ACT - Protecting Small Business Innovation

Cablevision Lawsuit Didn't Stop Innovation

Yesterday the Supreme Court declined to hear the television and movie producers' appeal from a Second Circuit decision which held that Cablevision's new Remote Server DVR did not violate copyright law.

This case is a complex copyright case and it is easy to get lost in the weeds.  However, I think there is value in looking at the big picture here.

The lawsuit didn't stop innovation and the court decisions in Cablevision's favor didn't somehow open the door for innovation to occur.

The innovation of a new technology service was already created when the content providers sued.  And, although the parties chose to pursue legal remedies, there is no doubt that the Remote Server DVR would eventually be offered to consumers.  It was just a matter of when and would Cablevision need to negotiate licensing fees with the copyright owners.

The Supreme Court's decision has its supporters and critics.  But what is important here is that the system worked.  Innovation is flourishing.  Copyright owners who make the content, on which technology thrives, legitimately sought to protect their interests.  Real issues of copyright law were debated. The courts determined where to strike the balance.  And consumers will experience new ways of enjoying media.  Yeah!

Third Verse, Same as the First? Open Gov Initiative, Phase 3

Phase three of the White House's Open Government Initiative ends this Sunday, and with it a tripartite experiment on receiving public comment about how to make government more open.

This is of course an important and monumental milestone. Never before have we seen the intersection of technology and public input to guide a governmental process on the front-end. Sure, we've been able to sound-off via email to our legislators when we support or oppose a bill, or file comments on a rulemaking--but there's never been a coordinated, proactive solicitation for general public input. That's why the Open Government Initiative is important.

It's certainly One of Good Intent. That the process was itself an open process is a mild achievement, given that the theme was how to make government more open. But transparency is hard to achieve even with the best intentions. It may be that by opening the floodgates to public comment, we've increased the quantity of input, but not the quality.

A New York Times article from earlier this week raises the notion that soliciting comments isn't easy, or maybe even productive. From the article:

[The White House] got an earful — on legalizing marijuana, revealing U.F.O. secrets and verifying Mr. Obama’s birth certificate to prove he was really born in the United States and thus eligible to be president.

Now, it's easy to pick out a few extreme examples, but see it for yourself--the vast majority of the comments are off-topic, and some are even offensive or just flat out bizarre. Very few seem to be substantive contributions to the important topic of making government more transparent, participatory and ultimately more accountable.

As Beth Noveck writes in the OSTP Blog, we're now in phase three of the open government initiative, which will be a "collaborative drafting process."  Hopefully this phase produces something of value, compared to the previous phases. We don't want the third verse to be the same as the first.  

After all, it's worth remembering that the whole point of this exercise is that when it comes to access to government information and better understanding of our legislative process, we don't want the same old song and dance.  

World Copyright Summit: What does gridlock have to do with copyright?

Recently,  CISAC hosted the World Copyright Summit in Washington,DC.  Having been to my share of intellectual property conferences, I didn't expect to hear anything new or interesting.  And while some panels did indeed beat the dead horse dead, a few panels and speeches presented new ideas and perspectives.  Mark Heller, a Columbia Law School professor, introduced us to the term "copyright gridlock." 

Heller stated that too much ownership of something, even copyright, creates "gridlock".  In other words, when something is divided into lots of parts, each of which is privately owned by many different parties, this thing will not be utilized to its full potential because the various parties will pursue their own interests.   This, he argues, prevents wealth and innovation.

Heller used the following examples to illustrate his point: 1) The Martin Luther King documentary, "Eyes on the Prize" could not be performed because the movie makers could not identify all the rights holders and get the necessary licenses; 2) a drug company with an alzheimers drug isn't able to navigate the patent rights to get all the necessary licenses so it shelves the drug; 3)  the airwaves not being utilized because of thousands of owners; and 4) increased air travel delays because land owners near airports are not willing to sell which prevents the construction of new runways.

Heller says that the new economy is all about "assembling ownership."  Copyright owners, he contends, will actually negotiate better deals when they approach the situation from the perspective of all the copyright interests working together to get a good deal that in turn benefits the public. 

