants) would deposit a specific weight and purity of jewelry or coins in the purse, and seal it. Cases relieved the recipient of having to weigh the coins, substituting trust in the sealer of the purse. Cases remained in common use with the onset of coinage, since coins wore out, depreciating below their face value, and merchants wanted payment by weight, not face value. A widely trusted entity (exchange or government officers, or individual merhants) would deposit a specific weight and purity of jewelry or coins in the purse, and seal it. In Europe cases were far less common. This may be due to less security on the road, or because many Italian and some German cities more frequently reminted worn coins than did the caliphate. In other parts of Europe where coin quality was poor, bank notes and bills of exchange later became the preferred medium of exchange. Cases are still used in modern diamond dealing to avoid tedious re-assaying of the diamonds.

Suftaja, or demand notes at a distance. These were used, like the later European bills of exchange, to transfer money over long distances. Under Muslim law, a suftaja was a "loan of money in order to avoid the risk of transport." Suftaja had been in widespread use at least since ancient Persia. Unlike many bills of exchange, they were payable in coin (by weight) on demand rather than on a specific date. They cost a fixed fee rather than interest, although the fee could vary depending on the distance between cities without violating usury laws.

Hawala, or an order to pay. This was similar to a modern check, but more cumbersome. Hawala was an order to a third party to pay the recipient in coin. In legal form, it was a delegation of a debt from the maker to the payer, and had to be made before a notary to verify the payer's assent.

Three big differences between Muslim commercial payments at their zenith and the later European practices that gave birth to the industrial revolution and modern capitalism were:

(1) The Muslims did not combine deposit banking with loans of deposits. One consequences was no market for commercial paper by which the ongoing costs of a business (especially wages and overhead) could be financed.

(2) Perhaps related to (1), the lack of large commercial organizations such as the later Dutch and British India companies. For example, Arab trading ships , while common from the Mediterranean to Indonesia, tended to be owned by individuals.

(3) Stricter enforcement of usury laws (perhaps also the cause of (1)). This was also a problem in Europe until the 14th century Genoese, among others, developed contracts based on bills of exchange that essentially mimicked loans with interest but without overtly charging interest. The saftaja and hawala by contrast were more rigid forms that could not be varied to hide interest without attracting the wrath of clerics.

Despite the advances they later made, it's clear that Europe did not come up with their 14th century commercial innovations from scratch. Rather, Italy and the Hanseatic cities, and later the Dutch and the English, stood on the shoulders of giants -- on commercial practices, institutions, and techniques that had been evolving in the Middle East since the clay commercial documents of ancient Sumer.

Thursday, November 03, 2005

Metabolite schedule

Chief Justice Roberts has recused himself from Metabolite, so there will be eight justices deciding the case including Stevens. Here is the schedule:

Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., Supreme Court No. 04-607: Briefing schedule through January 2005; hearing February-April 2006; decision by June 2006.

Although the case may be decided on narrower grounds, it's possible that this case could have profound implications for software and business method patents, especially if Justice Stevens' methodology in the 1978 case Parker v. Flook is applied here. I describe a clarified version of this methodology in a paper on the origin of U.S. software patents I wrote earlier this year. Here is a brief summary of that methodology and of Metabolite.

Wednesday, November 02, 2005

Augustus' solar timekeeper

The University of Oregon is recreating a famous Roman sundial from 10 B.C. which doubled as a clock and calendar. A few decades earlier the Roman comic writer Plautus put into the mouth of an idle character a complaint against shared standards of time and scheduling:

“The gods confound the man who first found out

How to distinguish the hours. Confound him too,

Who in this place set up a sundial,

To cut and hack my days so wretchedly

Into small pieces! When I was a boy,

My belly was my sundial – only surer,

Truer, and more exact than any of them.

This dial told me when ‘twas the proper time

To go to dinner, when I ought to eat;

But nowadays, why even when I have,

I can’t fall to unless the sun gives leave.

The town’s so full of these confounded dials!”


