The iPhone profit pie

Marketplace's Scott Tong had a great piece in yesterday's show about the chain of profits coming from Apple's iPhone.

Japanese, Korean, and Chinese companies pull in varying percentages of the profit from an iPhone by selling parts and, particularly in China's case, labor to Apple during the production of the phone.

The crux of the story is that, though many different companies across the world do much of the work to manufacture the iPhone, Apple still takes in an estimated half of the profit on every $300 iPhone, compared to, say, around $4 per phone for the Chinese companies who build them. From the transcript:

From China's perspective, here's the moral of the iPhone story: the dominant players in the global economy are the inventors and the brand owners: whether it's electronics, or cars, or clothing.

It's an important lesson! Intellectual Property is big money in the modern world, whether it's a patent for an innovative touch screen or a trendy Apple logo. Listen to the whole story here.

LO -- The Internet turns 40 today

On October 29th, 1969, while folks in San Francisco were getting together for events like this, scientists just down the Peninsula in Menlo Park managed to get two computers to communicate with each other.

With that first transmission (the computer tried to display "LOGIN" but crashed after "LO"), the Internet was arguably born, 40 years ago today. Happy birthday, Internet!

The story of the ARPA NET, the Defense Department project that laid the groundwork for the World Wide Web, is quite interesting. Here's a great summary from DARPA themselves, complete with a reprint of what appears to be a cocktail napkin sketch of the Internet, reprinted at the top of this post.

Because of evidence bungle, we may never get a verdict in the Fairey fair use case

Wired reported last week that Shepard Fairey lied to his attorneys and tried to destroy evidence related to his copyright infringement case brought by the Associated Press for his adaptation of an AP photo of Barack Obama.

Quick recap: Shepard Fairey, a visual artist known for his provocative street art, created an iconic campaign poster for the Obama 2008 campaign. Fairey did not reveal the model for the image in the poster, but when it was discovered that the portrait was based on a 2006 photograph taken by an AP photographer, the AP sued Fairey for using their image without permission.

The suit quickly became the basis for a hot debate on fair use, the copyright doctrine that allows for portions of copyrighted works to be used by others under certain circumstances. I've written about the case twice, here and here.

Part of the case was a dispute about which of two very similar photos Fairey based his work on. Last week Fairey admitted that he had lied about which photo he used and had tried to destroy evidence. He claims that it was initially a mistake, but that he continued to lie once he realized his mistake.

Many in the press have speculated that Fairey's ethical blunder may cause him to lose his case before the fair use element can be argued.

That would be a serious bummer. Interpretation of copyright law in the United States is largely based on precedent; a ruling in this case from a Federal judge would have offered some guidance on some very pressing copyright questions.

The case isn't closed yet, so I suppose you could say there's still "hope" that we'll get a ruling out of this after all.

Judge rules that cell phone ringtones are not public performances, teenagers on Muni rejoice

Wired reports that a federal judge has rejected a claim by ASCAP that a cell phone ringtone constitutes a public performance of a song and is therefore subject to royalties.

ASCAP is one of a few performance rights organizations collecting royalties on behalf of music publishers for music recordings that are played publicly, generally on the radio.

Companies selling ringtones must already pay licensing fees to record companies to create ringtones based on popular songs; ASCAP sought the right to seek further royalties, presumably from people whose ringtone-equipped phones ring in public.

As a supporter of reasonable application of copyright laws, part of me is happy about this ruling. I have to admit, though, that the librarian in me suspects that if people had to pay a little every time their cell phone went off in public, this might be a slightly more peaceful world...

In which our librarian considers an improvement to the simple umbrella

It is rainy today! Umbrellas are out in force, which got me thinking -- I wonder if anybody's patented an umbrella with a built in candy or gum dispenser?

Actually, to back up a bit, I began to think about umbrellas this morning on my walk in to work because I saw so many casualties to the wind that accompanied today's rain. We can put astronauts on the moon, but we can't come up with a wind-proof umbrella? (I guess there's no wind on the moon, but still...)

A Google search reassured me that there are plenty of innovative umbrellas on the market that at least claim to be wind proof, so ingneuity is not yet dead. Which got me thinking further -- what other innovations in the world of the umbrella have I missed? Could there be an umbrella Pez dispenser that I don't know about?

A quick search of the Index to Patent Classification shows that umbrella innovation is an active area of technology:

135 is a hot class! Check out all of the different subclasses for umbrellas:


And there are plenty of great patents. I just pulled a few from 135/16, Umbrellas Combined.