To that end, he suggests copyright owners do the following to reduce the "gridlock"; 1) take steps to make sure that copyright owners are easily identified because users generally want to pay for use; and 2) should rethink voluntary vs. compulsory licensing.

So, all in all, a very interesting presentation.  It certainly provided a different perspective on copyright ownership, licensing, the public interest, and the balance between all the interests.  It really shifted the focus off the rights of the content owners to control use of their works to more of their responsibility as a collective whole to work together for the benefit of the public.   As a result, wealth and innovation will grow.  Copyright and patents will become less and less important to owners and the process of marketing and producing will be more important.

Okay- I agree that it behooves copyright owners to work together to create the easiest possible ways to license their works.  But, as the questions to Mr. Heller show, this theory is not without its flaws.

As one audience member pointed out, Mr. Heller's theory is a a very simple view of the costs involved.  His examples didn't take into account the costs of what would happen without the gridlock. That gridlock, in a sense, may have a value in that it balances the interests and without which the result may be less desirable than the gridlock. What is the cost of the new economy of "assembling ownership"?  What impact would compulsory licensing have on content owners and the incentive to create? 

Another audience member questioned the position that "copyright gridlock" actually exists since there has been a massive increase in the availability of entertainment content that can be accessed and downloaded legally.  Mr. Heller's response that the measure shouldn't be the quantity of content available but rather if the content available is what consumers actually want didn't work for me.  I can't think of anyone who hasn't been able to find the entertainment content they want online- even the most obscure genre or niche. 

In the end, I appreciated Mr. Heller's position that content owners should try to collaborate as much possible, within the boundaries of anti-trust and consent decree restrictions, to license content quickly and easily.  However, broad spectrum compulsory licensing is not the solution for "gridlock".  Taking away property owner's ability to negotiate terms and rates that are in their best interest will instead act as a disincentive to innovate.  We need to keep the road open for individual creators and innovators to pursue business models that work for them.

IP Education -- Gettin' 'em Young

A few weeks ago I blogged about the various events that were held around town in conjunction with World IP Day on April 26.  At one of the events, there was talk about how to put an end to a culture of piracy among young people. The USPTO showcased their InventNow educational campaign, created in conjunction with the Ad Council and the National Inventors Hall of Fame, to educate kids early on the process of coming up with cool ideas and then protecting them. At the time I questioned what we’re going to do about the segment of young people for whom Internet piracy—particularly of music, movies, and games—has always been a reality with little consequences. Are we going to write them off as hopeless in this regard? What tactic or messaging would really get through to someone who is currently in the 12-24(ish) range?

Our pals at the Copyright Alliance recently launched an educational foundation, the aim of which is to educate teachers and librarians about copyright and how to pass that knowledge to their students.  Their lesson plans are specialized for every grade level, and involve a teach-the-teacher aspect. CA has plans for a more broad distribution this fall. There are also plans for specific outreach to student s engaged in the arts—music, photography, writing, etc.—to explain how copyright affects them and their works.
I love these approaches to teaching kids about intellectual property, especially since parents too often find themselves on the other side of the technology gap from their kids.  Unfortunately, they wouldn’t have the slightest idea of Susie is illegally downloading music or movies (until they’re hit with the lawsuit for it, that is). Getting kids to understand ownership of ideas and the rights associated with them early on will help prevent the abuse of those rights later. (Especially since we know that trying to scare the heck out of them didn’t work.)

All of these elements—InventNow, CA’s educational foundation, and our Innovators Network—work together and complement one another over a period of years in a person’s life to help them understand, appreciate, and maybe even build a business around intellectual property. It’s great to be in such fine company and working toward this goal.

Update: A friend also brought this to my attention--sites that teach young/junior "marketing folks" about copyright, fair use, etc.

When You're Getting Software or Other Stuff on the 'Net for Free, what are the Costs?

Come one, come all. ACT will be hosting a lunch event next Tuesday (June 23) at noon on privacy, free software, and government procurement.  

We’ll discuss “free” software (ie. no license fees, free as in beer). It’s a nuanced take on some of what Chris Anderson will surely be talking about in his upcoming book on Free—where does the $ come from in software that we all use for free on the web, or that we download to our computer?