As I described my article "A Measure of Sacrifice," the Romans recognized astronomical time as a measure of sacrifice, but it was the medieval bell and clock makers who gave us our modern sense of precise shared time. Precise and objectively measured time used as measure of sacrifice is one of the patterns of integrity basic to modern civilization. I describe some of the latest research in securely sharing time and determining the order of events on the Internet in "Advances in Distributed Security."

Monday, October 31, 2005

Software patents paper

In my previous entry I mentioned the software patents paper I wrote a few months ago, and I have now put it online. In this paper I describe how software came to be patentable in the United States despite the Supreme Court's holdings that "mathematical algorithms" are unpatentable.

I now reiterate the recommendation I made in the paper: the Supreme Court should reverse the Federal Circuit's holding in Metabolite based on the subject matter limitation in 35 U.S.C. 101. It should analyze subject matter patentability based on the Neilson test as applied in Parker v. Flook and clarified in the paper.

Supreme Court takes patentable subject matter case

The patent world was surprised today by the news that the Supreme Court will hear the case Laboratory Corp. of America v. Metabolite Laboratories. The case involves the scientific discovery that levels of homocysteine in the blood can indicate a deficiency in two B vitamins. But how the Supreme Court resolves the case may also have substantial implications for the patentability of business methods and even of software. We could get at least one strong opinion from at least one justice (John Paul Stevens) that from the point of view of today's patent practice would be very radical. Such an opinion, described below, would imply the invalidation not only of the kind of scientific discovery claim in Metabolite, but also business method patents and almost all software patents. It is unknown whether there are enough justices to make this a majority opinion. The profound implications of such an opinion suggest that the Court may punt and decide the issue on other grounds.

Section 101 of the U.S. patent statute (Title 35) states that patentable subject matter is limited to four broad categories: "process, machine, manufacture, or composition of matter..." This implies, presumably, that there other categories that cannot be patented. For example, "algorithms" and "laws of nature" are two areas the Supreme Court has previously stated could not be patented. (Why algorithms are nevertheless now routinely patented is the subject of a paper I wrote last year -- I will attempt to summarize below). The definition of what can and cannot be patented has changed over time. The Supreme Court typically took a narrow view, for example in the Funk Brothers and Flook cases. However, the most recent Supreme Court 101 subject matter cases, Chakrabarty and Diehr, took a broader view. Diehr led to the modern view that software can be patented. The Federal Circuit has tended to ignore the restrictive cases, allowing software to be patented and, in the 1998 State Street case, allowing business methods to be patented.

Recently the United States Patent Office decided to align itself more closely with the Federal Circuit and loosen up its restrictions on patenting business methods. But today, the United States Supreme Court surprised the patent world by saying that it will hear the appeal in Metabolite. In this case, the "inventor" discovered a law of nature, namely that elevated levels of homocysteine in the blood tend to indicate a deficiency in the B vitamins cobalamine or folate. To take advantage of this discovery, the "inventor" claimed (in claim #13):

13. A method for detecting a deficiency of cobalamin or folate in warm-blooded animals comprising the steps of:

assaying a body fluid for an elevated level of total homocysteine; and

correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.


There is nothing novel about testing the blood for levels of homocysteine. The only novel and non-obvious part of the claim is the scientific discovery, the "correlating" step. If the claim is taken "as a whole," it (and any properly written claim covering any subject matter) passes muster under Section 101. If, however, focus is put on the subset of the claim that contributes to its novelty and non-obviousness, that portion of the claim will fail as a forbideen "law of nature."

Here is how the Supreme Court in its opinion granting the appeal expressed the issue:

Whether a method patent setting forth an indefinite, undescribed, and non-enabling step directing a party simply to “correlat[e]” test results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.

This will be the first time in over a decade that the Supreme Court has heard a case on this subject -- a decade that saw the end of restrictions on software patents (despite "algorithms" being unpatentable) and the rise of business method patents.

So why can software be patented despite "algorithms" being a forbidden subject matter under Flook and Diehr? Because clever drafters have added gratuitous steps or elements so that a patent claim, interpreted "as a whole," involves more than just an algorithm. For example, if you discover a new algorithm, you can patent that algorithm running as a computer program on a "device with memory." The "device with memory" is a gratuitous element, in that it does nothing to add to the novelty or the non-obviousness of the claim. It is only there to turn unpatentable subject matter into patentable subject matter.

