One of my favorite sayings is “Those who can’t innovate, litigate.” Many patent defends claim the patent system protects small inventors, but it more often seems as a way for large businesses to stifle competition. Look at recent lawsuit announcements and it’s a who’s who of no longer relevant companies who ceded their market leads by failing to continue innovating with market.

Apple has seemed like a company more focused on innovation. Even as Jobs proudly announced more than 200 patents related to the iPhone, Apple appeared to want to seriously compete in the mobile space by offering a more compelling product.  Those 200 patents did little to stop the many patent lawsuits lodged by marketplace losers against Apple including most recently Nokia (think, what was the last good Nokia phone).

Now Apple, rather than continuing to fund and innovate on the iPhone, has sued HTC, the maker of many Google Android phones, over several patents.  HTC and Google Android have been stealing much of Apple’s thunder in the mobile space and are both growing very rapidly (thanks, in part, to Google’s free and open-sourced operating system allowing HTC and other phone manufacturers to innovate and create compelling phones). Apple apparently thinks its worth spending millions of dollars on lawyers to sue HTC rather than spend that time and money making an even better iPhone.

Apple suing HTC, and by association Google, is a thinly veiled way of saying they’re scared of competition. Yes, Apple has a legal right to sue over patent infringement (even though most patent lawsuits are not over willful infringement but because two companies came up with the same idea but one patented it first), but what is gained from these lawsuits, aside from making lawyers richer. Rather than out-innovate and compete in the marketplace, as is object of capitalism, Apple would rather sue to keep quality products out of consumers hands. Enjoy that AT&T 3G. We might get stuck with it.

For years, the U.S. has turned away smart, in-demand immigrants because of the limited number of H-1B visas it grants. Most regrettable is these highly trained and highly paid workers are also high in demand and often create more jobs than they fill. Instead, these workers attended U.S. universities only to return to their home countries to build companies, technology, and jobs.

Last year, Brad Feld started a movement to add a startup or founder’s visa to any immigrant who starts a company in the U.S. The Senate is now considering just such a bill called the Startup Visa Act (full text PDF here) that will encourage immigrants to stay and build companies here in the U.S. creating new jobs and new opportunities.

Certainly not every startup will succeed (no guarantees for U.S. citizen startups either), but as any venture capitalist knows, you only need one or two to take off to shake up an entire industry: see Google or Apple, Microsoft, and IBM of yesteryear. Our goal should be to make sure the next generation of Googles and Apples are founded in the U.S. as that ensures more jobs and more prosperity for the next generation.

Hand eye coordination and faster reaction times often get credited as benefits to playing video games, but how about strategic thinking or even the way athletes play their games?  Chris Suellentrop from Wired explains on how the current generation of athletes, now college graduates who grew up playing sport video games, are changing the way sports, especially football, are changing.

Similar to the computer opponents in chess and online poker players, video games simulations of football, like the popular Madden series, have become so detailed and accurate, that athletes and their coaches are using these games to train for games and research possible plays and outcomes. Madden has even been used to correctly predict the winners of five of the last six Super Bowls and the AFC and NFC Championship winners within 3 points.

With years of basically computer training, athletes moving up from high school to college and then professional have a better understanding of the game – they can read the other team better and make faster decisions, requiring less apprenticeships. Wired goes into detail:

At the Pop Warner Super Bowl in 2006, the winning team had 30 offensive plays, which it had learned through Madden. (”I programmed our offense into Madden to help me memorize our plays,” one 11-year-old told Sports Illustrated. “It was easier than homework.”) Dezmon Briscoe, an all-conference wide receiver for the University of Kansas, credited Madden 2009 with teaching him how to read when defenses “roll their coverages” — move their defensive backs to disguise their strategy. Chuck Kyle, a high school coach who has won 10 state championships in football-mad Ohio, has programmed his team USA playbook into Madden and uses it to teach players their assignments. So have coaches at Colorado State, Penn State, and the University of Missouri, among other schools. An offensive lineman for the Tampa Bay Buccaneers used the videogame as a preparation tool for an entire season, scouting his opponents digitally. While even-more-sophisticated software is available for virtual sports training, coaches and players at all levels of football say that Madden’s off-the-shelf simulation is good enough.

