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Major League Baseball has struck out in its attempt to get the U.S. Supreme Court to intercede in a fantasy baseball dispute.

The justices on Monday said they won't take up MLB's challenge, backed by the National Football League Players Association, of prior court rulings favoring a fantasy league company. The announcement came without comment in a standard list of case statuses published by the high court (PDF).

MLB's Internet media arm, later joined by the pro-baseball players' union, had claimed that C.B.C. Distribution and Marketing--a Missouri company that sells fantasy sports products via the Web, e-mail, regular mail, and phone--was using baseball players' names and statistics without a license, thereby violating the players' rights to publicity under state intellectual property laws. (A right to publicity, of course, is a person's right to control and profit from the commercial use of his name and likeness.)

The original lawsuit actually came from C.B.C. The company sued MLB after the pro baseball association began providing fantasy baseball games on its own Web site. MLB offered C.B.C. a license only to promote MLB's products, not to continue selling its own fantasy baseball games. Fearing a lawsuit from MLB if it continued business as usual, C.B.C. filed its own suit.

C.B.C. won at the district court level and again last year at the appeals court level, which held that the company's "first amendment rights in offering its fantasy baseball products supersede the players' rights of publicity."

After years of heated debate and lobbying, the Patent Reform Act of 2007, which passed in the U.S. House of Representatives and was scheduled for a Senate vote this session, has been taken off the Senate's calendar. It can be revived, but its momentum has effectively fizzled.

Apparently, the Senate has better things to do with its time.

At this point, I don't wish to rehash the issues of, or my viewpoint on, the Patent Reform Act. Besides, as I've said, both sides in the debate were after only their own self-interests. Such is life in a capitalist society. (I think that's a good thing.)

What does fascinate me, though, are the strange alliances the debate over patent reform created. The Coalition for Patent Fairness--a group of more than 150 high-tech and financial-services companies that included Adobe Systems, Apple, Cisco Systems, eBay, Google, Hewlett-Packard, Intel, Lenovo, Microsoft, News Corp., Oracle, SAP, Time Warner, and virtually all the big banks--supported and lobbied heavily for the bill.

Tudou, which had been scolded for insufficient censorship (namely, of porn) and faced either threats or rumors of a government shutdown as recently as last month, is looking a little healthier this week.

China Web 2.0 Review reports:

Tudou, the largest video-sharing Web site in China, finally officially announced its $57 million series D financing at a $150 million valuation, which is the largest round of funding ever for a Chinese Internet company. (This takes) Tudou's total fund-raising to $85 million over the past three years. (In previous rounds of funding), Tudou raised $500,000, $8.5 million, and $19 million respectively.

This is not likely a low-risk investment. Not only are Internet companies hard to predict, but the video sector in China is heavily regulated and subject to shutdown orders on a moment's notice from authorities.

There are real incentives for the government to keep these companies going, however: they grow the economy, they represent Chinese successes, and they circulate a lot of material that is in no way illicit. But I see one more bump in their future.

Tudou is still a bastion of copyright infringement. Entire TV series, just as before the recent crackdown, are available on the site. If authorities get serious about their intellectual-property efforts, or just want to make a public gesture in that direction, Tudou will need to be ready to quickly remove a vast amount of material from its site and institute controls more like, say, YouTube.

Auctioneer Charlie Ross fielding a bid. Note the totals on the board behind him. The bids can run high.

(Credit: Ocean Tomo)

SAN FRANCISCO--Jonathan Bari didn't seem too nervous until the $725,000 glitch.

A woman, taking commands from someone at the other end of her cell phone, had bid $750,000 on the patent portfolio he was selling at the Ocean Tomo IP Auction last week in San Francisco. The patents covered an online authentication system for consumers devised by his old company Catavault.

The panic came because auctioneer Charles Ross registered the bid at $725,000.

"She said $750,000," he said to me. (We were sitting next to each other.) He became absolutely still. His anxiety then began to climb--not because he was going to be shorted $25,000, but because the bidding accelerated.

A remote buyer placing bids through a representative of the auction house (the buyer was speaking to the rep on a phone) raised it to $800,000. The cell phone woman laughed, talked to her client on the phone, and after a pause bumped it to $810,000. The remote bidder bumped it to $815,000.

