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In the light of the ongoing patent war – most prominently the series of Apple v. Samsung lawsuits – in the smartphone and tablet computer industry (see also “The Power of Patents“), the current patent system has garnered harsh criticism. In a lenghty piece in the New York Times, Charles Duhigg and Steve Lohr criticize that “[i]n the smartphone industry alone, according to a Stanford University analysis, as much as $20 billion was spent on patent litigation and patent purchases in the last two years” and summarize the situation as follows:

[M]any people argue that the nation’s patent rules, intended for a mechanical world, are inadequate in today’s digital marketplace. Unlike patents for new drug formulas, patents on software often effectively grant ownership of concepts, rather than tangible creations. Today, the patent office routinely approves patents that describe vague algorithms or business methods, like a software system for calculating online prices, without patent examiners demanding specifics about how those calculations occur or how the software operates.

On his blog, economist and US Court of Appeals judge Richard A. Posner takes the same line, expressing concerns that “both patent and copyright protection, though particularly the former, may be excessive”: Read the rest of this entry »

Hugh Sinclair is a (self-described) whistleblower who recently published a book coming clean with the microfinance industry. Paul Lagneau-Ymonet and Phil Mader had the privilege to ask him how microfinance went astray and “betrayed” the poor, and why the public and donors are being deceived. His book “Confessions of a Microfinance Heretic: How Microlending Lost its Way and Betrayed the Poor” has been widely noted by international media and his blog follows the day-to-day antics of the microfinance industry.

Hugh, you worked in microfinance for 10 years, so you must have at least for some time believed in this as a tool for reducing poverty. When did you become disillusioned, and why?

I can’t say there was one moment of revelation. The first concerns started on my very first project. I was working in Mexico with a Grameen replica institution, and right from the beginning I noticed many of these people aren’t using the money for a productive use, and many of them aren’t actually very poor at all. But I told myself maybe I’m just in a bad institution.

I worked in Mexico for a couple of years, then I moved to Mozambique. There I discovered an even worse situation. Not only was microfinance not having much impact, but the institution that I was working at was misappropriating the savings of the clients. They were forcing the clients to make a savings deposit, and then they were using that deposit to subsidise their own operating costs, which generally involved paying high salaries to ineffective expat senior managers to fly business class and drive around in fancy 4x4s, which to me didn’t seem like a particularly good use of the client savings. It’s theft – I mean, you can’t just take people’s savings and spend them on your salary.So I thought: wow, this is a terrible institution. But maybe I’ve just been unlucky that I’ve stumbled into a few bad ones. Why don’t I go over to Europe and work at a microfinance fund, and my knowledge about the difference between a good and a bad microfinance institution will be useful to direct their money towards good microfinance.

“The problem is that [microfinance funds] have a weird set of incentives that aren’t aligned with their own investors, and also aren’t aligned with the interests of the poor.”

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In the series “algorithm regulation”, we discuss the implications of the growing importance of technological algorithms as a means of regulation in the digital realm. 

Yesterday, YouTube proudly announced on its blog that it had improved its “Content ID” system, which allows rights holders to automatically detect uploaded content that contains potentially infringing works, by introducing a new appeals process:

Users have always had the ability to dispute Content ID claims on their videos if they believe those claims are invalid. Prior to today, if a content owner rejected that dispute, the user was left with no recourse for certain types of Content ID claims (e.g., monetize claims). Based upon feedback from our community, today we’re introducing an appeals process that gives eligible users a new choice when dealing with a rejected dispute. When the user files an appeal, a content owner has two options: release the claim or file a formal DMCA notification.

In addition, YouTube claims to have made its algorithms “smarter” to reduce the number of unintentional Content ID claims:

Content owners have uploaded more than ten million reference files to the Content ID system. At that scale, mistakes can and do happen. To address this, we’ve improved the algorithms that identify potentially invalid claims.

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The Book

Governance across borders: transnational fields and transversal themes. Leonhard Dobusch, Philip Mader and Sigrid Quack (eds.), 2013, epubli publishers.
October 2012
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