To answer this question, we’ll attempt to update traditional Total Cost of Ownership analysis for ad-based software and services. There’s a lot of discussion about privacy, security and sustainability considerations of cloud based solutions. In addition, the event will deal with skeptics who think that “free” means no business model at all. We’ll describe how free software and services are usually just one aspect of a larger enterprise geared toward expanding market penetration and increasing revenues. Mike Masnick described this in a recent Techdirt post.  

I'm going to moderate, and our speakers will be Rob Atkinson at ITIF, Tom Schatz at CAGW, and Peter Corbett of iStrategyLabs.  

We’ll be releasing a paper on all this, so come join us  for lunch and a lively discussion--and best of all, it’s FREE!!   

Further details are here.

David and Goliath Redux: Why We Filed an Amicus in TiVo vs. Echostar

Then David said to Goliath, Thou comest to me with a sword and with a spear and with a shield but I come to thee with naught but a sling and stone.

The story of David and Goliath is a familiar tale, but the modern retelling in the form of TiVo vs. EchoStar has an unfamiliar twist.  Instead of relying on its already sizeable advantages in money, power, distribution, and legal firepower, Goliath has asked the judge over and over again to ban the use of slingshots.  The question that concerns ACT and our members is: “Will all future innovative Davids be forced to face their Goliaths with nothing at all?”

Therefore, ACT has filed a rather unusual amicus brief with the U.S. Federal Court of Appeals in the patent infringement case between TiVo and EchoStar, in which we asked the court to deny EchoStar’s motion for a stay that would further delay the District Court’s permanent injunction order.  Working with Ray Millien, one of Intellectual Asset Management Magazine’s Top 250 IP Strategists and a potential candidate for head of the USPTO according to CongressDaily, our brief explains how this seemingly insignificant motion could have far reaching consequences to all innovative small firms.

While we have written about this case in the past, we are not a party to it, nor are EchoStar or TiVo members of our association.  In fact, we have never gotten involved in a patent dispute between two companies before. 

Creative Destruction, Not the Destruction of Creativity

Throughout our organizational history, ACT has borne witness to the transformative power of intellectual property, particularly patents, for innovative technology startups.  We have written about patent policy extensively, filed briefs in court proceedings, debated it with policymakers, and even launched an entire online community dedicated to helping startups manage their intellectual assets. We believe that this moment in this case represents a critical juncture in the patent system and its ability to serve the needs of entrepreneurs, including the more than 3,000 technology companies that ACT represents.

The entrepreneurs with great ideas and a grand vision, who built and rebuilt this nation, might have been relegated to mere historical footnotes without the patent system.  Lacking the ability to protect their innovations from larger, well-heeled competitors, companies like Hewlett Packard could have been easily bullied out of the market, or worse still, may never have entered it at all. The democratized American patent system, which is open to anyone regardless of their race, class, or gender, has provided such fuel to the fire of genius as to create an economic engine unlike any the world has ever known. 

If EchoStar is granted yet another stay in this case, the follow-on effects could undermine the entire value of the patent system for smaller firms.  The result would be a system that only served the most established, well-funded, and dominant players in any market - a system that would perpetuate the “destruction of creativity” rather than “creative destruction.”

An Unlikely Significant Moment in the Future of  Innovation

EchoStar’s latest motion to stay the injunction following a courtroom defeat may seem like an insignificant moment in an otherwise standard patent infringement case.  However, very little about this case is "standard." In fact, this case and its circuitous path through the legal system, demonstrates not only why entrepreneurs DESERVE the right to protect their inventions, but perfectly illustrates why they NEED to protect them from larger competitors. 

TiVo is an unquestionably innovative firm.  The TiVo is the kind of disruptive technology in which few established players would ever dare to invest, let alone bring to market.  It was technology that nobody knew they needed, that destabilized existing business models in the TV industry, and reinvigorated debate over fair use concepts like time and space shifting.  TiVo went forward and convinced many to invest in their vision.  The result was the creation of a product so powerful that it created an entirely new market and even a new verb.

The quality of TiVo’s patents is not in question.  While we have all seen poor quality software patents, everyone seems to agree on the validity and quality of TiVo’s patents.  They have withstood a re-exam at the PTO, and EchoStar is not challenging their validity.  In fact, many other larger firms that have entered the DVR market are already licensing them from TiVo (Comcast and DirecTV are well known licensors).

