I watched the Arrington/Reback interview last week.  It was quite interesting.  Reback claims (and I agree) that competition is what ensures a fair marketplace.  Without competition, consumers ultimately get burned.

I was thinking about how this applies to lawyers in America.  Does competition keep the legal industry in check?

Consider what would happen if tomorrow, the population of Accountants in the United States doubled.  Suddenly there would be too many accountants.  The price for accounting work would drop instantly due to over supply.

Now consider what would happen if tomorrow, the population of lawyers doubled.  Unfortunately, there would be no such drop.  A lawyer’s job is to make an argument (lawsuit).  And we’ve created a government which has infinite capacity for new lawsuits.   If there were twice as many lawyers filing claims, our government is *required by law* to expand to meet the needs of all those lawyers.  Is this right?

According to this study, we can see the number of lawyers in America has sharply increased between 1970 and 2000.  Was this growth due to increased demand for lawyers?  Or do we have a supply/demand chain in the legal profession which is out of whack?  Could it be that the same claims which Reback makes about businesses needing competitive pressure to remain balanced applies to lawyers?  And if so, when we’ve got a government willing to accept any lawsuit, from any lawyer at unbounded capacity, how do we enforce competition in the legal industry?

The problem boils down to “frivolous”.  Currently it is virtually impossible to get a case thrown out as frivolous.  “Frivolous” is a specific legal term which has to do with making an grossly wasteful case.  Generally, lawyers can make most any claim and sue anyone without being frivolous.  This process can potentially cost the defendant hundreds of thousands of dollars to defend; and because it is so costly, defendants usually find it easier to settle, even for moderatly large amounts of $25,000 to $100,000.  Even if the defendant is ultimately right and wins in court, the plaintiff owes the defendant nothing for all that wasted time.  Further, the taxpayers were left with the bill for all the court costs.  Why is this so?  When bringing forth a lawsuit where you ultimately lose, why doesn’t the loser pay court costs and defendant costs?  What other checks-and-balances can we put in place to provide the equivalent of “competition” in a legal system which inherently has no bounds on growth?

Unfortunately, our legal system is the pinnacle of the conflict of interest.  Lawyers are one of the highest paid professions in the United States.  Laws which regulate lawsuits will bring down lawyer wages.  How can we expect politicians (largely lawyers themselves), judges, and lawyers to accept legislation which limits their livelihood?  We cannot.

The press is abuzz today with news that Microsoft is suing TomTom over patent violations involving linux.

Sadly – the recession is probably going to bring more of this desperation. 

Microsoft and Yahoo aren’t making money on this acquisition, nor are the bankers, nor are the people that I advised to buy YHOO stock.  But, I’ll bet there is a lawyer in town that will!

Hurricane Katrina struck the US in August 2005.  That’s 2.5 years ago.  Today, FEMA is finally kicking people out of 35,000 trailers from that event.  Occupants of those trailers are mad at FEMA.  They’ve been living in the trailers for 2.5 years while simultaneously claiming that they want to sue as a result of their health problems from living in the trailers.   If they know of the health problems, they should, uh, maybe leave?

This raises several questions.

First, why are these people getting free housing for 2.5 years?  Free housing is not a federal responsibility.  2-3 months should have been the limit for people to find new housing.

Second, why should we provide housing even for temporary relief?  If you provide victims with nothing, they can’t sue.  If you provide them with trailers that they claim are unhealthy, they can sue you for being negligent.  These people are whiners and users.  No matter what you give them, it’s never enough.  Fine, give no federal aid anymore for this type of tragedy.  It’s better than dealing with the ungrateful.

Of course, the lawyers are to blame; the American Bar Association even set up a whole website to help the “victims” sue somebody.  Not sure who to blame?  Ask the ABA!

If the victims had any money, I’m sure a smart lawyer would help me sue the victims.  After all, why did I have to spend billions of tax money just because these people were too dumb to move out of a flood plain which nature clearly wants to cover with water?  Don’t spend money on the levy; this will happen again.

Patents always start out well-intentioned.  Companies tell their employees, “We just need a few good patents for defensive purposes.  If someone sues us, we need leverage.”  Sadly, there is truth to this.

But patents last for seventeen years and the average start-up does not.  So, once the company gets into financial trouble, those innocent ‘defensive’ patents can turn into funding to keep the company afloat for a short while longer, or worse, fall into a lawyer’s hands after the fire sale.  A classic example of this is Visto, a once exciting Silicon Valley startup that never managed to quite make it ‘over the hump’.  In 2005, the company sold equity to NTP (the lawyer group that sued RIM) and agreed to allow NTP access to Visto’s “defensive” patent portfolio aggressively.  Visto/NTP have been filing lawsuits ever since.

If patents are indeed meant to be defensive when they are created, and all employers claim that they are, then we should create a contract which codifies this. 

What if we could draft a contract, between the inventor(s) and the employer.  The contract would give the company rights to the patent so long as the patent is only used for “defensive” purposes only.  The patent would not be transferable to other companies.  We could distribute this contract freely on the net, and encourage inventors to get their employers to sign them.    Over time, hopefully the world would have a lot of “defensive” patents, but not aggressive ones.  Of course, the legal definition of “defensive” is pretty tricky.  Perhaps a non-transferable patent is the only feasible contract.  I don’t know; I’m not a legal expert.

If you are a corporate attorney, and think this is a good idea, drop me a note.

Peer To Patent looks interesting (read the overview) – it facilitates getting public review of software patents. 

