Evidence-Based Management : Robert I. Sutton : A Lesson also for the "Soft Sciences" – the Humanities?

We have been preaching “best evidence” to the soft sciences for 30 years but they are still not listening. Perhaps Robert I. Sutton at Stanford would have more success than we do if he applied to mainstream academia in the humanities what he teaches at the Department of Management Science and Engineering and at the Graduate School of Business at Stanford University.

Professor Sutton offers managers a course in Organizational Behavior: An Evidence-Based Approach which he describes as follows:

This course tackles fundamental organizational behavior issues (e.g. employee selection, rewards, teamwork, culture, innovation) from an evidence-based perspective. Evidence-based management is a simple idea. It just means finding the best evidence that you can, facing those facts, and acting on those facts – rather than doing what everyone else does, what you have always done, or what you thought was true. It isn’t an excuse for inaction. Leaders of organizations must have the courage to act on the best facts they have right now, and the humility to change what they do as better information is found. The course includes active discussion, industry guests, and case studies.

Professor Sutton, how about if you offered that same course in principle to the archaeologists, Egyptologists, Near East scholars, Biblical scholars, and historians of astronomy on this planet, who generally “do what everyone else does”, who persist on “doing what they have always done” and “who do what they think is true” rather than acting on the best evidence available, which often contradicts what they think.

In any case, we are on your side.

Society needs a more solid evidence-based approach in many fields of human endeavor, rather than the witchdoctor-like tea-leaf reading which prevails in many of the soft sciences today. Apparently, the same problem prevails in management as well.

War of the Worlds in EU Copyright Law

Helena Spongenberg in her 29.11.2006 article

MEPs push for new copyright law in digital era

quotes Pia Raug, spokeswoman collective rights management lobby CISAC, who says about the current situation of copyright law in the European Union, that:

It’s a war of the worlds

on issues such as digital rights management (DRM), collective rights management, and private copy levies.

Spongenberg writes:

Interest in copyright reform is being sparked by explosive growth in the digital music market which is set to become a €3.9 billion a year industry in the EU by 2011, but which is throwing up new challenges both for independent artists trying to exploit the new medium and the companies trying to make money from downloading songs.

How right she is. We ourselves have uploaded our musical compositions and performances to Kaulinsium at MySpace in order to participate in this new 21st century “gold rush”. Happy listening.

French Alcatel Sues Cisco and Microsoft for Patent Infringement and Punitive Triple Damages : Philip Morris v. Williams : Constitutional Law

Revenge is a kind of wild justice, which the more man’s nature runs to, the more ought law to weed it out, for the first wrong, it doth offend the law, but the revenge of that wrong, putteth the law out of office. – Francis Bacon

That quotation appeared in Isaac Ray Corner : A history of justice: origins of law and psychiatry, a thoughtful April 1999 article by Walter A. Bordenn, MD, in the AAPL Newsletter, the newsletter of the American Academy of Psychiatry and Law, · Vol. 24, No. 2, pp. 12-14.

It has particular relevance to recent events in patents and torts and to Constitutional Law, especially in view of the upcoming US Supreme Court decision in Philip Morris v. Williams, which, as one can see from the discussion of the case at SCOTUSblog, may find the US Supreme Court ducking the hard issues in the case and sending it back on a technicality. As written by Peter Lattman at the Wall Street Journal Online Law Blog:

To the disappointment of those who wanted to see a grand debate over the constitutionality of large punitive damage awards, the Court seemed to focus more on the second question presented in the case: Whether due process permits a jury to punish a defendant for the effects of its conduct on people not parties to the lawsuit. Philip Morris contends that the jury improperly punished the company for conduct regarding other people who haven’t brought suit against it.

Lattmanspoke with Sheila Birnbaum, a Skadden Arps partner…[who] won the last punitive damages case before the Supremes, representing State Farm in 2003’s Campbell v. State Farm“, and who remarked that:

[I]t’s pretty clear that Campbell will remain the jurisprudential standard for this case.

As Lattman writes:

In State Farm, the Court suggested that, at most, punitive damages should not exceed nine times the amount of actual damages awarded to the plaintiff.

Andrew F. Susko and Edward M. Koch at White and Williams LLP go into greater detail on the holding in Campbell:

Prior to the Supreme Court’s recent decision in Campbell, the Court recognized that punitive damages awards posed an acute danger of arbitrary deprivation of property under the Due Process Clause of the Fourteenth Amendment. In light of these concerns, the Court, in the landmark case of [BMW v. Gore], 517 U.S. 559 (1996), outlined a three-part test to evaluate the constitutionality of such awards. This test looked to: (1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages awarded; and (3) the difference between the punitive damages awarded and the civil penalties authorized by statute or in comparable cases….

[T]he Court held that it was improper for the jury to consider State Farm’s national operations, reasoning “[a] defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business.” Second, the Court looked to the disparity between the compensatory and punitive damages awards – here, a 145:1 ratio. Although it expressly declined to impose a bright-line rule, it held that “few awards exceeding a single-digit ratio between punitive and compensatory damages . . . will satisfy due process.” Accordingly, the presumptive constitutional punitive damages award in Campbell was $9 million – some $136 million less than that awarded by the jury. In so ruling, however, the Court noted that greater ratios might be constitutional where “a particularly egregious act has resulted in only a small amount of economic damages.” In carving out this exception, the Court was careful to note that the wealth of a defendant — standing alone — could not justify an otherwise unconstitutional punitive damages award.