There is an old methodology that would have prevented such clever drafting to get around the 101 subject matter restrictions. It comes from the old British Nielson case. This methodology essentially says that, for purposes of determining whether a claim covers patentable subject matter, you don't look at the "claim as a whole," (the Diehr test), but instead just look at that subset of the claim that is the inventive contribution. In other words, look at only those elements or steps that contribute to the novelty or non-obviousness of a claim.

The Nielson test was followed by the Supreme Court in expressly in cases from O'Reilly v. Morse (yes, that Morse, the telegraph case) in the 19th century to Flook in 1978. Had Flook been followed, most software and business methods would be unpatentable in the U.S. today.

The most rational, but also most radical, way for the Court to resolve Metabolite would be a return to the Neilson/Flook test. Rational, because it's the only proven test we have for enforcing forbidden categories of patentable subject matter, whether they be "laws of nature," "algorithms," or business methods. Radical, because it would invalidate at a stroke not only the Metabolite-style discovery-based claims and business method patents, but almost all U.S. software patents as well. Justice John Paul Stevens wrote the Flook opinion in 1978 and is the only justice from that era still on the Court. So there is a good chance that we will at least get a strong dissent along these lines. However, the more likely majority outcome will, if it overturns the patent, do so on the more narrow grounds that it involves a mental step ("any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result") or that it fails the 112 written description standard.

Sunday, October 30, 2005

Automobile privacy

theNewspaper.com features news on the law and politics of driving. Especially interesting is the section on surveillance and privacy on the road.

Are intellectual property rights natural?

Tom Bell and Glenn Whitman have engaged in an interesting debate over to what extent intellectual property rights conflict with tangible property rights, and to what extent intellectual property rights, like tangible property rights, are natural rights.

Roughly speaking, Bell defines natural rights as those rights that would emerge in a "state of nature," i.e. in the absence of government law enforcement. Bell correctly observes that real and personal property rights would emerge, but argues that at least generally intellectual property rights would not. I think this is only partially true.

One poster responds with the example of symbols of office or other social status (jewelry, seals, feathers, etc.) that exist in all civilizations and most neolithic and hunter-gatherer tribes. I'd add that in England, at least, offices themselves were property rights. Indeed, English feudal and royal titles have followed for at least centuries the same inheritance rules as those for real property, and were categorized in common law as property (Blackstone described this well). Furthermore, trademark emerged in the common law, suggesting it would also emerge in the absence of the state. Academic norms of anti-plagiarism are a form of IP-like rights that we can observe today being enforced outside of government. The Domain Name System (DNS) on the Internet, and the related Internet Protocol address space, were enforced without the formal legal recognition of rights in these areas long before the DNS was discovered by the government legal system. Indeed, title in tangible property implies a similar right to an accurate public attribution of who owns what rights. The common law of defamation gives a person some further rights in the accuracy of communications of others regarding oneself.

Trademark, DNS, plagiarism, and defamation are rights of accuracy in labeling, attribution, and other descriptions related to a person. There are some natural rights to demand of another person's communications that they accurately label and attribute objects and content related to oneself in certain ways, such as ownership or origination.

It's harder, though, to argue that copyright and patent have natural rights analogs. One has to go from a right that a content or idea (as well as property and self) be properly attributed to a person, to imputing to that person a right to exclude others from communications of that content (copyright) or use of that idea (patent), despite that content or idea being instantiated in somebody else's personal property.

The predecessors of copyright were the rights of lords and bishops to control speech and writing within their domain -- a dubious origin given our First Amendment ideals. Copyright still conflicts with free expression. P2P networks originated as proposals for networks that it would be impossible for repressive governments to censor. It turns out, though, that censorship-free networks are also copyright-free networks. Copyright and censorship both rely on having “gatekeepers” who the government can coerce in order to control content. The state of nature on the Internet is copyright-free as well as censorship-free.