VIDEO: Click image to see scenes from the auction.

(Credit: CNET TV)

It continued on. When the bidding crossed $1 million, the 200 or so people in the room simultaneously went "Oooooohhh."

Not Bari. He started breathing audibly. "Go higher, higher," he whispered, to outer space.

The remote bidder kicked it to $1.1 million. The room paused. Cell phone lady quit. Bari shook my hand and left, happy that the winner bid far more than the $500,000 minimum he had set.

The devil's lair?
While Bari got one of the highest prices of the day, his experience reflected the overall tenor of the patent auction, in which intellectual property owners sell their goods to anonymous bidders. Internet patents--particularly the kind that could apply to vast numbers of transactions on the Net--drew a lot of attention.

Discovision Associates got $6 million for a large patent portfolio for improving bit streaming, a record for an intellectual patent portfolio at auction. Yoogli, which has a semantic search patent, received a $1.1 million bid, but withdrew the patents because it was below Yoogli's reserve.

For critics of software patents, this kind of event is the ultimate nightmare. They claim that Internet patents are dangerously broad and that auctions ultimately fuel lawsuits. It's like the Amazon one-click patent and an attack by wolves all rolled into one.

So far, Ocean Tomo says that only a few lawsuits have emerged around patents bought at its auctions. Still, some attendees represented "patent enforcement firms," which buy patents and then extract royalties from other companies. Intellectual Ventures, the large patent firm founded by former Microsoft chief scientist Nathan Myhrvold, was allegedly bidding by phone through one of the auction house reps, according to some attendees.

Or heaven's gate?
The patent holders, though, see it differently. Many are independent inventors who tried to license their products to large companies but got rebuffed. Without patents, large companies would steamroll over the little guy, many assert.

Realtor Martin Eldridge, for instance, got $1 million for a location-based application that combines GPS-like data with information services. If you walk by a painting rapidly in a museum, for example, you might just get the name of the painter sent to your cell phone. If you pause, it might forward you the date it was painted and other details.

He came up with the idea while driving down Highway 1 in California.

Taking bids by phone. Many bidders call in their bids by phone to maintain secrecy. Phone buyers, however, will also have observers in the room.

(Credit: Ocean Tomo)

"I wanted to know what I was driving by," he said, elated and sipping champagne. He wrote Google, Garmin, Microsoft (all of whom have extensive patent portfolios that the rigorously defend) and several other companies about licensing. None responded. The auction gave him a way to make some money off of it.

Michael Voticky sold a voice-mail management program he came up with while on a flight from Europe, for $500,000. It was his minimum. "No complaints," he told me.

The list goes on: Videa got $700,000 for a patent for displaying video files as thumbnails. Another company got $975,000 and hearty applause from the audience for an application that ranked media files according to a user's personal profile. QSIndustries got $400,000 for a digital sound-effects app. A newsfeed aggregator patent went for $400,000.

Below that, a slew of patents that related to consumers sold in the $100,000 to $250,000 range. Under the unstated rule of auctions, the crowed applauded and ooohed only if the bidding went past the $900K mark.

Compare that with what happened with the patents for industrial users. Sun Microsystems offered a number of patent portfolios. The first three were withdrawn because bidders didn't hit the minimum or bid at all. Sun finally sold one for $325,000.

Other companies didn't see bids, or high enough bids to get past their minimums, on patents for improving cell phone antennas, engine management systems, conductive coatings for planes that make them easier to de-ice, or an application for tracking trucks in delivery fleets. Edward Hyman got $130,000 for a chip that can help control satellites, a little above his minimum expectation.

In all, Ocean Tomo CEO Jim Malackowski deemed the day a success. The patents sold generated $19.6 million in revenue. That's a record for an intellectual-property auction.

Four lots sold for more than $1 million and around 62 percent of the lots were sold overall. Ocean Tomo keeps 25 percent as a commission--10 percent from buyers and 15 percent from sellers.

Not bad for a day's work.

Gibson is none too happy about Activision's 'Guitar Hero' pictured here.

(Credit: Activision)

This post was updated at 4:12 AM on Monday to reflect the fact that Gibson has added MTV, Harmonix, and EA to the list of plaintiffs.