It’s likely much of the next decade will have a lot of “now that the gaming generation” type stories (hell, I’ve done two is as many weeks) as we start seeing the next generation of gamer movie makers, marketers, and other areas we can’t even predict. And so far, these gaming influences were far from intended but open up exciting possibilities for what can games, and technology, do next.

Record labels continue to flounder in the face of basic economics and 10 years of failed strategies. As part of their latest flip off to customers, Warner Music Group announced they will stop free streaming of music. While they haven’t clarified whether this means removing all current streaming deals, the idea is likely meant to remove a large portion of music from popular streaming sites like Spotify and Last.FM.

Warner Music claims there isn’t enough money being made from streaming, but once again, Warner Music is ignoring basic economics here and worse, ignoring a large market of customers who they can make money on selling true scarce goods.

First, if customers can’t find your music, then they’ll find someone else who’s willing to stream, share, and use all the marketing tools at their disposal. And for those who want Warner music, well, there are more than enough unauthorized sources that offer no direct revenue back to the labels. So Warner Music’s artists get less exposure and file-sharing still runs rampant. How is this suppose to increase revenue?

Warner Music could use streaming as a marketing tool to increase the value of scarce goods (not music files) like concert tickets, merchandise, or the many other new music business models we’ve seen.  And if they were really smart, they’d stop strangling music streaming services with onerous service charges that make it impossible to innovate and run a business.

Amazon has been selling eBooks at a loss in order to increase sales of the Kindle.  Amazon would buy the eBooks whole from publishers at about $12 and then sell the eBooks for $9.99.  But book publishers, who have been used to more than a decade of high profit hard covers, view these eBooks as a threat to their business rather than an opportunity (seeing a pattern here recording industry?).

Macmillan demanded Amazon change its pricing, focusing on more expensive $12.99-$14.99 charges for new books. Because of Macmillan’s demands, Amazon removed all digital and hard copy versions of Macmillan’s books.  The books and digital versions have since returned with the Amazon agreeing to taking a 30 percent commission from eBook sales rather than buying them wholesale. The result means Amazon will actually make money now on eBook sales and ironically, book publishers make less (30 percent of $15 is still less than the old wholesale price of $12.99-$14.99).

You have to wonder whether Macmillian and book publishers have paid any attention to the past 10 years, watching the recording industry shrivel up as it fought tooth and law brief against digital media (and still hasn’t given up on its road to irrelevance).  First, my belief is that book publishers know increasing eBook prices will hurt sales. This is made apparent by several publishers’ urging to delay eBook releases for weeks after the hard cover. Much like movie companies delaying Netflix rentals a month after the DVD is released, book publishers don’t want to siphon readers away from their high margin hard cover books.

Of course, this only annoys customers. If customers want the eBook but one is not available, there are more than enough unauthorized versions on file-sharing networks on the day of release. You can’t compete with free by staying home and sulking.

But then book publishers want to charge higher prices. Well, let’s see how well that done for the recording industry on iTunes. iTunes allowed higher and lower prices on music beginning last year and the results have shown such a large drop in unit sales that overall revenue is down.  Growth in digital sales slowed from 20 percent in 2008 to 8 percent in 2009. While yes there was still growth, that is a massive drop in a still infant industry. The price elasticity of digital goods is extremely sensitive to increases in prices (and seems even more sensitive to drops, as video game download service Steam has successfully proven with its sales).

As I and others will say over and over again, digital goods are infinite goods. Basic economics says their price should be zero. And there are several examples of free eBooks actually increasing the sales of the actual book. But economics and real-life examples don’t matter when you have a former monopoly on distribution to protect. But business evolves and like the recording industry, book publishers may be in for a difficult decade.