In summary, it's much harder to justify as natural law copyrights and patents than legal areas like trademark and defamation that involve the accuracy rather than ownership of information.

Friday, October 28, 2005

Civil liberties in the forever war

The late Chief Justice William Rehnquist entitled his book on the history of civil rights during wartime "All The Laws But One." The title is from a quote by Abraham Lincoln complaining about the judicial system's protection of the rights of alleged conspirators even during the Civil War: "Are all the laws, but one, to go unexecuted, and the government itself to go to pieces, lest that one be violated?" The "one" law being the liberty the court was trying to preserve. This is one of the most abused quotes in American legal thought, and it has seldom been abused as often as it is being now.

First of all, even from Lincoln the question was rhetorical and the rhetoric was exaggerated. Even had the North lost the Civil War, some very desirable laws would have taken a beating (e.g. laws that ended up being promulgated to ban slavery in the South), but the execution of most other laws would have gone ahead as before. Furthermore, most of the cases being adjudicated typically occurred well away from enemy lines and in late stages of the war when there was no serious danger of the South winning.

Nevertheless, Abraham Lincoln faced a far more difficult problem with the execution of the laws than governments fighting the "War on Terror" face today. When Lincoln made this quote it was plausible; applying it to today's situation is not. Despite the difficulties the Union faced, its judiciary endeavored to preserve the rights of civilians against military encroachment. One very good result of that, which should be closely heeded by Courts today, is Ex Parte Milligan. Despite a Civil War far more damaging to the normal execution of the laws than any imminent threat the United States has ever faced since, the Court held for liberty in wartime against the encroachment of authoritarian military justice.

Civil liberties take their greatest hits during wartime. First Amendment rights were violated in the United States after the French Revolution when the States were threatened by further rebellion and being drawn into the ensuing war between England and France. They were again trampled upon during World War I. The Holocaust in Germany and Korematsu in the United States occurred during World War II. Vigilance in protecting our liberties is at no time more important than during a perceived or actual "war."

Many argue that today we are again at war: the "War on Terror." If the Soviet Union had attacked the United States on 9/11, we would have gone to war with them, so the argument goes. Actually, the Soviet Union did attack the passenger airplane of a close ally, South Korea, killing several hundred people including many United States citizens and a United States Congressman. There was no serious argument at the time that this was an act of war. An act of war occurs not merely from an attack, but from an attack that seriously damages our military and threatens our territory, for example the Japanese attack on Pearl Harbor. That attack was no isolated attack for the sake of killing people and making headlines, but a very serious and, at least initially, very successful attempt to destroy American naval might and capture large pieces of its territory (e.g. the Philippines) and territory of its allies (French Indochina, Dutch Indonesia, etc.) Al Quaeda is full of some very sick people and stirs up quit a bit of torrid television coverage, but it is not a threat comparable to Imperial Japan.

Unlike earlier wars fought between governments to a conclusion, a "War on Terror" will last forever. It's like fighting a "War on Blitzkrieg" or a "War On Drugs" or a "War on Murder." Terrorism is a particularly evil type of violence that has plagued humankind since the dawn of history, and there is no sign that the evils of terrorism will be eliminated any time soon.

Professor Burt Neuborne of New York University School of Law compares the authoritarian military justice system with our civilian justice system. Some societies, such as China, have a justice system runs as if the society was in a permanent state of war -- as indeed might characterize the antagonistic relationship between Party members and the rest of society there. In the United States the justice system is bifurcated, with the authoritarian military justice system reserved for military personnel or enemies in war.

Neuborne observes that the authoritarian system that typically takes over governments during wartime makes three large errors in the pursuit of security that impact liberty: it overstates risks, it generates many false positives (i.e. persecutes people thought to be risky but actually innocent), and it is overly harsh. The current abuse of Lincoln's quote is an extreme example of overstating the risks. The Jews killed by Germany and the Japanese interned by the United States are extreme examples of false positives, and, at least of the former, of overly harsh reactions.

