Create, Consult, Control
News & commentary on intellectual property issues.
Jul152010 | Steve O'Donnell
Does downloading really hurt DVD sales?
The movie industry often blames flat or decreased DVD sales figures on file sharing, but are those that download the same group that would have otherwise bought a disc?
I don't know the answer, and I don't have any data to support a position, I was just thinking about this the other night and would like some feedback.
On the one hand it makes sense that at least some people wouldn't buy something they could get for free (even if that meant infringing a copyright and running the risk of getting caught). On the other hand, if movies suddenly weren't available through file sharing avenues anymore, how many people would move to Netflix or similar, and how many would start buying discs?
There are four options (maybe more): downloading, borrowing, renting, and buying. If downloading is removed, and you don't have a friend that already owns a movie, then the next cheapest option is to rent it. Buying is still quite a bit more expensive than renting.
I suspect that the businesses getting hit hardest by movie downloading are rental places, and since rental places don't seem to be complaining about their bottom-line, maybe movie downloading isn't hurting film makers.
I'm only talking about downloading movies out on disc. Movies still in theaters and other types of media all have their own issues.
What are you thoughts?
Jul072010 | Steve O'Donnell
What happens to patents when a company closes.
A couple days ago someone found this blog by searching for “what happens to a patent when a company goes out of business,” which is surprising, because I don’t recall posting on that. At least it’s less disturbing than the time this blog was found by someone searching for “how to seduce a swan” (I hope they were looking for this.
So, what happens to a business’ patents when the business closes? The answer is pretty close to what you’d hear if you asked “what happens to a business’ copy machine when the business closes?” Patents are property, intellectual property, and even though they differ from physical property in certain ways, in many ways they’re the same.
A closing business can do any number of things with a patent. It could assign or license it to someone, the patent could be part of the company’s assets in a bankruptcy reorganization or liquidation; it could auction it off or dedicate it to the public; the patent could also be left to expire on its own.
The “expiration” is probably what people mean when they ask what happens to patents when the owner goes out of business or dies. For a patent to remain in force, periodic maintenance fees need to be paid to the government. Whether this is for a laudable reason, such as prompting the early public dedication of unused patents or if it’s just another way that the government can extract money from people is a question you can mull over later.
Currently these fees are due at 3.5 years, 7.5 years, and 11.5 years after the patent issues. The cost of these fees increases with each payment. The first maintenance fee is $980, the second is $2480 and the third is $4110 for a large entity and half that for a small entity. I’ve never thought of it before, but those are some strange amounts. If anyone can explain them to me, please leave a comment.
If those fees aren’t paid, the patent expires prematurely. If they are paid, a utility patent will normally expire 20 years after its filing date.
So I guess the answer to the question is closer to that for “what happens to a business’ car when it closes?” Not unlike a car, a patent can be sold, transferred, etc. Also, if a patent is left to languish and isn’t maintained it can be irretrievably lost.
If you’re concerned about a patent, the best thing to do is to have a patent attorney research the patent’s file and determine the best course of action.
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Comments
For example, my wife and I have a Netflix account, and we stream content from Netflix to our TiVo. We've got a queue of probably 30 movies ready to be watched. I put a lot of those movies on there thinking I'd be interested in them, but on the list they remain for months, waiting for me to click on them.
The transactional costs for me to queue a movie on Instant Netflix are pretty low - I browse movies on my computer and click to add them to my queue. If I never watch them, I'm not out a whole lot - 15 to 30 seconds of time. Pirating a movie from a torrent site doesn't impose a heavy transactional cost, either. With fast downloads, a DVD pirate can grab lots of movies that he/she may be interested or may watch some day in a short amount of time(I think). Were stealing more difficult, I would venture to guess that the pirate would go after only the movies he really wants to watch, i.e., those that he would probably be willing to spend money on. But, downloading ain't hard, so he goes willy-nilly picking every independent flick and documentary out there. Those aren't true lost sales, because the pirate never would have bought them in the first place.
Well, that's all just a rambling conjecture posing one possible explanation. That said, I have heard very small filmmakers (sub $1 million budgets) talk about the very real effect that downloading has on them and their crew.
There is a gap in the industry, there is a demand for smaller files to store on hard drives that the movie makers are not filling. They are blaming poor sales on downloading, but fail to see that poor sales come from poor films. Good films still make money at the box office and in DVD sales.