Peer To Patent is a cool concept. Definitely positive.  I wonder if there is enough incentive to reviewers to actually get substantial review?  What if a few gracious companies offered cash to anyone that debunks a potential patent?

I’m not a fan of OJ Simpson’s by any definition.  But, I do feel that our legal system put him into double jeopardy.  That is, he was acquitted of murder, and yet later retried for the same crime.  How is it that he was found not guilty for having murdered two people, and yet fined $33M for their wrongful death?   How does this happen?

It turns out that wrongful death is much easier to prove than murder.  “Wrongful death” only requires a “preponderance of evidence”.   Although a “shadow of a doubt” may exist, you can conclude guilty anyway.  Further, a wrongful death jury need to only have 75% of the jurors agree (9 of 12).  Lastly, you can’t “plea the 5th” in a civil case.  You have to respond on the stand.  I don’t understand why we have the 5th amendment for criminal cases and not for civil ones.  Either it’s unfair to make someone testify in ways that might hurt them or it’s not.  We can’t have it both ways.

Unfortunately, wrongful death lawsuits have nothing to do with justice and everything to do with money.  This entire branch of our legal system has been carefully carved and sculpted by lawyers for the benefit of lawyers.  Justice would have the murderer behind bars, and the public safe.  But we don’t have that.  Does Fred Goldman and his lawyers getting rich give us justice?

What boggles my mind most is why more people don’t stand up for OJ against our completely broken legal system.  He was legally acquitted.  Even if we think he is guilty, we need to let him go – that issue was concluded long ago.  If you think our system is broken for not finding him guilty, then fight for that.  But if you aren’t fighting for that, because you think our system usually works, and you think that “beyond a shadow of a doubt” is a good idea, then you absolutely must support OJ now.  This is double jeopardy, plain and simple, because everyone hates him.

I want our legal system to be about truth and justice, rather than money and appeasing public sentiment.  By allowing both a criminal and civil trial on the same issue, conducted under different rules, we are accepting hypocrisy in our system.  Stop thinking, “Oh good – OJ is getting what he deserves”, and instead think about what it means to be ”innocent until proven guilty”.  OJ was not proven guilty.  Yet we treat him as though he is guilty anyway.  This pisses me off far more than whether he got away with murder or not.

After writing this, I found a few other smart people saying the same thing: Joelle Blackstarr, Miranda Tempest, etc

Periodically, friends or colleagues ask me for advice about this-or-that startup company.  I love talking about that sort of thing, and I’m very happy to help, so these are great discussions.  But often, they then ask me to sign an NDA (Non Disclosure Agreement).  Yuck.  I’m never going to sign one again.

You see, when a friend asks you to sign one, to refuse is awkward.  If you tell them you don’t sign them as a matter of policy, they’ll wonder, “is it just me?  maybe he doesn’t want to help me.”  But that isn’t it.  So, I’m left either having to decide to create this confrontation, or more likely, cave in, sign the damn thing and move on.

But NDAs are a pain in the neck, and about as useful as dirt.  Why would I want a legally binding document that someone can later use against me?  If you are asking me for advice, why should I sign *your* document?  If you don’t trust me, fine, don’t ask.  But I’m a man of my word, and that’s what you’ll have to trust.  If you don’t think you can trust me, perhaps I’m not the right person to talk to anyway? 

So, this blog posting is purely a selfish one.  I post it so that in the future I can refer people to it and say, “I don’t sign NDAs, and it’s just a policy I have”.  There is nothing personal to it, and they can read it on my blog dated Aug 17, 2007.  If that is a showstopper, that’s not my problem.

One last note to potential askers of NDA signatures.  NDAs are legal documents.  When you ask someone to sign one, you are asking them to do a big favor.   Each one is different.  There are mutual NDAs.  There are one-way NDAs.  The differences are annoyingly subtle.   When someone doesn’t trust me enough to work without an NDA, I don’t trust them enough to believe their NDA won’t bite me.  So, I have to do a legal review with my lawyer.  Please respect my decision to not use NDAs unless absolutely necessary.  And, while you are at it, fire your lawyer – he is the real problem.

Despite my frequent criticism of technology patents (and here, or here), I am also officially part of the problem.  Last week, I was issued a new patent -number 7243163.

This patent was filed March 29, 2002, while I still worked at Good Technology.  Since that time, Good was acquired by Motorola.  I assume that Motorola now owns the patent; but I don’t really know.  All I know is that while it could be used to do evil work for others, it will no longer do anything to benefit me.  It might have increased the purchase price that Motorola paid for Good, so perhaps everyone at Good owes me a nickel. 

Aside: Here is an idea for a website – sort of like the USPTO website of patents, but instead keep track of who-sued-who and who-was-awarded-what for patent infringement cases.  It would be neat to go back and find out who won from this patent just by looking up the number.

Anyway, there is one thing that makes me proud of this patent.  I am the co-author of that patent with John Friend, Roger Collins, and Mike Bennett.  These guys were all fantastic engineers, and I’m thrilled to have worked with them.  If you want to know more about what a “data processing apparatus” is, you’ll have to ask them, because I haven’t a clue.

Usually I’m pretty “anti-law”.  That is, more laws are not good – especially around software.  However, with more and more scams coming online, there ought to be a law which is quite simple.  If you allow someone to signup for a recurring-billing product online, you must also provide a simple way for that user to cancel the service online.  Like most of us, I accidentally got sucked into one; and now I can’t get out.  I knew I was treading on thin ice when I signed up, and now I am really regretting it.