We must thus confront the question: are we to compromise our constitutional liberties and natural rights for the sake of a "war" of a very different kind and degree faced in Ex Parte Milligan? Assuming we are indeed at war, with an enemy that wears no uniform and may include American residents and American citizens, who gets to decide who is an "enemy combatant,” to be herded into the authoritarian military justice system, and who is just another alleged criminal with full constitutional rights? Those among us who long for more authority and destruction of liberty on the model of China, Nazi Germany, the Soviet Union, or some aspects of the United States itself during World War II, or who negligently ignore these nasty lessons of history, let their pining for security overcome them and argue that we can trust the authoritarian military justice system. In a free society it is the civilian courts, or at least courts with procedural protections comparable to the civilian courts, that ought to make that initial determination. In a free society it is the civilian courts under the fully unfurled umbrella of a constitution which should thereafter handle people who are not enemy combatants of a war power that threatens the very execution of our laws, but are just particularly evil and destructive criminals.

Negative rights and the United States Constitution

Wikipedia has a good short article on the distinction between negative and positive rights. "A negative right is a right, either moral or decreed by law, to not be subject to an action of another human being (usually abuse or coercion)." To use Justice Brandeis' famous phrase more broadly than he used it, negative rights are "rights to be left alone." All civilized legal systems beyond the village or tribal level have been systems of negative rights. For example, Anglo-American common law defines spheres of personal space which other persons must not invade -- especially spheres involving the body, residence, possessions, and property. The only way to create positive rights in traditional common law is to personally agree to them -- i.e. to make a contract.

The United States Constitution was drafted by people who, at least for amendments made before the 1930s, defined rights as negative rights. Thus, when the Constitution in the Fourteenth Amendment protects the "life, liberty, or property" and "equal protection of the laws" to "any person," it is referring to acts which government must refrain from doing, not to any positive duty of the government to act. The only time the government has a positive duty to act is when it has already deprived a person of liberty (e.g., prisoners, and arguably children compelled to attend public schools). Unfortuneately, the Court since the 1940s has departed sharply from this basci tenent of civilized law. It has read positive rights into the Constitution, thereby depriving citizens and other persons of negative rights to which we are entitled.

Thursday, October 27, 2005

Patent law reform in the U.S.

If you are a United States citizen and interested in our patent laws, now is the time to write your Congressman, or to lobby your company's lobbyist. The largest patent reform since 1952 is slowly working its way through Congress. Here are a brief description of the proposals and some links , the proposed amendments themselves, and the current Title 35 which contains almost all of the statutory law on patents in the United States.

Janice Rogers Brown

For Associate Justice of the Supreme Court I recommend that President Bush nominate Judge Janice Rogers Brown, formerly a justice on the California Supreme Court and currently a judge on the United States Court of Appeals for the District of Columbia Circuit.

Alternatively I would recommend Judge Alex Kozinski of the United States Court of Appeals for the Ninth Circuit.

Wednesday, October 26, 2005

Blackberry e-mail injunction

Chief Justice Roberts has denied RIM's request to stay an injunction by the trial court that might soon shut down RIM's Blackberry e-mail system, which has been held to violate NTP's United States wireless e-mail patent. The Supreme Court is still considering RIM's petition for writ of certiorari (i.e. whether to take the case on appeal). The Federal Circuit held that RIM's distributed system in North America, with a relay server located in Canada and some of the Blackberries and their users located in the United States, violated NTP's United States patent for a distributed e-mail system involving wireless devices and a relay.

Tuesday, October 25, 2005

Anti-phishing bills and "unauthorized access"

The spate of anti-phishing bills currently making their way into or through legislative bodies around the world provide a good opportunity to do something that is long overdue -- amend our obsolete and destructive cybercrime statutes. If network security professionals are to be empowered to stop phishing and prevent cyberterrorism, a major overhaul to these statutes is crucial.

