Friday, September 14, 2007

Katsoulacos commentary in Wall Street Journal

The Wall Street Journal, which has been favorably disposed to patent reform, presents a commentary by YANNIS KATSOULACOS discussing the opportunity of the EU's Court of First Instance to reverse an earlier ruling against Microsoft by the European Commission:

In 2004, after a six-year investigation, the European Commission found that Microsoft had abused its dominant position in the software market in two ways. The first concerned the company's "bundling" of its Media Player for digital music and videos with its ubiquitous Windows operating system. The second involved Microsoft's alleged refusal to supply its competitors with the details of how its Windows products for computer servers interact. As a result, the Commission fined Microsoft a record €497 million. It also ordered the company to market a version of Windows without Media Player -- a product which consumers subsequently judged to be worthless -- and forced it to license interoperability technology on "reasonable terms" -- a remedy that has proved very difficult to enforce.

Katsoulacos concludes:

There is probably some truth in the claim that the Commission's very tough regulatory stance has forced Microsoft to become a more "responsible" company in some aspects -- particularly in regard to interoperability. However, the net effect of the decision, especially if upheld by the Court of First Instance, will very likely be negative -- increasing legal and business uncertainty and harming European companies and consumers.

Like many of the patent reformers in the U.S., Katsoulacos is an economist. One notes the net effect of implementing a post grant review of patents in the U.S. will be to INCREASE legal and business uncertainty.

LBE had written in his full text for "Spring Seminar 2007":

The fact that most members associated with the NAS/STEP study (as well as Jaffe and Lerner) are not scientists, engineers, inventors, or patent law experts should be contemplated in assessing the proposals. One can view this as an effort by economists to "flex their muscles" in patent law policy, possibly as payback for the famous line: George Priest went so far in 1986 as to say that economists could tell lawyers virtually nothing about the appropriate scope of intellectual property rights. See the IPBiz post, What have non-technically trained lawyers contributed to IP law?, The fact that the study is associated with STEP should also be contemplated. STEP is a relatively recent addition to the National Academy, allowing for input from economists. The patent study was self-initiated, but the study as a whole received diverse support from government agencies, foundations, and corporations. The National Aeronautics and Space Administration sponsored the project as part of its program support of the Board on Science, Technology, and Economic Policy (STEP) from 1999 to 2003.


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