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That's a tough one. If you're investing in the research of 100 different ideas and only 1 becomes marketable, part of me says that you should only make money on the 1 idea -- like investing in 100 different stocks and having only 1 turn a profit, bad investment decisions lead to financial loss. Although another part of me says that this attitude can discourage investment in research that does not have obvious potential to become marketable.

All-in-all I think you're right, it is a balancing act between stifling innovation by compensating research investments either not enough or too much.

The current patent system leans (heavily, in my opinion) toward overcompensating. For example, pharmaceutical companies make much, much more money off of the few drugs that they patent than the amount of money that they allocate to all R&D (not just R&D for the patented drug). In 1999, Eli Lilly made $10B. Only 17.8% went to R&D -- 27% went toward profits.

Tying patents only to research costs leans the other direction as shown in your example. Perhaps other incentives would need to be added that would allow investors to recover money spent on research that did not lead to something marketable. Although I don't know where the money to pay those incentives would come from or how to limit the financial abuse of such a system.

"Something has to be done,'' said Ira Longini, an Emory University professor whose computer model of a potential avian flu pandemic shows that an outbreak could be snuffed out within a month by rushing antiviral drugs to the place where it started. "When you think of the potential damage a pandemic flu could do, and how little drug we have, the situation is quite absurd.

Roche, the pharmaceutical giant, recently announced a European price of $20,424 for a year's supply of its anti-HIV drug Fuzeon. This will translate into an AWP (Average Wholesale Price) in the U.S. of close to $25,000. "Roche has priced Fuzeon at almost three times the price of the most expensive AIDS drug," said ACT UP/NY member Mark Milano. "This excessive price will force ADAP programs to cut other cut other life-saving drugs, restrict entry to their programs, or increase already long waiting lists. This will hasten the death of thousands of people with HIV in the U.S."

Cat. Mouse. Cat. Mouse.

So now we just counter this illegal wiretapping (yes, its still illegal, even though they've passed a law that makes it "legal") with extra strong encryption and Civil Disobedience.

Use TrueCrypt with the AES-Twofish-Serpent algorithm on your PC (Linux, Mac or Windows). If you want to use something simliar on BSD, look into GELI encryption for those partitions.

For phones, you could look into encryption handsets or telephone scramblers. There's this one too, or the Cryptophone GSM Phone Encryption solution. Google around, there's quite a few hundred solutions in this space... stack them together for even more security.

Disclaimer: I don't personally know how strong these algorithms are on these handsets, so use at your own risk.

With VoIP, you could easily layer whatever encryption you want on top of it. Bounce your call through a few foreign routers, run it through Privoxy, Tor and i2p and you should be good to go. Yes, it will incur some latency.. but I'd rather sacrifice speed for security or privacy, wouldn't you? Here is an article on securing VoIP. Worthwhile reading if you're using it or considering it.

Cat. Mouse. Cat. Mouse.

Now its OUR turn.

You take from us, we take back.

They will always sell drugs, the question is do they invest lots of money on development if the path to a return is hindered substantially?

This might be true if it hadn't already been shown that drug companies spend more money on advertising than research, in some cases nearly three times more.

LK

They will always sell drugs, the question is do they invest lots of money on development if the path to a return is hindered substantially?

This might be true if it hadn't already been shown that drug companies spend more money on advertising than research, in some cases nearly three times more.

LK

Actually, now that you mention it, Pat Robertson and Jerry Falwell come to mind. Sadly, many consider them religious leaders.

Biggest load of PR garbage ever. Most money drug companies spend is on marketing the designer drugs. Not on research and certainly not because of lower profit. What the hell does lower profit even mean? If you are making profit no matter how much it is you are making back more than your costs so you are making money. There is no need to subsidize something that is profitable!
Take a look at the chart Chart about halfway down.

Well, according to Y2K financials compiled in:
Off the Charts: Pay, Profits and Spending by Drug Companies [Act Up]
net income for the industry ran an average of ~20%, which is a great profit margin for any manufactured product.

Marketing, advertising, administration costs ran between 15% to 39% of expenses.

Research and development ran an average of ~15%.

Chart which illustrates this. [Act Up]

The profit breakdown has been extensively reported elsewhere, as this is derived from SEC filings, and the margins continue to this day, this is just the first source I goggled. NOVA on PBS had a great documentary on this issue last month which had similar stats.

The pharma industry enjoys record profits, pays its corporate officers extravagantly well, and charges the American public more for the same products than any other market in the world.

