Court Overturns Gene Patents

Commercial laboratories can’t patent naturally occurring genes after all, according a court ruling issued Monday.

Patents are supposed to cover inventions, so it would seem that the DNA of a naturally occurring living organism shouldn’t be able to be patented. The U.S. patent office, though, has been granting an exception to that based on a court ruling that allows “isolated” gene sequences to be patented. The new court ruling suggests that the patent office has misinterpreted the earlier ruling, which is meant to apply only an active product made from a physically isolated gene sequence. The routine laboratory activity of looking at, or testing, specific gene sequences is not what is meant by “isolating” them.

If this ruling stands up on appeal, as I expect it ultimately will, it will invalidate all patents on naturally occurring genes. This means scientists who discover important gene sequences will not be able to gain a copyright-like protection of those gene sequences by using the patent process. It also means that a new genetic test must involve a novel, non-obvious testing procedure to be patentable. You can’t patent a gene test you design if it uses industry-standard techniques and the only thing that is “novel” about it is the specific genes you are testing.

If genes are not “novel” in the legal sense and cannot be patented, it will open the door for more vigorous research into medical conditions. Many diseases have genetic components, but gene patents have prevented scientists from looking into these connections. Now, it appears, scientists will be free to investigate the genetic components of any disease they might be studying.

SCO Never Owned the Unix Copyrights

The jury is in. It is the end of the line for Unix — and Linux has prevailed in its most serious legal challenge to date.

The decision a jury made today was that the contract by which Novell sold development rights in Unix to SCO did not transfer any software copyrights to SCO. Most of the world has known this for about seven years — after all, the original contract, as vague as it was about some other things, was very specific about excluding copyrights — but it is now, finally, a legal fact.

This means that SCO spent a decade suing and threatening computer users for supposedly copying something that it never owned in the first place. It apparently means that Microsoft and Sun Microsystems paid SCO to license software that SCO didn’t own. It means that SCO never had a legal basis for its claim that Linux is a copy of Unix, because the Unix components that supposedly were copied into Linux were never owned by SCO in the first place.

For SCO, this is the end of the company. The company has been in bankruptcy for two years, had already fired its staff, then its executives, and is selling assets to pay its accountant and other expert help. The company had been pinning its very faint hopes on a lawsuit against IBM, but the lawsuit was based on a claim of copyright infringement that will now have to be withdrawn. It’s not clear whether the remaining claim of contract violations against IBM can go forward, but even if it can, IBM’s counterclaim against SCO for contract violations is probably much larger, probably about $100 billion larger. If the case against IBM could go forward, then, the likely outcome would be that SCO, which has basically nothing left as it is, would end up owing IBM billions of dollars. I don’t think the bankruptcy court will allow that. I expect the judge in the SCO bankruptcy will order a liquidation within the next six months.

To be clear, SCO’s copyright problem was not its most serious problem it faced in its litigation. SCO signed away its rights to the software it is suing over, and its case depends on courts finding that those licenses aren’t valid. SCO also had a contract with IBM, and its case against IBM depends on that contract being tossed out. It is hard to get courts to void contracts, and it may be impossible now that SCO is revealed to be a shell of a company with essentially no legitimate assets or business. Then there is the problem of the absence of evidence. In all its years of litigation, SCO never said who copied what; its case is essentially, “We’re pretty sure someone copied something of ours.”

For Unix, it is an ignominious end, to be bogged down in a failed campaign of litigation, not just against essentially the whole world of computing, but against the truth. Unix was already fading when SCO started its litigation campaign at the beginning of the decade. Unix may be the most influential operating system in history, but the key word in that statement is history. The Internet runs on Linux, and as you may have heard, the Internet has some influence on the computer industry. In 1990, there were around 100 versions of Unix that mattered, but by 1999, there were only three. Those came from Digital Equipment Corporation, which was bought out and shut down years ago; Sun Microsystems, which appears to be facing the same fate now; and IBM, which became convinced around 2001 that Linux was a more mature and stable operating system than its version of Unix. So at this point, there are no major companies backing Unix.

The promise of Unix, in the 1990s, was of generally compatible computer operating systems from a wide range of companies, and that had already disappeared by 1999. The only hope for Unix was the possibility that a company would take it on and bring it up to date. I supposed it is a sign of how far gone Unix was already that the development rights ended up in SCO’s hands, and its fate was sealed when SCO decided to hire lawyers instead of engineers, to try to shut down Linux in court instead of competing with it.