Note in all of these cases that the US Supreme Court is apparently not disturbed by the fact that awards of damages in civil cases can be accompanied by additional punitive punishment of the wrongdoer and that this punishment is inflicted upon the wrongdoer without many of the otherwise mandatory legal safeguards to which a criminal defendant has a right according to the US Constitution. To this observer, the infliction of punishments in civil cases is prima facie a violation of the Due Process Clause of the US Constitution since fewer rights of defense are available in civil cases than in criminal prosecutions. Culpability, for example, is not subject to the “guilty beyond a reasonable doubt” standard and punishments are open-ended.

Alcatel sues Cisco and Microsoft for Patent Infringement

As could be expected, European companies, like their American counterparts, are beginning to smell that money might be made in the United States by bringing patent infringement actions against successful and wealthy American corporations:

1) due to the favorable US laws permitting patent infringement claims on patents permitted for business methods and software, (see e.g. Patent Terrorism – Terror of the Intangibles by iPrex Intellectual Property Solutions, M. Qaiser, and P. Mohan Chandran); and,

2) because of the possibility of making gigantic windfall profits through the US laws permitting punitive damages (see e.g. Keith N. Hylton, Punitive damages and the economic theory of penalties, Georgetown Law Journal, November 1998).

As written at ars technica by Nate Anderson, the French company Alcatel, which is “in the process of merging with Lucent“, [link added by LawPundit] and which some months ago sued Cisco for patent infringement, has just sued Microsoft for patent infringement of digital video and communication network patents, asking for triple damages for what is claimed to be “wilful infringement” in seven cases. The claim for punitive triple damages goes hand in hand with weaknesses of the patent system discussed by Dar Haddix of UPI in a Science Daily article, not available at that site, as reproduced at IPBiz.

Punitive Damages in Torts

When I was at Stanford Law School as a student, I worked on a project on punitive damages in torts for Professor of Law Robert A. Girard, a Harvard Law School grad, who saw punitive damages as an extremely important issue in tort law. At that time, I was of the opinion that punitive damages for civil wrongs looked like an ill-conceived mesh of the civil and criminal law, a hybrid form of law which violated the basic tenet that punishment and retribution were state powers to be exercised through the medium of the criminal law.

It is now nearly four decades later and my opinion is unchanged. It is extremely difficult as a matter of logical legal theory to reconcile civil punitive damages of any kind with modern systems of law in the Western world, whose objective is to take the elements of revenge and retribution out of private hands and to reserve the sanction of “punishment” to the criminal law as a power of the state, rather than as a private right of one individual against another.

As written by Aaron Xavier Fellmeth in Civil and Criminal Sanctions in the Constitution and Courts, Georgetown Law Journal, November 2005:

There are few distinctions in Anglo-American jurisprudence more fundamental and consequential than that between the civil law and the criminal law.

This distinction is a fundamental pillar of the modern rule of law, which seeks to replace ancient remnants of private revenge and private retribution – which still afflict primitive nations in our world today – with a system of sanctions governed by due process and modern jurisprudence.

Instructive here is the following article 28 from the Instructions for the Government of Armies of the United States in the Field (Lieber Code), 24 April 1863, which is nearly 150 years ago:

Art. 28. Retaliation will, therefore, never be resorted to as a measure of mere revenge, but only as a means of protective retribution, and moreover, cautiously and unavoidably; that is to say, retaliation shall only be resorted to after careful inquiry into the real occurrence, and the character of the misdeeds that may demand retribution.

Unjust or inconsiderate retaliation removes the belligerents farther and farther from the mitigating rules of regular war, and by rapid steps leads them nearer to the internecine wars of savages. ” [we added the emphasis]

There is no difference in principle here between war and the principles of the rule of law, which demand that we move away from the methods by which savages resolve conflicts, whether those of war or of law.

The idea that legal persons under the civil laws should be permitted to make a punitive profit from the wrongs of their fellows, rather than merely obtaining just compensation by means of monetary damages, is completely contrary to the democratic ideas which are at the root of American government, but is justified by its proponents under the rationale that the threat of punitive damages deters unwanted tort behavior. But this of course is an absurd argumentation for awarding a pound of flesh to private persons for private wrongs inflicted when the state is absolutely free to legislate effective criminal laws as deterrents if the state so desires. So why does it not do so?

Fellmeth writes:

It is commonly observed that all three branches of government have taken numerous steps in the past half-century to blur the distinction between civil and criminal law. These measures include the increased use of the qui tam action and sharing of penalties with law enforcers, the increased prevalence of punitive damages in civil cases to vindicate various public policies, the now common use of statutory civil penalties, and the expanding notion of “civil fines” for violations of federal and state regulations. This blurring has thrown into doubt the circumstances under which important constitutional procedural protections apply. Much of the Bill of Rights, for example, explicitly guarantees, or has been interpreted to guarantee, certain procedural protections in criminal cases only. The Fifth Amendment Double Jeopardy Clause, for example, has been interpreted to apply only to criminal punishments, as have the Sixth Amendment Confrontation Clause, the Eighth Amendment guarantee against excessive fines, and the Article I, Section 9 prohibition on ex post facto laws. Even in cases in which a plaintiff or prosecutor seeks civil sanctions that are primarily or entirely punitive in nature, such as civil exemplary damages awards or civil fines, these protections usually do not apply, and, where they do apply, they tend to suffer diminution in scope.” [link added by LawPundit]

Moreover, as a matter of law, it is absolutely intolerable to this observer as a matter of justice and due process that private legal persons can be subjected to punitive civil punishments whose scope and nature are not known in advance but depend on the vagaries of decisions made by juries having minimal knowledge of the legal and economic system.