As the TiVo CEO explained to USA Today back in 2005, “the company was built on the concept that innovation and killer products can win the day over price wars and the clout of big cable companies.”  Even today, with a fully established product, TiVo continues to spend an astonishing 25% of its revenues on R&D. Let’s put that in perspective: the world's most respected innovator, Apple, is currently spending only about 3.3% of its revenues on R&D. 

Without a patent system to protect its investments in innovation, TiVo’s entire business philosophy would be quixotic at best.  Yet, the future of the American economy rests on our ability to inspire and reward those innovators willing to take the risks necessary to invent the next generation of technology.

EchoStar’s Actions Represent Why Innovators NEED to be able Protect Their Inventions

For small companies a patent is not simply about one claim.   A patent provides a clear message to competitors, partners, and investors that you have something of value.  It tells the world what you are working on, and why it might be important.  And while the right to exclude is a pretty key part of a patent’s value, sometimes what you really want to do is just send a message “don’t tread on me”! But EchoStar decided they could ignore the patents, roll out a copycat TiVo, and outlast them in court.

Of course companies have the right to defend against patent infringement lawsuits*, especially in an era where the patent pool has been poisoned with patents of incredibly poor quality.   But after the courts and even the U.S. Patent and Trademark Office had ruled in favor of TiVo, EchoStar kept appealing and asking for stays. It became clear they were never interested in stopping their infringement.  And it looks like it’s has been paying off:  during the stays EchoStar has been granted since the District Court decision in 2006, the company has leveraged that infringement to nearly double the number of its DVR subscribers! 

Without the injunction, the only message EchoStar will have gotten is “taking from the little guy pays dividends.” If EchoStar is able to validate its misbehavior, we may endanger the entire class of entrepreneurial innovators.

EchoStar is Writing the Playbook for Killing Small Innovators

After exhausting all of its options to appeal this case on the merits, EchoStar is now inventing new ways to stall in hopes that TiVo will simply die before they have to change their practices.  If only EchoStar’s engineers were as creative as their lawyers.

In essence, EchoStar has written the playbook for larger firms who want to trample on the IP rights of smaller competitors.  If the court does not rule these tactics illegal now, they will undoubtedly be employed by many larger firms looking to stifle upstart competitors or simply use their innovations without paying for them.  That is how this seemingly insignificant motion – and our Amicus response – could become critical for the future of the patent system.  And that is why the Appeals Court should deny EchoStar’s request for yet another stay in this case.

* After the Supreme Court’s decision in the MercExchange vs. eBay case it’s clear that injunctions are not an automatic right – and we support that concept.  What we like about the eBay decision was that the court continued to support the concept that an injunction was unequivocally an "equitable remedy."  In simple terms, shutting down an infringer is a legitimate, reasonable response.  And it is absolutely the kind of response you need when the infringer refuses to get the message.

2nd World Copyright Summit coming to DC this week

On Tuesday and Wednesday of this week, over 500 delegates from more than 55 countries are expected to come to DC for the 2nd World Copyright Summit.  Yahoo!News reports that one big theme at the Summit will be the threat posed to artists by digital piracy.  According to Kathy Garmezy, assistant executive director for government and international affairs of the Directors Guild of America, online piracy has become a bigger problem than counterfeiting.  She said that delegates to the summit will be looking to hammer out a united approach to illegal downloading.  Garmezy and others also praised the recent passage of “three strikes and you’re out” legislation in France, saying that the United States should take a stand to support France. 

Sweden might not be on France’s side, however.  According to a Yahoo!Tech article, the country’s Pirate Party, which wants to legalize Internet file-sharing, won a seat in the European Parliament.  Unfortunately, while the Pirate Party has attracted a big following among 18-25 year olds with its “fight for your right to file-share” maxim, the party’s politicians have not come up with any proposals on how to reimburse artists for their work or make digital distribution channels economically viable. 