At the same time, we allow the pharma companies to deduct the expenses of R&D costs, clinical trials, marketing, et al, and give them patent protection so that they enjoy a protected revenue stream for many many years.

This industry then takes its profits and buys congress, ensuring that the government does not use its buying power (MediCare) to negotiate better pricing, and pass legislation which keeps americans, states and health providers from purchasing the very same drugs from Canada (Bush's recent drug bill).

Drug bill a well-financed victory for industry [USA Today]

For many, they have no choice: buy drugs or die. I do not believe the patent system was intended as a means to extort money from vulnerable citizens. In my opinion it's high time that our government bullies the pharma industry to arrange its affairs, so that pharmaceuticals are again priced fairly.

They can start by restricting advertising for pharma products just like they have done for cigarettes and alcohol. That should shave 20% right there.

For all the apologists out there who will claim "it's capitalism; they have no responsibility except to their shareholders", let me remind you that the government grants corporate charters and allows businesses to exist to benefit the public good, not just to extort money from the sick and vulnerable.

Well, according to Y2K financials compiled in:
Off the Charts: Pay, Profits and Spending by Drug Companies [Act Up]
net income for the industry ran an average of ~20%, which is a great profit margin for any manufactured product.

Marketing, advertising, administration costs ran between 15% to 39% of expenses.

Research and development ran an average of ~15%.

Chart which illustrates this. [Act Up]

The profit breakdown has been extensively reported elsewhere, as this is derived from SEC filings, and the margins continue to this day, this is just the first source I goggled. NOVA on PBS had a great documentary on this issue last month which had similar stats.

The pharma industry enjoys record profits, pays its corporate officers extravagantly well, and charges the American public more for the same products than any other market in the world.

At the same time, we allow the pharma companies to deduct the expenses of R&D costs, clinical trials, marketing, et al, and give them patent protection so that they enjoy a protected revenue stream for many many years.

This industry then takes its profits and buys congress, ensuring that the government does not use its buying power (MediCare) to negotiate better pricing, and pass legislation which keeps americans, states and health providers from purchasing the very same drugs from Canada (Bush's recent drug bill).

Drug bill a well-financed victory for industry [USA Today]

For many, they have no choice: buy drugs or die. I do not believe the patent system was intended as a means to extort money from vulnerable citizens. In my opinion it's high time that our government bullies the pharma industry to arrange its affairs, so that pharmaceuticals are again priced fairly.

They can start by restricting advertising for pharma products just like they have done for cigarettes and alcohol. That should shave 20% right there.

For all the apologists out there who will claim "it's capitalism; they have no responsibility except to their shareholders", let me remind you that the government grants corporate charters and allows businesses to exist to benefit the public good, not just to extort money from the sick and vulnerable.

Currently, Web content providers and have no mojo to abuse in the first place, which is no better for us all in the long run than the appearance and domination of the next RIAA-like organization. Either way, we, the consumers of content, risk losing out on some good stuff.

I disagree. It is better without, because said "RIAA-like organization" can't lobby Congress to limit/remove our freedoms in order to fatten their bottom line. That is, the point of business, after all. And if you don't believe me, you can believe this.

Honestly, I don't think a micropayment solution will arise until the Government insitutes some sort of official e-cash solution. Given that the general public is a horde of moronic technophobes, and the country is currently being run by one, I seriously doubt such a solution being implemented in my lifetime.

So, until then, web publishers can run their sites as ad-supported (or referral supported), or find a line of work that will actually pay them actual money, and stop bitching. Nobody's forcing them to run a website.

Please do not equate civil disobedience and P2P. Civil disobedience is essentially something you do in the open with the intention of getting caught and possibly prosecuted.

If you want to learn about what civil disobedience really is, check this or this out.

If you think that the Internet is the most active battlefield today, you need to visit a few places.

You're right, of course. Traditional civil disobedience would be the way to go in an ordinarily democratic society, in which the will of the people prevails.

Here. Read this.

Their concept of civil disobedience is a little different than Thoreau's in that they don't seem to favor individual acts. They are talking about public mass demonstrations. But what demonstrations are we talking about here? A million man march on Redmond? I am not sure that would do a thing.

File this one under "Monkey Wrench"... You can debate the morality and ethical implications at your leisure, but stop calling it civil disobedience, and start calling it what it really is(dig the Star Trek reference). It might make it harder to justify, and easier to vilify, n'est ce pas?