Perhaps the specter of giant amounts of money flowing out of the coffers of American companies into the coffers of foreign companies will wake up the American legal system to the foolishness of the prevailing law in this field.

Although it is not the issue before the court in Philip Morris v. Williams, and although the issue is seen as the question of whether there are “limits” on punitive damages (see Linda Greenhouse, Justices Weigh Limits on Punitive Damages, New York Times), we nevertheless ask: does the Constitution of the United States permit civil courts and juries to PUNISH civil defendants arbitrarily and without the protections granted to the criminal accused.

We think the answer is no.

As Greenhouse writes, in the instant case:

The jury had awarded [the widow] compensatory damages of $821,000, meaning that the ratio of punitive to compensatory damages was 97 to 1.” [The jury awarded $79.5 million in punitive damages]

In our view, that is not law. That is simply madness. It is a legal system which has run completely out of control, and it is so viewed here in Europe in the legal community, where people just shake their heads disbelievingly when they read about the jury awards handed out in the United States in civil cases.

Besides, as a practical matter, the glut of cases in this field and the fact that punitive damage cases are increasing rather than decreasing in number proves without a shadow of a doubt that punitive damages have next to ZERO deterrent effect and that the purpose for which civil punishments are inflicted is thus largely a fata morgana having little empirical foundation.

See the following links for more materials:

Tobacco Products Liability Project
Supreme Court Times Blog
Elizabeth S. Campbell, Supreme Court to Revisit Constitutionality of Punitive Damages Awards

Microsoft and Linux : The Specter of Patent Litigation and the Need for Patent Reform

Over at ars technica Ryan Paul headlines his November 21, 2006 article as Microsoft: we agree to disagree with Novell on Linux patent infringements, and – after an analysis of the patent infringement threats – concludes:

Although readers may be inclined to judge and condemn Microsoft or Novell for this latest round of shenanigans, I think that would be counter-productive. The real culprit in this case is the patent system that makes this kind of situation possible. Microsoft’s threats illuminate the necessity of patent reform, particularly as it relates to software.

Seven Wonders of the World : Ancient Medieval Modern

What do people trained in the law do? One thing they do is the copious and complex legal paperwork involved in realizing and carrying out engineering and construction projects (see e.g. the Real Estate and Construction Law Blog, Construction Attorney Blog, Washington Construction Law Blog, ConstructionWebLinks).

Here, e.g. is an October 10, 2006 description by Emily Williams of Virginia Law School of the work of International Deal-maker of the Year, Philip Stopford, in International Deal-Maker of the Year Offers Tips on Project Finance:

  • “While working on the Cross Israel Highway Project, a venture that would build a road through Israel from Turkey to Egypt, one of the major considerations was not financing, but an antiquities law and political disruptions. The antiquities law could hamper progress if contractors working on the road came across any ancient remains. The remains would have to be analyzed to determine whose remains they were, which would determine whether construction could continue. The road also paralleled the Green Line, which separated the West Bank and Gaza from Israel in many places. Workers were often targeted by gunmen. These considerations had to be written into the contracts, Stopford explained.”

The LawPundit posting below looks at some construction projects, both ancient and modern, not from the standpoint of law, financing, negotiations and documentation done in the background – whether today or in antiquity – but rather from the standpoint of the finished product.

Still, one must keep in mind that every wonder of the ancient or modern world was built also because there were priests (in ancient days) and lawyers (in modern times) who enabled it to happen. Before the paperwork is ready, nothing is – or can be – built.

The Seven Wonders of the Ancient World

Herodotus in his travels was the first to refer to the “wonders” of the world and Callimachus of Cyrene in the 3rd century BC as a scholar at the library of the Alexandria Mouseion wrote A Collection of Wonders around the World . The original idea of identifying Seven Wonders of the Ancient World comes from a list originally compiled in the 2nd century BC by Antipater of Sidon, who, instead of the Lighthouse of Alexandria listed below, included the Ishtar Gate. These wonders, however, were not wonders of the natural world, but were all man-made engineering and construction wonders which the ancient Greeks as travelers (tourists) could visit several thousand years ago.

Listed in their order of construction, the Seven Wonders of the Ancient World were:

  1. The Great Pyramid of Giza
  2. The Hanging Gardens of Babylon
  3. The Temple of Artemis at Ephesus
  4. The Statue of Zeus at Olympia
  5. The Mausoleum of Maussollos at Halicarnassus
  6. The Colossus of Rhodes
  7. The Lighthouse of Alexandria

The Seven Wonders of the Medieval World

Various locations accessible to travelers in the Middle Ages – and some of these of course were totally unknown to the ancient Greeks – have been included by various sources among the much later Seven Wonders of the Medieval World. This is our selection from a longer list of alternatives:

New Ancient Wonders of the World

Modern archaeological discoveries have also opened up our eyes to new, previously unknown wonders which fully qualify as Ancient Wonders of the World, of which this list, created by us, is only a limited example:

The Seven Wonders of the Modern World

As world populations and technology have expanded, it has become more difficult to pick out just seven world wonders from the many now available. The Seven Wonders of the Modern World according to the American Society of Civil Engineers (in 1994) were:

World Wonders Built in Recent Years

In our view, a number of new building structures definitely fall into the category of world wonders:

To those – as follows – we can add modern skyscrapers and similar tall structures which mark the modern age as mankind continues to reach for the stars.