The Cuthbert case in the U.K. has provided yet another example of an unjust conviction under cybercrime statutes. These statutes were typically enacted before the advent of the Web and generally make "unauthorized access" to a computer a crime. Under these statutes, the Web equivalent of pushing on the door of a grocery store to see if it's still open has been made a crime. These vague and overly broad statutes put security professionals and other curious web users at risk. We depend on network security professionals to protect us from cyberterrorism, phishing, and many other on-line threats. These statutes, as currently worded and applied, threaten them with career ruin for carrying out their jobs. Cuthbert was convicted for attempting to determine whether a web site that looked like British Telecom's payment site was actually a phishing site, by adding just the characters "../.." to the BT site's URL. If we are to defeat phishing and prevent cyberterrorism, we need more curious and public-spirited people like Cuthbert.

Meanwhile, these statutes generally require "knowledge" that the access was "unauthorized." It is thus crucial for your future liberty and career that, if you suspect that you are suspected of any sort of "unauthorized access," take advantage of your Miranda (hopefully you have some similar right if you are overseas) right to remain silent. This is a very sad thing to have to recommend to network security professionals, because the world loses a great deal of security when security professionals can no longer speak frankly to law-enforcement authorities. But until the law is fixed you are a complete idiot if you flap your lips. Since almost any online activity of which, it turns out, the web site operator does not approve may be deemed to be "unauthorized," these cases revolve around whether the defendant "knew" that the act was "unauthorized." In Cuthbert's case, because he told the police that his purpose had been to test the public site's access controls (the equivalent of pushing on doors of a grocery store to see if it is open) to see if he had just given his credit card number to a phishing site -- a laudable act of due diligence in this age of phishing and identity theft -- he essentially admitted to the difficult knowledge element of the criminal statute. After that, the conviction was a slam dunk.

Several years ago, network security professional Randall Schwartz engaged in a traditional friendly competition with security professionals in another company to try to find holes in their security. That company turned out to be not so friendly and Schwartz was convicted under an Oregon statute similar to the one that felled Cuthbert. The court rejected a defense of unconstitutional vaguenessbecause, said the court, it sounded more like a defense of overbreadth. In fact these statutes are both vague and overbroad, but courts often do not understand the issues involved.

Orin Kerr (a professor at my law school) has written a good paper on the subject with respect to laws in the United States.

Kerr recommends using more specific language instead of "unauthorized access." My own recommendation is that, if we are going to keep the "unauthorized access" language, it at least should be amended along the following lines:

(1) an access should not be defined as "unauthorized" unless either the defendant was provided notice of lack of authorization (equivalent to a no-trespassing sign) and affordance (a barrier that requires some intentional act to pass, equivalent to a fence or a door), or there is a long-standing and widely-known custom that the kind of access as perceived by the defendant was unauthorized, or both, and
(2) there should be no crime unless there was an underlying intent to use the unauthorized access to commit another kind of crime (such as theft of data, trespassing via disruption of computer operation, etc.)

Under (1), "unauthorized access" would for the first time have a clear definition, similar to how "trespassing" is defined in the context of a public place (you are authorized to enter a public store when it is opened, to push on the door to see if the store is open, to shop, in some jurisdictions to use the restroom unless there is a sign to the contrary; but you are not to enter the back room where they have the safe). Security professionals would operate under the same rules as everybody else instead of having knowledge discriminatorily imputed to them because they are "supposed to know better."

Under (2), accesses done for laudable purposes, such as Cuthbert's investigation about whether his credit card had been phished, would no longer be considered criminal. Network security professionals would be freed to do their jobs and protect the Internet from real criminals.

The current spate of anti-phishing bills currently making their way into or through legislative bodies around the world provide a good opportunity to amend cybercrime statutes -- to bring them into the twenty-first century world of the public web.

Monday, October 24, 2005

Patents and borders

It's becoming common to patent distributed systems. For example, you might have a patent on server software S and client software C, where a person deploying server software S' and client software C' would infringe the patent. But if S' is in Canada, and the C's are (at least in part) in the United States, does that also infringe the patent S+C? And if so, where? That's the big issue in NTP v. RIM, the "Blackberry case."

The latest news is that the district (trial-level) court will go ahead and move the case forward on remand while the case is appealed to the United States Supreme Court and the USPTO reexamines NTP's e-mail patents at the urging of RIM. One of the issues the district court will look at is whether NTP reached a settlement with RIM for $450 million. NTP wants more!