Legendary guitar manufacturer Gibson Guitar has sued six major retailers--Wal-Mart, K-Mart, Target, Amazon.com, Gamestop, and Toys-R-Us--for selling Activision's Guitar Hero video game series, MarketWatch reported Friday.

The decision was made "reluctantly," according to a statement from Gibson.

Earlier this month, Gibson sued Activision over Guitar Hero, claiming that the game violated a 1999 patent for a virtual-reality guitar-playing device that "simulate(s) participation in a concert by playing a musical instrument and wearing a head-mounted 3-D display that includes stereo speakers." A copy of the patent included in Gibson's original lawsuit is indeed dated November 23, 1999.

Activision filed for declaratory relief on March 11, claiming that Gibson's lawsuit came about after the video game publisher nixed a marketing deal with the guitar manufacturer. "Gibson waited three years to make its patent allegations, and only did so after it became clear that Activision was not interested in renewing its marketing and support agreement with Gibson," the Activision filing stated. "Activision continues to believe that Gibson's claims are disingenuous and lack any justification."

But in Gibson's latest move, filed Monday, the Nashville, Tenn.-based company has chosen to target retailers as well--a tactic that Activision quickly criticized.

"Our Guitar Hero retailing partners have done nothing wrong," Activision said in a statement. "We will confront this and any other efforts by Gibson to wrongfully interfere with Activision's relationship with its customers and its consumers."

On Friday, Gibson made it clear that it's after any guitar-playing game, as it added MTV, Harmonix, and Electronic Arts to the list of plaintiffs. MTV, which acquired Guitar Hero developer Harmonix in 2006, uses EA as the distributor for its Rock Band game. Rock Band, a Guitar Hero competitor that was released last November, allows players to team up on vocals, bass, and drums in addition to guitar.

The proposed Patent Reform Act of 2007 will be coming up for a vote in the Senate in a few months. A similar version of the bill has already passed in the House.

The bill has certain relatively benign provisions, but let's ignore them since they just cloud the argument and are of little interest to either side in the debate.

United States Senate

Let's instead just cut to the chase. In lay terms, the bill makes it easier to challenge issued patents and harder for patent holders to obtain compensation through the U.S. legal system.

Regardless of how that sounds to you, make no mistake - this debate is between two opposing sides with their own interests at heart. ... Read the full post at CNET's CES 2010 blog

Editor's note: This blog was updated at 6:58 a.m. PST Tuesday to add a link to the report.

WASHINGTON--The Bush administration witnessed a "record" uptick in intellectual property-related investigations and prosecutions last year, according to a new government report released Monday.

(Credit: U.S. government)

During the 2007 fiscal year, the U.S. Department of Justice filed 217 of those cases--up 7 percent from the 204 cases lodged in 2006 and 33 percent from the 169 such cases in 2005--according to the report (PDF) produced by the National Intellectual Property Law Enforcement Coordination Council. The NIPLECC, as it's known in Washington, consists of the Justice, State, Commerce, and Homeland Security departments and the Office of the U.S. Trade Representative.

Of course, merely filing a case doesn't necessarily mean that the alleged culprit was ultimately found guilty. But the report also found that the number of defendants sentenced for intellectual property-related crimes grew to 287, up from 213 in 2006 and 149 in 2005.

To be sure, intellectual property-related enforcement actions represent just a tiny sliver of the Justice Department's overall work. To put those numbers into perspective, the Justice Department filed 719 drug-related cases and 572 "re-entry of deported aliens" cases in federal district courts during August 2007 alone, according to the latest government data compiled by the Syracuse University Transactional Records Access Clearinghouse.

There's still much more work to be done on the antipiracy front, Deputy Assistant Attorney General Sigal Mandelker said during a Monday afternoon briefing on Capitol Hill.

She said the Bush administration is still hoping that Congress will enact a set of sweeping intellectual-property law changes recommended last year. It would like politicians to criminalize "attempting" to infringe copyrights, permit wiretaps for piracy investigations, and increase penalties for intellectual-property violations, among other things.

A controversial copyright bill pending in the U.S. House of Representatives Judiciary Committee would do some, but not all, of those things.

"We're always evaluating our cases and what additional tools we need to enhance our ability to bring more cases, bigger cases, and to send the message to these criminals that if they perpetrate these crimes, they're going to face particularly stiff penalties," Mandelker said.