The World’s Tallest Man-Made Structures and Buildings

The Council on Tall Buildings and Urban Habitat and Emporis have partnered recently and rank the world’s tallest structures and buildings. As written at Emporis:

Taipei 101 is the world’s tallest building, surpassing the height of the Petronas Twin Towers in Kuala Lumpur in late August 2003.” See the Wikipedia for a current list of tallest buildings and structures in the world, ranked by category. Many of these man-made structures are true world wonders in our modern age.

See also a list of the historical development of the world’s tallest man-made freestanding structures on land.

Greatest Engineering Achievements of the 20th Century

The National Academy of Engineering has a list of their selection of the Greatest Engineering Achievements of the just past 20th century but none of these are architectural or archaeological tourist travel sites, even though they are world wonders in their own right:

As one can see from that list, in ancient times mankind’s wonders of the world were confined to things that men built and constructed. In our modern age, the wonders of the world are rightly expanded to include the many new and wondrous things that man has created beyond architecture alone.

Law, Computer Science, Philanthropy and ABA President-Elect William H. Neukom of Dartmouth Stanford and Microsoft

Mark A. Lemley, mentioned in the previous post, is William H. Neukom Professor of Law at Stanford Law School, occupying a chair endowed in 2002 by William H. Neukom, who also funded a chair in computational science at Dartmouth College.

William H. Neukom is a 1964 graduate of Dartmouth College and graduated from Stanford Law School in 1967.

Early in his career, Neukom joined the Seattle law firm now known as Preston, Gates & Ellis LLP, a pioneering firm in the technology sector. See e.g. the history of the Shidler Center for Law, Information and Technology at the University of Washington School of Law.

In 1985 Neukom became the first attorney for Microsoft Corporation when William H. Gates, Sr., the “Gates” in Preston Gates & Ellis, who happened to be the father of Microsoft’s Bill Gates, asked him if he wanted to represent his son’s young company.

Neukom was subsequently Microsoft’s General Counsel (chief legal officer) for the next nearly two decades and helped to shape what Microsoft is today. In 2002 he rejoined Preston Gates & Ellis from his position as Executive Vice President of Law and Corporate Affairs at Microsoft. At Preston Gates & Ellis LLP, Neukom is the chair of the firm.

Neukom has recently been in the news again as the new President-Elect of the American Bar Association. He will take office in August, 2007.

Neukom is also making a name for himself as a philanthropist. As reported in the print version of the Stanford Law School Annual Report of Giving 2005-2006, Neukom “has committed $20 million for the construction of a new academic building at the [Stanford] Law School“. See also the Stanford Lawyer, Building for the Future by Sharon Driscoll, and Stanford Report.

In 2004, Neukom also committed an approximately equal amount to Dartmouth College, his undergraduate alma mater, for an Institute for Computational Science:

Dartmouth has been known for innovations in computer science, in both application and theory, dating back to the computer’s earliest days. Now, through a generous commitment of $22 million, William H. Neukom, chair of the Seattle law firm Preston Gates & Ellis and the former executive vice president of Law and Corporate Affairs at Microsoft Corporation, will establish an Institute for Computational Science that will continue the college’s legacy of leadership in computing. Neukom is a Dartmouth trustee and a member of the Class of 1964. The commitment, made in honor of his family, is the largest gift in Dartmouth’s history for an academic program.

Neukom’s philanthropy is in line with the same philanthropic spirit we see evidenced in the Bill and Melinda Gates Foundation and conforms to the views of William H. Gates, Sr., who, together with Chuck Collins, has written a book, Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes, whose central theme is that individual wealth is in part a product of investments made by and costs incurred by society and the system as a whole (e.g. educational system, maintenance of the enabling economic system, system-enabled incentives for wealth accumulation, costs incurred in the protection of intellectual property, etc.), so that taxes are a form of societal “return on investment” which are necessary for society to create the very conditions which permit entrepreneurs to accumulate great wealth in the first place.

Interestingly, although there are numerous nay-sayers to that philosophy, it appears to us that it is precisely the very wealthy elements of society – who arguably understand our money system the best – who often have the greatest philanthropic spirit and who, once they have accumulated great wealth, are often the most ready to pump that wealth back into the system. Take a look at this link to Philanthropist at the Wikipedia for examples of what people with really big money have done to repay society for its investment in them. Business Week has a list of the 50 most generous philanthropists.

Patent Law Reform and New Legislation

I just received the Fall 2006 print issue of the Stanford Lawyer which at p. 31 quotes Stanford Law School prof Mark A. Lemley, an intellectual property law expert, in his July 11 testimony before the House Judiciary Committee hearing on the Trademark Dilution Revision Act of 2005:

It is particularly important that Congress act to prevent abuses of the patent system by those who use the patent system not to develop and make products but to squeeze money out of those who do.