As of July 1, all PCs sold in China will have to be shipped with software that blocks access to certain websites.  According to the Chinese government, the move will protect youths from having access to “harmful content,” such as pornography – however, it doesn’t take a genius to figure out that the software will also allow for yet more political censorship.  In light of this, it is not surprising that, as the Wall Street Journal points out, the main developer of the blocking software has ties to China’s security ministry and military. 

Google may say it doesn’t “do evil,” but the government doesn’t seem to be so sure about that.  In the past month alone, government agencies have targeted Google for antitrust review three times.  Then there is the private lawsuit alleging that Google tried to kill a business-to-business search engine with predatory pricing.  It’s not surprising, therefore, as the Washington Post writes, that former DoJ antitrust lawyer and recent Google hire Dana Wagner has rapidly gained influence at the Mountain View-based company.  Wagner, along with public policy spokesman Adam Kovavevich, is trying to convince advertising clients, public officials, reporters and academics that the company doesn’t have a competition law problem.  Warner and Kovavevich are claiming that Google holds only a 2.66% share of its total market.  The problem is that this claim only works if you believe that the company is not in the search advertising business but rather should be judged by its market share in the much broader category of advertising, which includes newspaper, radio and highway billboards.

Canadian mayors passed a resolution Saturday that would potentially shut out U.S. bidders from city contracts in response to the U.S. administration's "Buy American" policy.  The resolution, which according to the Seattle Times is nonbinding, passed 189-175 at the Federation of Canadian Municipalities conference in Whistler, British Columbia.   Federation president Jean Perrault said the fair trade resolution was developed in reaction to protectionist provisions in President Barack Obama's stimulus bill.  While a nonbinding resolution is more a gesture than anything else, it does show what a dangerous path narrow-minded protectionism puts us on. 

Time for EU citizens to take the European parliamentary elections seriously

European parliamentary elections are now a mere 5 days away, but a lot of EU citizens seem to be completely uninterested in voting.  According to an FT.com article, “[t]urnout in France, as elsewhere, looks likely to continue its steady decline after dropping to 43 per cent in 2004.”  The FT writes that many EU citizens now blame European integration for depressing wages and lowering social standards.  This can be partly explained by the EU’s hard-to-define nature (it is neither a nation state nor does it fit the mold of a mainly economic alliance of neighboring countries such as ASEAN), which, according to Science Po professor Pascal Perrineau, allows its citizens to see the EU as a “blank screen on which to project their social, economic and identity concerns.”  In addition, the EU’s power structures are complex and responsibility is divided among many different entities, meaning that decisions made in Brussels seem opaque and of only tangential importance to many citizens of the 27-nation bloc.  However, as the FT article points out, the economic crisis has shown the benefits of a monetary union – and, I would add, the importance of having structures in place that prevent countries from acting on short-sighted protectionist impulses brought on by the downturn.  Even for those who disagree, voting seems to me to be the better option than simply sitting at home on Election Day and then lamenting the direction the EU is taking. 

     
Have you ever noticed that a lot of Facebook updates are about your female (rather than male) Facebook friends?  Especially wall posts and photo comments tend to be written by women gushing about how cute their girlfriends’ new dresses/ babies / dogs are.  This impression is confirmed by a recent Harvard Business School (HBS) study, which found that most of the activity on a typical online social network is focused around women – “men follow content produced by women they do and do not know, and women follow content produced by women they know.”  The same is not true for Twitter, however.  According to a brand-new HBS study, men who use Twitter have 15% more followers than women (even though there is no gender gap when it comes to following other Twitter users).   Men also have more reciprocated relationships, in which two users follow each other.  According to HBS, these differences may stem from women having more stringent standards for reciprocating relationships or from males being comparatively more driven by followers than females.   Another interesting tidbit is the rates at which users tweet:  According to the study, just over 50% tweet just once in 74 days – but 10% of users create more than 90% of all tweets.  Silicon Valley Watcher’s Tom Foremski speculates that this might be due to the relative novelty of the medium, which has led to insecurity among some users about what constitutes an appropriate Twitter topic.  For example, it is okay to tweet inane stuff such as “eating a cheese burger at McDonald’s?”  The read the rest of Foremski’s thoughts, go here.   The HBS study can be found here. 