I believe I caught this issue early. All the pages on Prodigeek were forwarding to different sales sites. It does not seem like malicious code was downloaded to anyone’s computer, but of course, any bad code is not good. I’m bumping up some more security plug-ins so hopefully this will not happen again.

The Anti-Counterfeiting Trade Agreement (ACTA) has been under secret negotiation since 2006 aiming to crackdown on counterfeiting and copyright infringement around the world. Most nations already have many laws against these acts, yet the international community has found the need to establish a completely new trade agreement that officials say will not affect U.S., or other nations’, laws. And as for why it’s being written in secret, that is due to national security, as the Obama administration claims. What counterfeiting and online file-sharing have to do with national security is still top-secret.

I realized I’ve yet to dive into the ACTA controversy on Prodigeek even with my riveted fascination on the subject. Significant documents related to the accord have revealed a scary set of dream proposals written almost exclusively by media companies and those looking for stronger copyright laws. This includes proposals to force ISPs to monitor copyrighted content, instituting a three strikes law banning alleged infringers after 3 warnings, and increasing criminal charges against copyright infringement. Almost no consumer groups have been allowed in the negotiations, and on the rare occasions consumer groups have even been entertained, they have been forced to sign non-disclosure agreements making it very difficult to generate a true public debate. Recently when Mexico opened its discussions, entertainment companies laughed out those who brought up consumer interests. One person who live-Tweeted the event was forced out.

Politicians and media outlets are starting to grasp onto the lack of transparency, but there’s yet to be a public outcry at the content of the trade agreement. The U.S. Trade Representative and lobbyists from media companies continue to claim this agreement will not affect U.S. law while refusing to explain why its needed. What has happened before with TRIPPS and WIPO is exactly that – a trade agreement passes (because it gets less public scrutiny than laws), then Big Content goes around telling countries they have to change their laws to achieve harmony with their international agreements.

Also like TRIPPS and WIPO, the ACTA lacks any concern for consumers and their interests. It’s a trade agreement focusing on protecting powerful industries and supporting their obsolete business models, even going so far as to harm innovation in other industries by increasing penalties  for secondary or contributory infringement (meaning YouTube or eBay would be responsible for what their users do). Don’t believe this will matter, look at South Korea where many of these laws have already been put in place because of, yes, a free trade agreement that is anything but free. Many service providers now ban most music and video uploads for fear of being sued for infringement. Some are being banning advertisements because the advertisement might infringe.

And none of this has anything to do with counterfeiting. Copyright infringement has nothing at all to do with counterfeiting (though the agreement does have some provisions against it, specifically border searches, yay). Counterfeiting, of course, has a much more negative public opinion than file-sharing, hence the bait-and-switch.

So written by lobbyists with little to no public input; the details hidden from the public for unknown national security reasons; major ramifications to U.S. law even though we’re told it won’t; and a trade agreement really all about protecting select industry’s obsolete business models. Sounds like our government at work.

For a more in-depth analysis of the ACTA, make sure to read Michael Geist’s ACTA Guide.

Chess master Garry Kasparov pens a review of Chess Metaphors: Artificial Intelligence and the Human Mind, revealing how computers have changed the game.

Kasparov made headlines in 1997 when he lost to a computer.  IBM’s Deep Blue was a revolution in artificial intelligence, evaluating 200 million chess moves per second. Kasparov considered this inevitable, recognizing now that the average home PC has chess programs able to beat most grandmasters.

The fear of computers rising as chess masters meant few would be interested in the game, but the opposite is happening. With chess a standard program on most new computers, people and especially children can be exposed to the game even in areas where the game is rarely played. Moreover, the computer is influencing the style of the next generation of grandmasters, particularly that of no style (but lots of substance). Kasparov writes:

It is entirely free of prejudice and doctrine and this has contributed to the development of players who are almost as free of dogma as the machines with which they train. Increasingly, a move isn’t good or bad because it looks that way or because it hasn’t been done that way before. It’s simply good if it works and bad if it doesn’t. Although we still require a strong measure of intuition and logic to play well, humans today are starting to play more like computers.