Lemley made a similar statement on June 14, 2005 to the Senate Judiciary Committee in their hearings on Patent Law Reform : Injunctions and Damages:

It is particularly important that Congress act to prevent abuses of the patent system by so-called “patent trolls,” who use the patent system not to develop and make products but to squeeze money out of those who do. While there are no reliable statistics on the extent of the troll problem, there is no question that it is a widespread and extremely serious problem in the semiconductor, computer, and telecommunications industries. Large, innovative companies such as Intel and Cisco never have a week go by without threats of suit from a non-manufacturing patent owner claiming rights in technology that the defendants did not copy from the patent owner – usually they’ve never even heard of the patent owner – but instead developed independently. While there is a legitimate role for small and individual inventors who patent their technologies and license their ideas to others, increasingly the patent owners are not contributing ideas at all, but popping up years or even decades later and trying to fit an old patent to a different purpose. Trolls do this because the law permits it, and because it gives them a chance to make a lot of money – under current law, far more money than their technology is worth.

Patent reform needs to deal with these abuses of the system without interfering with the normal, legitimate use of the system to protect and encourage innovation. Doing so requires careful balancing of the interests of patent owners, technology companies, and the public.

One should read all of Lemley’s testimony to get an appreciation for the kinds of reforms that are being discussed for US Patent Law. See also Patently O here and here regarding H.R. 2795: Patent Act of 2005 as well as S. 3818: Patent Reform Act of 2006, bills currently before Congress. Also of interest is the August 21, 206 article by Matthew J. Sag and Kurt W. Rohde, Patent Reform and Differential Impact, Northwestern Law & Econ Research Paper No. 925722.

Readers of Law Pundit : Bauska Latvia : Rundale Palace (Pilsrundale)

One of the top tourist magnets and an absolute architectural highlight of Latvia is Rundale Palace (Pilsrundale) near the city of Bauska (Wikipedia, In Your Pocket), Latvia, location of LawPundit readership.
Rundale Palace (see also Wikipedia) is an outstanding monument of Baroque and Rococo art, which was designed by the Italian architect Francesco Bartolomeo Rastrelli (who also designed the Winter Palace in St. Petersburg, the winter residence of the Russian Tsar).

Rundale Palace – Photo at InspirationRiga.lv – Riga Convention Bureau
See also the more extensive photo

Today Rundale is used to receive foreign dignitaries and is the site of the Rundale Museum. In addition, the Latvian President’s inaugural ball is also held there.

Rundale Palace was built from 1736 to 1740 as the summer residence of Ernst Johann von Biron (also written Biren, originally Bühren), Duke of Courland (born in Kalnciems, see also Latvijas celvedis, died in Jelgava, see also Latvijas celvedis and In Your Pocket). Biron was so powerful that he practically ran Russia for a number of years.

See also
Latvia Tourism – Bauska
Bauska Tourism – in English, German, Russian, Latvian
Virtual Tourist – Photos of Bauska
Virtual Guide to Latvia’s Cities and Towns
Bauska Castle Museum
World Travel Server
Map of Bauska – Jana Seta
Map of Latvia – Latvijas celvedis

Readers of LawPundit : Rautalampi Finland : Ancestors of John Morton : Important Signer of the US Declaration of Independence : Finns in America

We figured that readers of LawPundit from Rautalampi, Finland must have a very good reason to look into our website pages, so we looked at our recent postings relating inter alia to the origins of the United States Declaration of Independence (see Barbados and New York Finger Lakes District), and did a bit of keyword research.

We discovered at the website of the US Embassy in Helsinki, Finland, that a certain John Morton, whose ancestors hailed from Rautalampi, Finland, played a significant role in American history. As written there:

John Morton was born in the New Sweden colony in modern-day Pennsylvania, the descendant of Matti Marttinen of Rautalampi, Savo, Finland. He was a farmer and surveyor, and active in politics, rising to become Speaker of the Pennsylvania House, and a delegate to the Second Continental Congress. At that Congress, he cast the deciding vote in the Pennsylvania delegation, completing the role of states in support of the Declaration of Independence.” [emphasis added]

It is always incredible to discover how many different nations and peoples had an influence on the founding of America. See in this regard Laura I. Hannula and The Story of the Finns in America.

Legal Effect of Design Infringement Threats without Accompanying Legal Action

Just how far things have gone wrong in intellectual property law is illustrated by a recent High Court case (via Outlaw.com) involving a designer who was able to stop a company (Quads4Kids, a company not affiliated with the designer) from selling quad bikes on eBay because the designer claimed that those bikes infringed upon his design rights, as allegedly found in 16 European Community designs for bikes which he had registered in February of 2006, but whose publication at registration had been deferred by the designer.

The absurdity of the situation was thus that there was no way that the alleged infringer could possibly have been aware of the actual designs for which infringements were being claimed, unless the alleged infringer had had some secret access to the 16 registrations.

Moreover, no legal action had been taken against the alleged infringer by the designer. Rather, the designer had simply invoked something on eBay called VeRO, Verified Rights Owner.

VeRO is system implemented by e-Bay whereby, as Outlaw.com writes: “owners [can] stop sales of goods in which they have rights and which are being sold without their permission.”