Sunday, October 23, 2005

A world of vouchers

Over a hundreds years ago, John Stuart Mill had this vision of a world of school vouchers instead of the government-dictated curriculum that is the current dominant model of public education. Government-dictated curriculum features listening and speech compelled by a command-and-control hierarchy. Control over this curriculum is the source of endless conflict between irreconcilable opinions. Government-compelled speech and listening flies in the face of freedom of expression in a marketplace of ideas that is the hallmark of a free society. Mill proposed an actual marketplace for schools. The Institute for Justice is leading the legal effort to implement this marketplace of ideas for parents and their children in the United States.

New writing -- The Birth of Insurance

I'm writing a book on the history of commercial institutions. I've broken down a section on the birth of insurance into a separate article. It highlights an early marine insurance contract and discusses Santera's pioneering work on the law and economics of risk.

Thursday, October 20, 2005

Manual of Patent Examining Procedure (MPEP)

The United States Patent & Trademark Office has made available the new version (8th edition, 3rd revision) of the Manual of Patent Examining Procedure (MPEP) online in PDF.

Wednesday, October 19, 2005

Surveillance and technological "neutrality"

"Technological neutrality" is a hot topic in government surveillance law. It posits that new technologies (such as WiFi and cryptography) that enhance privacy should be required, by law, to be altered in order to provide governments the same amount of ability to spy on private conversations as they had with previous technology. The argument is that we must decrease our legal rights in order to hold constant governments' abilities to spy on us.

A big assumption lies in choosing the technological baseline of surveillance. Usually this is, conveniently for governments, chosen to correspond to some high-water mark of surveillance, for example the copper era when phone exchanges were centralized and wiretaps required only splicing together copper cables.

The most accurate baseline, however, is the baseline abilities of surveillance that our laws, especially our Constitutional laws, were designed for. In the United States, the Fourth Amendment was designed for a world in which governments had no ability to wiretap. If a government wanted to spy on your conversation they had to do it the same way they can still do now -- by following you around and listening in person (or at least in the next room). On very rare occasions, you might write a letter and the government might open your mail, for which "paper" the Fourth Amendment required a search warrant based on swearing under oath that there was probable cause to suspect a crime related to that mail.

In short, the "technological neutrality" argument, if applied correctly, leads to the opposite conclusion reached by its proponents. Rather than reacting to privacy technologies by reducing further our legal rights, instead we should be expanding our legal privacy rights and encouraging privacy technologies until we return to the baseline of government surveillance abilities for which the Fourth Amendment and similar protections were designed.

Tuesday, October 18, 2005

Cuthbert: "unauthorized access"

Here's a good summary of the Cuthbert case in which playing around in the United Kingdom with URLs (e.g. adding "../.." in front of them) landed a web user in prison. The conviction was probably based at least as much on what Cuthbert said he was trying to do by typing this (testing the security to determine whether the site was a phishing site or a genuine one -- a good but illegal intent) as on what he actually typed.

Poorly written statutes like these produce all sorts of bad effects and injustices. What does it mean for a computer access to be "unauthorized"? For a cybercrime convinction to be just, there should at least be notice (analogous to a "no trespassing sign") and cautionary affordance (analogous to a door or a fence that one cannot cross by accident). Stay tuned for more comments on this here in the next week or so.

Ian Grigg and Adam Shostack also have some interesting comments on this case.

Sunday, October 16, 2005

Rights of travel

A large variety of rights of travel, especially the rights to travel between states and to leave the United States itself, are incorporated into the United States Constitution via the Ninth Amendment and substantive liberty under the Due Process Clause. (Take your pick: the Constitution is quite redundant when it comes to asserting unenumerated rights -- we have, alas, repeatedly found it necessary in our history to remind judges that unenumerated rights are the most crucial part of our laws).

Travel rights are found as early as the Magna Carta:
It shall be lawful to any person, for the future, to go out of our kingdom, and to return, safely and securely, by land or by water, saving his allegiance to us, unless it be in time of war, for some short space, for the common good of the kingdom: excepting prisoners and outlaws, according to the laws of the land, and of the people of the nation at war against us, and Merchants who shall be treated as it is said above.
The Articles of Confederation, the first constitution of the United States, expressly protected the right to "free ingress and regress to and from any other State."