But it’s worse than that. In the course of the SCO litigation, people have been taking a closer look at how Unix came about. It turns out that more than half of the source code for Unix System V, the first fully functional version of Unix, was taken from BSD. History books have described BSD as an imitation of Unix that was created mostly by graduate students at the University of California at Berkeley. From what we know now, it is more accurate to think of BSD as the original, and Unix as the copy. Essential ideas in BSD originated in Unix, but the imitation is larger in the other direction.

Unix may have faded away, but BSD, with its more mature, up-to-date technology, did not. In fact, it did not influence just Unix. It has also influenced core functionality found in Microsoft Windows and Mac OS X.

For computer users at large, the decision today means you can go ahead and use your computer without worrying about being sued by SCO. SCO made headlines by claiming to own a piece of Linux and threatening to sue essentially all the computer users in the world. We now know it doesn’t have grounds to sue anyone. You may proceed to browse the Internet without fear of someday having to write a check to SCO.

Don’t Look Now, But Your Unemployment Just Ran Out

Don’t look now, but your unemployment compensation just ran out. That’s if you lost your job in the early stages of the economic downturn and have been unemployed for most of the time since.

The Senate was unable to vote on extending unemployment compensation because of a filibuster, which came after Republican leaders in the Senate threatened to filibuster every item of business that came before them as retaliation for the health care reform reconciliation bill. They didn’t really mean it — they have let some routine measures go by — but the idea of unemployment compensation was more than they could stomach at the moment.

I’ve been warning that there will be a lot of workers who will go jobless for six years, a scenario never before seen in the U.S. economy. And the possibility of becoming unemployed, and then having no income for a period of time, has to be putting a damper on some households’ spending plans. I expect this effect to show up in the next consumer confidence reading, even if the Senate eventually approves a compromise plan that will extend unemployment for a few more weeks. There is reason to worry that, when it comes to unemployment compensation, the patience of Senate Republicans is starting to wear thin.

The Beer Commercial Party

If you look at the litter along the side of the highway anywhere in the United States, it is hard not to notice that beer is disproportionately represented. Beer is a tiny fraction of everything that is manufactured and consumed in the country, but its containers provide almost half of the litter that ends up on the roadside.

The empty beer bottle tossed aimlessly at the side of the road speaks of social isolation. There is a reason the drinking driver can’t take the beer, or the empty bottles, home. Their reputations would suffer. This, of course, is very much at odds with the commercial image of beer.

In the television commercials, beer is surrounded by parties and fun social occasions. That’s a fair picture of the way most American adults approach beer, but most of the beer is going to another kind of drinker. It takes a house full of party-goers on a Saturday night to match the weekly beer consumption of one Joe Six-Pack, the serious drinker who has the potential to drink more than half a gallon on any given day or even during a single sports event. So the beer on television might be on its way to a lively social occasion, but most of the beer that comes out of the factory is going to people who will consume it furtively, the victims of a habit that they would rather not have observed — or not counted, at least.

The beer commercials are an impressive piece of misdirection, then. For the people who drink most of the beer, the everyday, serial beer drinkers, the commercials let them imagine that skulking around drinking beer is almost like going to the parties that they haven’t been invited to. And for the people at the party, the commercials are careful not to give any hint that the beer bottles they are holding in their hands are exactly like the ones that many of the real beer drinkers have left at the side of the road.

Pay Cash, Feel Rich

I am seeing people paying in cash more often in commercial transactions, and for some people, it seems to significantly affect their self-image and the meaning they associate with their actions. When you pay with a credit card, you might understand that you are paying with the bank’s money, and this can lead you to feel that you have no money of your own. Many people have the same feeling with debit card payments, perhaps reflecting the very complex bank rules that surround these transactions. But almost everyone who pays in cash seems to feel that they are paying with their own money is borrowed.

For some people, the change from paying with a card to paying with cash leads them to suddenly feel rich. At the same time, it may lead them to take their spending decisions far more seriously. The self-talk seems to involve statements like these: “Look at all the money I have. I must be important. That means the way I spend money is important. I have to set a good example in the way I spend money.”

None of this makes sense in the accounting sense. You can, in theory, spend money in exactly the same way, with the same quality of decisions, regardless of the form of payment. But money is not just an accounting abstraction. Money is magic. If you discover that using money in a certain way makes you more magical, then do it that way, and don’t worry if your inner accountant argues that it shouldn’t.