As we can read at eBay:

… eBay has created the Verified Rights Owner (VeRO) Programme so rights owners can report listings that infringe their rights. Any person or company who holds intellectual property rights (such as a copyright, trademark or patent) which may be infringed by listings or items sold on eBay is encouraged to participate in the VeRO Programme.

In other words, due to the errant intellectual property law ideas which currently have the force of law, the designer in this case felt himself empowered by the legal status quo to force a commercial enterprise from selling commercial goods on eBay, just on his say-so alone.

This was too much – even for the High Court.

Outlaw.com writes:

Quads4Kids, wishing to resume its sales through eBay, took a case against [the designer] by saying that his statements to VeRO were groundless threats, actionable under the Community Design Regulations of 2005. It asked for an interim injunction to prevent [the designer] from making any more threats.

The Regulations do not permit people who claim to be rights holders to make threats which they cannot back up with legal action. The law is designed to allow the threatened party to challenge a supposed rights holder’s rights in court, so that baseless threats cannot be made.

“It is entirely wrong for owners of intellectual property rights to attempt to assert them without litigation, or without the threat of litigation, in reply,” said the High Court judge, Judge Pumfrey, in his ruling. “If somebody goes around saying, ‘I will sue you for infringement of patent unless you stop buying your goods from X’, then the natural response of anybody to whom that statement is made was to stop buying the goods of X.”

“You can’t simply make a threat of infringement proceedings without having a good basis for doing so,” said John Mackenzie, a litigation specialist with Pinsent Masons, the law firm behind OUT-LAW. “It is a new example of a process for protecting IP but it still falls within the groundless threats law.”

Essentially, the entire idea of business method, software and design trolling, which the legal establishment has foolishly permitted in the patent field and which numerous firms today are turning into a big money business, is just the scam outlined by the High Court, nor does the High Court’s decision give the patent system much relief in the future.

Pursuant to that decision, all any patent troll has to do is to lodge legal proceedings regarding his patented business method, software or design and he no longer falls under the rationale of the above decision, since whether the threat is then groundless or not is decided subsequently by the judicial system, and that can take a long time, given the vagaries of court delay. In the interim, the groundless threat standard is of no help to an alleged – and even wrongfully accused – infringer whose business can potentially – and wrongfully – be brought to its knees by the invocation of overly broad intellectual property rights, as foolishly granted by the legal system to owners of such rights.

USPTO Strategic Plan 2007-2012 and Related Intellectual Property Matters : Three Clicks Required Where ONE is Enough

The patent world is in a state of expansion. The USPTO issued its 7 millionth patent earlier this year. See USPTO and J. Douglas Miller. The Patent Librarian’s Notebook informs us that more than 600,000 patents were granted worldwide in 2004. For newer patent trends, see Science and Engineering Indicators 2006.

To obtain a patent, it can not be anticipated by prior art. Are you aware that for any patent application, the patent examiner at the USPTO – on average – has only a few hours in which to find prior art? That was the congressional testimony of Ronald J. Stern, President of POPA (Patent Office Professional Association).

In that time frame, finding prior art is surely often a hopeless task in complicated patent matters, and yet, patents are being granted at a pace to try to match the patent explosion which has occurred ever since business methods and software were foolishly deemed patentable by the short-sighted legal establishment. Companies such as IBM have thus supported recent efforts to improve patent quality. See also the Peer to Patent Project (Community Peer Review of Patents) and Open Collaboration is Medicine for Our Ailing Patent System.

Patents are state-granted and state-supported monopolies and the people who generally profit the most from such monopolies are monopolists at heart to begin with. Why compete if you can gain exclusive rights to a business?

One need only to look to the postal monopolies of history to see that monopolies, once granted, in the money that they make, long exceed in their monetary influence on society the patent protection periods of law. For example, the fortune made through the postal monopoly of Thurn and Taxis, a monopoly which originated in a PATENT from the Emperor, survives down to our day. How stupid the mass of our legislators are.

And then there is the other side of the patent equation, the outdated management of the USPTO. As written by the Senate Appropriations Committee Report on the USPTO:

Since fiscal year 2004, the Committee has provided a 45 percent increase in funding for PTO, including funding to hire thousands of new patent examiners. Yet during the same time period, the backlog of pending patent applications has grown to over 500,000, and it still takes an average of over 2.5 years to process a patent application. Meanwhile, the Inspector General has received repeated complaints that PTO has allowed or encouraged unfair personnel practices. The IG has identified these problems as one of the top 10 management challenges of the Department of Commerce. Even with increased funding, the problems at PTO are getting worse, evidence that what is needed is better management.


The United State Patent and Trademark Office (USPTO) exemplifies the problems encountered in intellectual property issues in general. As written in the GAO (US Government Accountability Office) Intellectual Property Report on the USPTO as submitted to Congress in June, 2005:

The U.S. Patent and Trademark Office (USPTO) is responsible for issuing U.S. patents that protect new ideas and investments in innovation and creativity. Recent increases in both the complexity and volume of patent applications have increased the time it takes to process patents and have raised concerns about the validity of the patents USPTO issues. Adding to these challenges is the difficulty that USPTO has had attracting and retaining qualified staff.