Grandmasters are getting younger and younger, likely thanks to the readily available computer partner.

In the pre-computer era, teenage grandmasters were rarities and almost always destined to play for the world championship. Bobby Fischer’s 1958 record of attaining the grandmaster title at fifteen was broken only in 1991. It has been broken twenty times since then, with the current record holder, Ukrainian Sergey Karjakin, having claimed the highest title at the nearly absurd age of twelve in 2002. Now twenty, Karjakin is among the world’s best, but like most of his modern wunderkind peers he’s no Fischer, who stood out head and shoulders above his peers—and soon enough above the rest of the chess world as well.

The growth of computer’s computational power is fascinating. As summarized by Kasparov, “Before 1994 and after 2004 these [computer versus human] duels held little interest. The computers quickly went from too weak to too strong.” A computer program is has broken down checkers to become unbeatable (either outright win or tie, but it will never lose) and it’s creator has now set his sights on poker. Chess’ complexity likely means an unbeatable computer is many years away, but that only makes the challenge more exciting.

Just to add another layer of analysis, several human/computer chess teams were pit against each other finding that a great chess player with a simple computer can best the best computer, but amateur chess players with an okay computer and an excellent process of analyzing that data can beat a great chess player with an even better computer. Computers, it seems, are yet to make the human mind obsolete, but rather can best supplement our reasoning skills to make us smarter or more efficient.

Newsday made the bold (and some, like me, might say, silly choice) to lock its online content up behind a $5 per week paywall. Cablevision, who purchased the newspaper for $650 million in 2008, offers its website to Optimum Cable subscribers and Newsday subscribers for free, but charges anyone else $5 per week, and three months in, the numbers are starting to leak out.

First, how many people have signed up for $175 per month Newsday website? 35. Yes, 35 people. So that extra $9,000 a year must really make up for the estimated 50 percent drop in web traffic. At least they don’t have to pay famous columnists who want people to actually be able to read and share their work.

Now I look at these numbers and see evidence that paywalls might not be a great idea to make money. Even assuming the vast majority of Long Island (which Newsday targets) have free access as Optimum Online users, erecting the paywall means more costs like paying for more customer service and accountants, while even print newspapers find going free both saves tons of money and increases circulation (because they don’t have to pay for as many customer service agents or accountants).

Less traffic, tiny amount of money after spending tons (even to buy the paper). Maybe they’ll eventually learn their lesson that paywalls don’t work and end it like the New York Times did. And then forget and bring it back years after.

The U.S. has been trailing much of Europe and Asia in both broadband penetration and speed for years, ceding this major technological and competitive edge. Rather than invest fully in a national broadband strategy like Japan and Australia (to name a few), the U.S. is actually dropping in overall numbers while the rest of the world rockets forward with faster speeds and lower prices.

The U.S. ranks 12th in broadband penetration (speeds above 5 Mbps) with 24 percent, an 8.8 percent drop compared to last year according to Akamai. Speeds were also down 2.4 percent, ranking the U.S. 35th in the world. This puts the U.S. farther behind South Korea, Japan, and the Czech Republic who continue to invest in connecting their population recognizing the competitive edge they will have in the years to come.

Even with our slow speeds (if you can even get them in your area), U.S. customers pay about $40 per month for our average of 3.9 Mbps, almost the same price France gets 20-30Mbps with HDTV and DVR included. Only a tiny fraction of the U.S. even gets those speeds and pays more than $100 for it.

The culprit here is a total lack of competition. ISPs and telecommunication companies lock down areas, often leaving even major cities with only one or two choices for their internet connection. Governments in Australia and Japan have taken charge of their broadband strategy, providing loans, grants, and true competition among internet providers to increase speeds and penetration. The U.S. could easily do the same thing, but would rather pay the same companies who refuse to grow and innovate to continue to not grow and innovate.  So we continue to watch prices increase as service drops.