As we’ve pointed out before, a downturn can actually be a good time to start, or make additional investments in, your business.  Startups and VCs build businesses that will only be viable in three, four, or even five years from now, meaning that the VC and entrepreneurial communities have to be focused on what will be in the future, not on what the economic situation is like right now.  This view is confirmed by Inc.com, which recently published a ranking of “the best industries for starting a business” during an economic downturn.  The list includes a host of IT-related industries, such as iPhone apps, health care technology, SaaS, and education technology.  And, for those of you who are dreaming of changing your profession, candy, beer, wine and liquor wholesale, and yoga products and services are also among the recession-resilient industries identified by Inc.com.  To see the full list, go here. 

According to the Register, a Dutch website has been sued – and sued successfully – for the way Google summarized one of its pages.  As reported by De Telegraaf [in Dutch] and the Dutch blog 24 Oranges, a judge has ruled that the website Miljoenhuizen.nl is liable for a Google-generated page description, or "snippet," that may or may not give the false impression that a local BMW dealer named Zwartepoorte has gone bankrupt.  Apparently, Miljoenhuizen.nl had both the word “Zwartepoorte” and “bankrupt” on its page, but not side-by-side.  Still, Google results for the two keywords resulted in a snippet from the Miljoenhuizen.nl website that led some users to believe that Zwartepoorts had declared bankruptcy.  The court therefore found in favor of the BMW dealer.  According to an interpretation of the ruling by Joris van Hoboken, a PhD candidate at the Institute for Information Law at the University of Amsterdam, "[t]he Court argues that it might be true that the website [Miljoenhuizen.nl] had no control over the functioning of Google but suggests that these questions about the opacity of Google’s functioning should be addressed in a broader context... then concludes that defendant had its own responsibility.”

Can a method for buying or selling energy at a fixed price based on the expected weather for a season be patented?  Or are the only business methods that are patentable those that are connected to a machine or “transform” an item from one state to another?  That is the question the Supreme Court is currently considering.  The justices will review an earlier decision by the U.S. Court of Appeals for the Federal Circuit which narrowed the class of patentable inventions, excluding innovations without a physical component.  The Washington Post reports that issue is dividing companies, with Microsoft and IBM on one side and Accenture and Philips on the other side.  Whereas Microsoft and IBM want limits on business method patents, Philips has claimed that “the [appeals court] decision is overreaching.”  What do you think about the issue?  Let me know!   

Re-Setting the Record Straight: ICT SME's Are Not a Monolith

There seems to be some kind of misunderstanding.   We have worked productively with PIN-SME on issues regarding ICT SMEs in the past, so we were very surprised to see the attack they launched against us today.

For those who don’t know, PIN-SME is a recently created organization whose members are regional ICT-related trade associations from throughout Europe (whose individual members are automatically counted as part of the larger PIN-SME organization).  They do a lot of great work on promoting the interests of ICT SMEs in Europe.  We don’t always agree with them on methods or policy recommendations, but we always agree on the goal of improving the environment for ICT SMEs in Europe.  The European Commission’s complaint against Microsoft for integrating Internet Explorer and its underlying technology into Windows is one such area of disconnect.

ICT SME’s Are As Diverse as Europe Itself

What is disturbing is that PIN-SME makes the following argument in their attack:

“We would like to set the record straight”, said PIN-SME Secretary General Sebastiano Toffaletti. “European SMEs fully support the European Commission’s efforts to stop Microsoft’s tying practices, which are detrimental to the innovation potential and future competitiveness of ICT SMEs as developers, content providers and users. The opinion of ACT is a biased voice that does not represent the point of view of European SMEs.”

The leadership at PIN-SME should know better than anyone how dangerous it is to treat all European SMEs as some monolithic entity.  ICT SME’s are as diverse as Europe itself, and to suggest that all of them agree on ANY position is a mistake.

74 ICT SME’s from 21 European Countries signed a statement of concern about the European Commission’s proposed remedy in this case, which we included in our submission to the EC.  Is PIN-SME suggesting their views are not legitimate? Are they saying any SME that disagrees with the PIN-SME position cannot be a real SME?  I’m sure that would not be the case if someone asked them, but they certainly infer it in their statement.

Misreading the ACT Position

PIN-SME incorrectly asserts that ACT believes “SMEs should benefit from the existence of the Microsoft monopoly in the browsers market.”  We have never said that nor do we believe it in any way.  