Three Clicks are Required where ONE is Enough

In our view, the problems that the USPTO faces are exemplified by its non-intuitive website, where a click on the menu item “About USPTO” takes the user to no less than 9 submenu items – except for Reports, EIGHT of which (Programs & Offices, Under Secretary, Policies and Procedures, Intellectual Property Options, Education, Hours, Maps, Mail and Phone, Website Disclosure, U.S. Government & Commerce), when clicked, take the user to the exact same subsequent web page, and thus already involve one totally useless, superfluous click, just to start.

At that subsequent page, the user is then not presented with a page “about the USPTO” but finds EIGHT list boxes, each of which AGAIN consists of a menu list. The actual “about page”, Our Business : An Introduction to the USPTO, is then found under the menu item Introduction at Programs & Offices. THREE clicks are required where ONE is enough. Commercial websites bloat their menus this way to increase the number of ads viewed by users by increasing the number of pages a user has to view to get where he wants to go, but there is no excuse for this at the USPTO website.

That a click to Reports takes the user to a separate page is remarkable since that subsequent page also simply consists of a few boxes with links and could easily be incorporated into the same page as the other eight menu items. Totally superfluous. If the rest of the USPTO operates this way, there is no wonder that it is in the quagmire that it is.

The philosophy seems to be: why simple, when one can make it complicated?

THE USPTO DRAFT Strategic Plan 2007-2012

The USPTO has issued its DRAFT Strategic Plan 2007-2012 v6 of 24 August 2006 (recently modified on 31 October 2006). As written at the USPTO website:

The Government Performance and Results Act of 1993 [link added by LawPundit] requires Federal agencies to establish a strategic plan covering not less than a five-year period, and to solicit the views and suggestions of those entities potentially affected by or interested in the plan. On March 14, 2006, the USPTO posted a notice soliciting public input and establishing an e-mail box (StrategicPlanning1@uspto.gov) for the public’s use in submitting suggestions, ideas and comments that the agency should consider in developing the new plan. USPTO employees also were given the opportunity to provide input, either via e-mail or anonymously via USPTO’s intranet site.

The draft plan includes the USPTO’s mission statement, vision statement and a description of the strategic goals, objectives and significant actions that the USPTO plans to take in order to accomplish its mission and achieve its vision. Full details on how the USPTO plans to implement the strategic plan, including funding and performance metrics, will be included in the USPTO’s fiscal year 2008 President’s Budget.

The USPTO would like to receive input from a wide range of organizations (both national and international), public bodies, and other stakeholders. We especially encourage the views and suggestions of individuals and entities holding or dealing with intellectual property, and USPTO employees. The USPTO anticipates publishing the final plan in early calendar year 2007, and making it available on our Web site at that time.

21st Century Strategic Plan (the predecessor plan) and Interim Adjustments

The 2007-2012 draft plan should be viewed in the context of and with the benefit of hindsight to the USPTO’s 21st Century Strategic Plan for the years 2002-2007 and the Interim Adjustments thereto.

GAO Intellectual Property Report on the USPTO

Moreover, one should take notice of the following footnote found in the USPTO Interim Adjustments:

In June 2005, the Government Accountability Office completed a review — Intellectual Property: USPTO Has Made Progress in Hiring Examiners, but Challenges to Retention Remain (GAO-05-720 – June 2005) [link added by LawPundit] — of many of the USPTO’s strategic planning initiatives. Of the 39 initiatives they reviewed, they reported that 11 were implemented, 21 were partially implemented and 7 were not implemented.”

See in this regard the comment to that GAO Report at:

Peter Zura’s Two-Seventy-One Patent Blog, which points to recommendations for USPTO reform as made in a 298 page report by NAPA, the National Academy of Public Administration, referred to at IPCentral, and summarized at I/P Updates and also here by Florence Olsen .

Related Articles

Alexander George, Law firms beef up patent lawyer ranks
William R. Haulbrook, Ph.D., Getting a Handle on the Software Patent Explosion
D.J. Dykeman, Patent Strategy in the Nanotech Patent Explosion (abstract)
Bronwyn H Hall, Exploring the Patent Explosion
Patently O, Patent Explosion (blog)
Richard A. Epstein, Patent’s Downward Spiral

European Union 50th Anniversary Logo features the Theme of Togetherness

You will be seeing a lot of this logo in the year 2007, so here is a chance to become familiar with it.

In the competition for the 50th anniversary logo of the European Union, the three top logo selections from a field of 10 finalists resulting out of 1700 entries are featured at the EU site of the Logo Competition 2006.

The winning logo was designed by Szymon Skrzypczak of Poland (bio). Here is the original English language version of the logo which we have reduced to 25% of the size of the original logo as found on the EUROPA Audiovisual Service website:

That logo now is to appear as the 50th anniversary logo of the EU in each of the official languages of the European Union Member States plus candidates:

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Original version

English version

French version

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German version

Italian version

Spanish version

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Greek version

Portuguese version

Dutch version

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Danish version

Finnish version

Swedish version

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Czech version

Estonian version

Latvian version

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Lituanian version

Hungarian version

Maltese version

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Polish version

Slovakian version

Slovenian version

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Bulgarian version

Romanian version

Gaelic version

ALL the various language logos are accessible at the European Union’s EUROPA Audiovisual Service. Click on the logo or the language version above to get to the actual original graphic of the logo online which is substantially larger than the thumbnail versions above.

