The Growth in IP Statutes

Landes and Posner's slim volume on the political economy of IP law is worth a read, and at under thirty pages, it's not that much of a time commitment. Among the many gems inside it is this graphic on the growth of U.S. IP statutes (in terms of words and pages):

Admittedly, this a crude measure of statutory growth. Still, as of 2000, copyright was leading with patent law second and trademark law third.  (Both patent and TM lagged growth in the U.S. Code generally.)

The AEI has a PDF version of the book here.

Making Money from Free Content

Chris Anderson gives a nice summary of revenue models for free content:

Here's my start at a list all the revenue models you can find in the media industry, all based around a core of free or almost-free content:

  • CPM ads ("cost per thousand views"; banner ads online and regular ads in print, TV and radio)
  • CPC ads ("cost per click"; think Google ads)
  • CPT ads ("cost per transaction"; you pay only if the customer brought to you from a media sites becomes a paying customer. Here's an example.)
  • Lead generation (you pay for qualified names of potential customers)
  • Subscription revenues
  • Affiliate revenues (think: Amazon Associates)
  • Rental of subscriber lists
  • Sale of information (selling data about users--aggregate/statistical or individual--to third parties)
  • Licensing of brand (people pay to use a media brand as implied endorsement)
  • Licensing of content (syndication)
  • Getting the users to create something of value for free and applying any of the above to monetize it. (Like Digg or our own Reddit)

UPDATE: Michael Cader suggests a few more good ones (some of which are exhibited in his own Publishers Marketplace)

  • Upgraded service/content (ed: aka "freemium")
  • Alternate output (pdf; print/print-on-demand; customized Shared Book style; etc.)
  • Custom services/feeds
  • Live events
  • "Souvenirs"/"Merchandise"
  • Co-branded spinoff

UPDATE2: Fred Wilson adds: (see his comments section for even more)

  • Cost Per Install (popular with top Facebook apps who can help others get installs)
  • E-commerce (selling stuff directly on your website)
  • Sponsorships (ads of some sort that are sold based on time, not on the number of impressions)
  • Listings (paying a time based amount to list something like a job or real estate on your website)
  • Paid Inclusion (a form of CPC advertising where an advertiser pays to be included in a search result)
  • Streaming Audio Advertising (like radio advertising delivered in the audio stream after a certain amount of audio content has been delivered)
  • Streaming Video Advertising (like streaming audio but in video)
  • API Fees (charging third parties to access your API)

Risk Shifting in Licenses

This article by William Denny is a few years old, but it gives a nice summary the ways parties to a license agreement shift risk:

A. Express and Implied Warranties The extent of warranty protection in a software license is usually a matter of business leverage. Basic warranties usually included in a license agreement are that the software materially conforms to the specifications and documentation, that the vendor has good title to the software and has the right to license it free of any encumbrances, and that the software is virus-free and does not contain worms, trojan horses or other harmful code. Often there is a time duration associated with express warranties.

B. Indemnification Against Third Party Claims Indemnification clauses deal with third-party claims or suits against one of the contracting parties. A common indemnity clause in a software license agreement is for the vendor to defend and indemnify the customer and hold the customer harmless from and against third party claims for infringement of intellectual property rights, for claims of injury, death or property damage brought by the vendor's employees, agents or contractors resulting from services at the customer site. Because third party claims are not within the contracting parties' control, the damages resulting from such claims should be addressed separately from other provisions allocating risks between the parties.

C. Limitations of Liability The limitation of liability section typically relates to the liability of the parties to each other, as opposed to third party actions covered by the indemnification section. These provisions normally include a mutual waiver of incidental, consequential, indirect and punitive or special damages, and an overall cap on the vendor's liability to the customer for direct damages. A larger or more influential customer may negotiate certain exceptions to the mutual waiver of incidental or consequential damages or to the cap on direct damages. For example, a vendor may agree to carve out an exception to the waiver of incidental or consequential damages in the event of breach of the confidentiality provision, or it may agree to exclude from the cap on direct damages any liability resulting from its gross negligence.

D. Insurance An insurance provision is important where the software is part of a business critical application in the customer's business, and there is no commercially reasonable alternative in the market. It is also important in cases where the vendor will have its personnel performing services at the customer's site. The customer should ask the vendor to provide complete commercial general liability coverage, workers' compensation coverage, automobile liability coverage and employee fidelity coverage. If the vendor is going to customize software to meet the customer's unique requirements, the customer should request data processing errors and omissions insurance.

The rest is here.

Beware the Flirtbot

Ever since the computer was invented, people have wondered when such machines would be able to think. In 1950, mathematician Alan Turing suggested a simple test for computer intelligence. If a computer can fool a human being into thinking it is also human, said Turing, the machine should be considered intelligent.

Turing died in 1954 but must have rolled over in his grave last week when the Turing test's reputation hit a new low: security analysts discovered a "sex chat" computer program so lifelike it was fooling customers into disclosing their personal data.

The program is called "CyberLover" and exploits a technique long known to security researchers as "social engineering," a fancy term for manipulating users into disclosing information. What's new with this con is that the one doing the social engineering is a computer program.

And a hard working one. According to Ina Fried (citing a report from PC Tools), CyberLover "can work quickly, too, establishing up to 10 relationships in 30 minutes.... It compiles a report on every person it meets complete with name, contact information, and photos."

Of course, the user must volunteer this information, which raises another intriguing question: Are users who are naive enough to give out personal information to a computer sex-chat program able to pass the Turing test themselves?

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