These rights of travel, as with a large variety of other traditional rights, were incorporated into the Constitution via the Fifth Amendment Due Process Clause and the Ninth Amendment Unenumerated Rights Clause. Rights of travel were recognized in the 1999 case Saenz v. Roe.

During the struggle for freedom in Eastern Europe, the Soviet Union and their puppet communist governments turned their states into vast prisons by restricting freedom to leave their countries. The Berlin Wall was a highly visible but small part of this effort. Many died in their efforts to defect to the free West. Thus reisen freiheit (freedom of travel) became a key demand of those seeking freedom from these prison states, and when freedom of travel became possible these states fell. Restrictions and burdens on the right to leave a country are key symptoms that said country is no longer free.

Some common and natural law rights of parenthood

The rights of parents to control the education and upbringing of their children may be the most ancient and fundamental natural rights of all. From modern societies to hunter-gatherer and neolithic cultures, and even back our primate ancestors, parents and, secondarily, near relatives controlled their children. In every great civilization, parents and near relatives determined the upbringing and education of their children, with some pathological exceptions such as a ancient Sparta, Nazi Germany, and communist countries. There was little need to do anything but take this right for granted until the rise of compulsory government education and totalitarian ideologies in the late 19th century. In the 1920s, the Supreme Court reasserted parental rights as a common law rights in the United States in two landmark cases, Meyer v. Nebraska and Pierce v. Society of Sisters.

In Meyer the Court classified common law rights as falling under the substantive liberties of the Due Process Clause:
While this court has not attempted to define with exactness the liberty thus guaranteed, the term has received much consideration and some of the included things have been definitely stated. Without doubt, it denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized at common law as essential to the orderly pursuit of happiness by free men...Corresponding to the right of control, it is the natural duty of the parent to give his children education suitable to their station in life...

Pierce reaffirmed the the "liberty of parents and guardians to direct the upbringing and education of children under their control."

Most recently, "parents' fundamental right to make decisions concerning the care, custody, and control of their children" was reasserted against a broad forced visitation statute in Troxel v. Granville (2000).

Common law rights

The recognition of common law rights that could trump legislative statute and royal edict had already long been recognized in England by the time of Bonham's Case in 1610:
...it appears in our books, that in many cases, the common law will control acts of parliament, and sometimes adjudge them to be utterly void: for when an act of parliament is against common right and reason, or repugnant, or impossible to be performed, the common law will control it, and adjudge such act to be void.

In the United States, Supreme Court recognition of unenumerated rights has been the norm since shortly after our Constitution was ratified, except for the short "footnote four" period during the pathological New Deal Court. Four heroic justices fought against the stripping of "mere economic" property and contract rights, and illegal expansion of federal powers, undertaken during the New Deal.

Unfortuneately (in hindsight, given the later replacement of natural law philosophy and demotion of common law to statutory law) rather than invoking the Ninth Amendment, unenumerated rights were at first justified by the Court as a matter of natural rights. In Calder v. Bull (1798) Justice Chase, voting with a unanimous Court, wrote:
There are acts which the Federal, or State, Legislature cannot do, without exceeding their authority. There are certain vital principles, in our free republican governments, which will determine and overrule an apparent and flagrant abuse of legislative power; as to authorize manifest injustice by positive law; or to take away that security for personal liberty, or private property, for the protection whereof the government was established. An ACT of the Legislature (for I cannot call it a law), contrary to the great first principles of the socical compact, cannot be considered a rightful exercise of the legislative authority.

In the later legal positivist era they were classified as substantive liberties under the Due Process Clause.

Infamies such as Korematsu occurred soon after the New Deal Court rejected the idea of unenumerated rights. This absolutist approach was itself effectively rejected when Griswold found an unenumerated right of privacy implied by the "penumbras" and "emanations" of the enumerated Bill of Rights. The right of privacy was later classified as a substantive liberty under the Due Process Clause.