The motivation of the jury in selecting this logo was as follows:

In line with Plan D this logo gives a graphic interpretation to the voice of all Europeans, especially the new generations. These Europeans look for peace, stability and prosperity without taking anything away from their rights of individuality and diversity. The word “together” expresses in a simple and immediate way what was originally bound to the idea of Europe: not only politics, or money, or geographic boundaries, but most of all co-operation and solidarity. And furthermore it aims to stress that despite all of our differences, we are celebrating 50 years of peace as one community. The different letters, using different typefaces, express the diversity in European history and culture and are kept “together” by the meaning of the word itself. Also, being based on one word, the logo can easily be adapted to every language and still keep its power as a sign, as a symbol because of the different typefaces used. The irony inspired by fashion labels is well suited to a single outstanding activity such as the celebration of the 50th anniversary. The sub-line “SINCE 1957” is an essential part of this irony, and most importantly the main link to the Treaty of Rome. The logo can be adapted to a wide variety of media and can be used effectively both in colour and in monochromatic versions. For a better usability however, the expert jury recommends that particular attention be paid to the sequence and shades of colours and to the use of specific phonetic symbols. For the sub-line “SINCE 1957” the use of a European typeface is advised. But this is general advice for all the 3 best proposals considering Europe’s rich tradition in type design and excellence in this field. A further recommendation is to provide an application manual for the logo, in order to ensure its correct application in every situation and to give specific rules on how the logo should interact properly with the EU identity.”

Readers of Law Pundit : The Finger Lakes District in New York State, USA

According to Google Analytics, our blog LawPundit has numerous readers from the Finger Lakes District in New York State. Indeed, together with the large number of LawPundit readers in New York City, where the LawPundit was an associate with a large international New York City law firm prior to coming to Europe, New York State is the Nr. 1 reader of the LawPundit blog in the United States, ranking only behind Nr. 1 ranked Trier in Germany (the region in which the LawPundit is domiciled) and Nr. 2 ranked Riga in Latvia (the region of the LawPundit’s family origins which has numerous readers because of our postings on Latvia).

We thought we would look into some facts about New York State and especially about the Finger Lakes District.

To start out with, we must confess that we were more than moderately surprised to read that New York State’s largest wine-producing region is the Finger Lakes District. The Wikipedia writes:

The Finger Lakes is New York’s largest wine producing region. Numerous wineries and vineyards are located in the region, prinicipally centered around Seneca, Cayuga, Canandaigua, and Keuka Lakes. Because of the lakes’ great depth, they provide a lake effect to the lush vineyards that flank their shores. Retaining residual summer warmth in the winter, and winter’s cold in the spring, the grapes are protected from disastrous spring frost during grape formation, and early frost before the harvest. With the passage of the Farm Winery Act in 1978, countless numbers of wineries have opened their doors to visitors from all over the world.

As written there further about New York:

New York is the nation’s third-largest grape-producing state, behind California, and second largest wine producer by volume. In 2004, New York’s wine and grape industry brought US$6 billion into the state economy. The state has 30,000 acres (120 km²) of vineyards, 212 wineries, and produced 200 million bottles of wine in 2004.”

We were also substantially surprised to read that New York State ranks among the top five states in America in agricultural production:

New York State is an agricultural leader, ranking within the top five states for agricultural products including dairy, apples, cherries, cabbages, potatoes, onions, maple syrup and many others. The state is the largest producer of cabbage in the U.S. The state has about a quarter of its land in farms and produced US$3.4 billion in agricultural products in 2001. The south shore of Lake Ontario provides the right mix of soils and microclimate for many apple, cherry, plum, pear and peach orchards. Apples are also grown in the Hudson Valley and near Lake Champlain. The south shore of Lake Erie and the southern Finger Lakes hillsides have many vineyards.

The glacial Finger Lakes when viewed on a map look like long fingers of a hand, whence their name. There are numerous lakes counted to the Finger Lakes (see map and list of lakes), of which the largest are Cayuga Lake and Seneca Lake, both of which are also quite deep, with Seneca Lake reaching a maximum of 618 feet. Mysterious are the booming sounds which periodically come from the lakes and are called the Guns of Seneca.

Interesting is the history of this region, which has made some substantial contributions to US life (quoted from the Wikipedia):

On the northern end of the Finger Lakes is also Seneca Falls, the birthplace of the Women’s suffrage movement, Waterloo, the birthplace of Memorial Day, and Palmyra, the birthplace of The Church of Jesus Christ of Latter-day Saints, also known as the Mormon Church.”

The 1788 Phelps and Gorham Land Purchase (the 6 million acre tract was later also known as The Holland Purchase) west of the Finger Lakes District was in its day the largest such land transaction in the world. The land was later purchased in part by Robert Morris, known as the “financier” of the American Revolution and at that time the wealthiest man in the United States, and later from him by the Pulteney Association and the Pulteney Estate, (see also here), which gave rise to substantial land problems in New York State.

In subsequent years, Morris lost his fortune and was even imprisoned for three years for his debts, which, in view of his contributions to the formation of the United States, was scandalous. Indeed, “Morris and Roger Sherman were the only two people to sign the three significant founding documents of the United States, the Declaration of Independence, the Articles of Confederation, and the U.S. Constitution.”

A study of Morris’s life shows that it is money – more than anything – that drives revolutions and guides politics.