The annual report also lists the following among the accomplishments of the Bush administration's antipiracy apparatus:

• Posting seven new "IP attaches" around the world--in Bangkok; Sao Paolo, Brazil; Cairo, Egypt; Moscow; New Delhi; and China. Stationed in areas known for having intellectual-property enforcement "issues," they're designed to be ambassadors of sorts, helping work out agreements with foreign governments to beef up crackdowns on counterfeit and pirated goods.
• Launching educational campaigns to promote the importance of intellectual-property protection for small- and midsize businesses and at international trade fairs.
• Using international trade agreements to pressure other countries, most notably China and Russia, not to look the other way when piracy occurs.

Have you ever, I mean ever, copied software, a CD, a DVD, or a video tape without permission or paying? How about downloading music, video, pictures, or art?

If you answered yes, congratulations, you're just like everybody else.

On the other hand, you probably also think U.S. screenwriters are being screwed by the studios. And that China and other countries shouldn't be illegally copying and selling material copyrighted in the U.S.

That, my friend, is called a double standard.

Something else to consider:

Did you read this post about Trend Micro suing Barracuda Networks for patent infringement. Do you agree with the blogger? Do you think companies like Qualcomm, Rambus, or Trend Micro are patent trolls that unjustly enrich their shareholders at the expense of consumers? ... Read the full post at CNET's CES 2010 blog

I was working on this when I read this CNET News.com post. Apparently, Bill Gates believes that a strong technology sector will help keep America's economy healthy. I couldn't agree more. But I have a somewhat different take on the role tech has played in the U.S. economy.

Over the past few decades, the U.S. technology industry has had a number of "the sky is falling" moments, and every time we've managed to work through it and come out stronger than before.

For example, when I entered the job market in 1980, my employer--Texas Instruments--was the world's leading semiconductor maker. But in 1986, NEC and Fujitsu took the top two spots. By 1998, Japanese companies held the top 3 and 6 of the top 9 positions and TI had slipped to No. 5. Intel was the only bright spot, climbing the charts from 10th to 7th place.

Fast forward to 2006, when U.S. companies occupied 4 of the top 10 positions, including No. 1 (Intel) and No. 3 (TI). Rounding out the top 10 were two companies each from Japan, Korea, and Europe. That's certainly more balanced. What changed?

(Credit: Microsoft)

Well, U.S. technology companies and their employees seem to have a knack for innovating. But we don't just invent technology; we also create and dominate markets. We don't just rise to the occasion when our economy is threatened; technology innovation and marketing seem to be innate strengths of our culture.

For example, Intel, Microsoft, and IBM together created the personal computer. Contributions from Apple, Compaq, Dell, Hewlett-Packard, and others helped to make personal computing the most important product category in tech history.

Nokia may be the dominant cell phone company, but U.S. companies like TI dominate the chips inside, and Qualcomm invented CDMA--the competitor of Europe's GSM standard.

U.S. companies invented and dominate networking and the Internet. American companies invented the Palm Pilot, Tivo, and of course the iPod and iPhone. Except for Vizio, we don't make TVs, but TI invented DLP technology--the core of a new generation of HDTVs and video projectors.

It's surprising that we occasionally manage to out-innovate and out-market Asian and European consumer electronics giants like Sony, Samsung, Panasonic, and Philips.

First manufacturing moved offshore, followed by outsourcing of data and call-centers and even software and hardware development. But our unemployment rate has averaged just below 5 percent for the past 10 years, and it's not expected to change anytime soon.

When we're confronted with a challenge, we retool, innovate, create, and market. As an industry and with the occasional help of the government we also protect our intellectual property rights--one of the biggest challenges we've faced, and continue to face, since the early '80s.

At the end of the day, it's imperative that we continue to develop, nurture, and protect our human capital, our intellectual capital, and our venture capital. And not just in traditional electronics, but in biotech, nanotech, green tech, and energy tech.

Just as they say in the stock market, past performance is not a guarantee of future results. Technology is a treadmill that never stops or even slows; we can't either.

Note: a prior version listed Blackberry as an American invention. Research In Motion is a Canadian company. Thanks to Neal and sorry to all you Canadians out there.