Here's an umbrella for a pooch:

This one has a pillow for when you're sleepy and it's raining:



No more watered down beverages when it's raining:




This umbrella's a good listener:




But really, I think many of us want nothing more than to curl up with a good book on a rainy day. Thanks to this final patent, that no longer precludes going outside:




Long live innovation!

Tavern on the Green is broke, but Tavern on the Green is worth millions

Here's a great illustration of how valuable intellectual property can be. The New York Times reported yesterday that Tavern on the Green, the venerable Central Park restaurant that has been in operation since the 1930's, has gone through some tumultuous times this year. New York City's parks department leased the rights to operate the restaurant to the LeRoy family in 1973. The lease expired this year, and the LeRoys lost the bid to renew their lease. However, though the LeRoys have lost the restaurant, the name Tavern on the Green is registered under the family's business name.

That means that the city cannot include the right to offer the business name, which was recently appraised at $19 million (!), to the new operators. The city seems to be preparing to try to retain the rights to the name in court.

$19 million, and that doesn't even include the silverware! That said, it stands to reason that, particularly with longstanding businesses, the brand can be every bit as valuable as the good or service offered. San Franciscans can think about it this way: would you eat at Blue's Coffee Shack?

Check out the USPTO's new digs

http://uspto.gov/

US Olympic Committe is testing the limits of USC Title 36, Section 220506 (d)(3)(c)

As the Olympic torch made its way through San Francisco back in April 2008, I took the opportunity to write a bit about the special intellectual property rights enjoyed by the US Olympic Committee. The long and short of it is that, by act of Congress, the USOC's right to use the Olympic moniker, or

“Olympiad”, “Citius Altius Fortius”, “Paralympic”, “Paralympiad”, “Pan-American”, “America Espirito Sport Fraternite”, or any combination of those words.

is protected under US Code Title 36, Section 220506. For some reason, I found this fascinating, and even wrote a follow-up post linking to funny Wall Street Journal Article about some of the would-be Olympic-style names that have been shut down over the years. Also of interest to me are the exemptions in the law, including some grandfather provisions and a very specific geographic exemption for

business, goods, or services [that] are operated, sold, and marketed in the State of Washington west of the Cascade Mountain range and operations, sales, and marketing outside of this area are not substantial.

Despite my expectation that such narrow exemptions would not make much of a difference to anybody, the AP reported this week that Olympia, WA's Olympian newspaper is the target for the USOC's latest lawsuit for infringement against their mark.

The Olympian has responded by pointing out that it has used the name since 1889 and that it resides West of the demarcation line.

As a brief personal aside, I'd like to point out that this has been a bad year for both newspapers and for the US Olympic Committee. Perhaps the USOC is feeling a bit down and is looking for an easy target upon which to vent...

Disclosure: USPTO freebies abound at SFPL

In light of a recent FTC guideline requiring bloggers to disclose payola, I'd better fess up to all of the free stuff that the USPTO has sent the San Francisco Public Library over the years.

Since 1995, the San Francisco Public Library has participated in the Patent and Trademark Depository Library Program, through which we receive electronic and paper materials and training from the US Patent and Trademark Office. Here's a sample of some of the stuff that we (and by we, I mean everybody in California and beyond who gets easy access to the materials) have gotten through this program over the years:

• Patents, patent applications, trademarks, patent reissues and certificates of correction, Official Gazettes, and bibliographic tools to find all of these documents. (These are available on DVD and CD ROMS here in the library, but lots of this information can be found online via uspto.gov.)
• USPTO annual reports, special reports, fee schedules, and directories.
• Paper copies of all issuing plant patents. (They include lovely color photos, btw.)
• Manuals: MPEP, TMEP, TTAB, ETC.
• PubWEST -- I'll say more about that in a later post.
• Handouts and brochures. (Take a look at the list; we either have them all at the library or we can get one for you.)
• Perhaps most importantly, training and support for our librarians. It is because of this program that you are able to come to SFPL (and many other libraries across the country) and get in-person help.

USPTO working on ways to cut backlog

The USPTO is hoping to improve employee morale and cut back on its not-insignificant patent application backlog by revising the "count system" (a modified GSA pay schedule that includes pay incentives for patent examiners) along with some procedural changes in the examination process.

The Washington Post reports today that top brass on the patent side of the USPTO are working with the examiners' union to increase incentives for examiners to quickly and accurately work through applications. According to the USPTO press release, the changes will actually allow examiners more time to work on applications, but will provide opportunities for examiners to communicate with applicants before they begin the examination. Examiners will also get more credits for acting on an application early and fewer credits for recommending further examination.