In fact, our primary interest in this case is not the browser market itself, but the collateral damage the Commission’s remedies would impose on software developers that are creating desktop applications and web-based software that leverages desktop applications.  Despite the assertion PIN-SME seems to be making, the interests of these developers deserve to be heard and protected.

We do have serious questions about the European Commission's case given that the evidence suggests we already have a world where a “variety of open and standards-compliant browsers exist in a market of vigorous and undistorted competition.”  However, the focus of our submission to the Commission was the proposal to rip out or lock the underlying code behind Internet Explorer.   This code and the Application Programming Interfaces (APIs) it provides are critical to software developers and cannot be replaced by alternative browsers. This technology is used by many desktop programs to access information or updates on the Internet without ever having to launch an actual web browser. As we said in our blog:

To desktop software developers, Internet Explorer is NOT a competitor to Opera or Firefox.  Opera, Firefox, Google Chrome and Internet Explorer compete for consumers to use their applications when they browse the web.  However, Internet Explorer provides software developers with something that Opera, Firefox, and Google Chrome simply can’t offer: a robust platform for application development that enables developers to save time and development costs…Simply put, Internet Explorer expands the Windows development platform and Opera, Firefox and Chrome are merely web browsing applications

There has to be a better way than ripping functionality out of Windows that developers rely upon to address the Commission's concerns.  The Commission is not just talking about removing the desktop application we know as Internet Explorer, but enormous amounts of technology that are leveraged by software developers in order to write programs in less time and with lower costs. 

We look forward to talking to PIN-SME and the Commission about our concerns, and clearing up any further misunderstandings.

Health Care and Entrepreneurialism

Over at the Kauffman Foundation’s entrepreneurship blog, Jonathan Ortmans has a post about “unlocking entrepreneurship through health care reform” wherein he writes about how the employer-provided healthcare system constrains entrepreneurialism, as it’s too expensive to provide for employees and generally too expensive for employees of small firms to buy on their own with after-tax earnings. Ortmans rightly talks about decoupling health insurance from employment, a suggestion made by many groups that support small business-friendly policies. I agree.

But I misread the title of his post at first and expected it to be about something else, namely how innovative entrepreneurs will be the ones who truly transform health care. Ortmans wrote about how we shouldn’t discourage entrepreneurship through health care reform—I think we should also be talking about not discouraging entrepreneurship in health care reform. Since he didn’t go there, I will.

Unlike the attempt that was made in 1994, something will be happening with health care this time around. What exactly that “something” will be is still to be determined, but there are billions and billions of dollars from the American Recovery and Reinvestment Act committed to various health care and health IT (HIT) projects, including a national healthcare IT infrastructure.  As these things are developed, though, we need to repeat important messages: Small firms are some of the most innovative in the country, create the most jobs, and the public overwhelmingly supports giving entrepreneurs incentives to innovate as opposed to allowing the government to create new jobs (directly or through large companies).

And because small firms are so essential to economic recovery and growth, let’s pledge to do a couple of simple things to keep the playing field level when it comes to HIT solutions. First, the government should remain technology- and business model-neutral. That means that the government should compile a list of goals and allow everybody—big and small and in-between, all varieties of intellectual property rights holders, well-known companies and new innovators—to offer solutions.  And while cost is obviously an issue (though it barely seems that way when we’re talking about 30 billion bucks), decision-makers should account for solutions’ total cost of ownership. Basically, the government should not pick market winners and losers by narrowly defining the specs, or outright creating preferences, for HIT solutions--the fundamental principles of promoting economic growth and healthy competition should apply to this process.

As Ortmans alludes in his article, there isn’t a one-size-fits-all solution for this (or any) problem.   We should keep in mind that HIT goals, including interoperability, can be achieved in many ways and don’t just magically happen on their own. It takes smart people creating innovative answers to problems to build sound solutions that will flourish throughout the healthcare industry. And since almost 80% of people don’t think that the stimulus package supports entrepreneurial activity (with 33% believing that it outright inhibits entrepreneurialism), this would be a nice way for the government to show its support for the innovators who are so crucial to economic growth.