Wouldn't we be better off spending that money to prevent all the disease, famine and war on our own planet before we go about fucking up all the other planets? How many starving children could be fed with the money it takes to launch one spacecraft? NASA is a parasite on our society and needs to be put on hold until we can sort out our real problems.

The solution to starving children isn't to feed them, thats a short term solution and is almost a ponzi scheme since those starving children will in turn have more starving children etc. The real solution is to make sure that people who can't afford to feed their children don't have any more (while feeding the children there). Birth control is more cost effective and also more humane than allowing people to breed children, through their own ignorance, who will die of starvation.

All the money in the world won't prevent war. The current conflicts are based on differences in ethnicity, religion or political leanings. How many trillions of dollars were wasted by the U.S. and the U.S.S.R. over their 'cold' war? Money just enables more destructive wars.

Space exploration, which NASA enables the U.S. to compete in, is one of the few nationalistic goals that provides worldwide benefits. NASA doesn't just lob robots at rocks, it also launches satelites that explore space, and more mundanely but perhaps more important to us, track climatic conditions. It's made technologies like the phone both widely available and inexpensive. NASA builds enabling technologies.

Serious about your frustration with the RIAA and corporatism in general? Try Civil Disobedience. No, really. Be willing to get arrested for possessing the tools we take for granted. I am. But read on...

First, a summary, since this is long and will get chopped:

• We can't win if we look like the bad guys. Therefore, we must clean up our act, both public and private, and be willing to address the real, underlying concerns of our fellow artists and consumers.
• Corporations don't trust individuals; individuals don't trust corporations. Therefore, we must gather all of the individuals together on our side, artists and consumers alike, instead of allowing the corporations to divide us.
• The future is change; everyone is scared. The industry is afraid, but also opportunistic. It believes it can secure a future for itself built by legally forcing nature to behave itself. It attacks the fears of consumers to create this legal impetus.
• The "Tragedy of the Commons" is worrisome. Individual artists are afraid that if they open themselves up to a meritocracy, they'll be raped. We have counterexamples, and we also need to set expectations.

Before you don your DeCSS Shirt, it's important that we get our act together and learn the very powerful art of spin . Don't sneer and say that's beneath us. Right now, the RIAA and MPAA are mobilizing a very powerful political engine. They are engaging in a classic tactic, painting our community's members as pirates and criminals in the public's eye. It's our job to spin right back at them, to recast the debate in terms that make us clearly the good guys, and them clearly the corporate Goliath, out to trample the rights of individual artists and consumers. Here's how...

Start giving props to artists. Start decrying the fact that there's no widely available, secure, trustable infrastructure for "tipping". Start pitting the labels against the individual artists, whom you would compensate directly, if there were a reliable means to do so. Blame the corporate hegemony for this situation. Traditional corporations exist for one reason alone: profit ; profit to the exclusion of all else, including the rights of artists, and the rights of individual consumers. Start pitting the labels against consumers, by using inflammatory phrases like "abrogation of our rights" and "corporate hegemony" (please understand what they mean and be able to defend them calmly, though). As soon as we can swing the focus of our fellow consumers' mistrust and cynicism to the industry, as soon as we can paint ourselves the David in this battle, we will begin changing things.

The reasons for this are simple:

• People root for the underdog. Right now, the RIAA and MPAA are painting themselves and the artists as the underdog against the massive, unstoppable tide of digital piracy and mayhem. As it happens, they may be right, but I'll get to that in a minute.
• People fear for their own property. People want to be "secure in their persons, houses, papers, and effects". The RIAA and MPAA are casting this debate squarely in terms of theft of property because they know that will strike a chord with the public. They want you, the consumer, to believe that, if you don't side with them to stop Napster and DeCSS, you'll lose out just as much as if someone broke into your house and stole all of your CDs.

My freshman year in college, someone stole 250 CDs from my dorm room. 250 CDs that I had worked very hard to afford, and had worked very hard to acquire (many rare imports, anime, etc.). I felt hurt, violated, confused, angry, and all of that. The RIAA and MPAA are trying to connect with those feelings in the consumer public.

We need to be going for the same connection, while also making the connection between individual freedom and liberty. We need to make it clear that we're all for just compensation, and that we don't need Goliath's hand to ensure that compensation. We need to show our fellow consumers that the industry is just in the game for the sake of revenue, and that they don't give a damn about consumer rights, nor do they trust consumers in the least. Yet they ask for our trust that they will justly compensate artists, that they will respect our rights to fair use, that they will treat us as equals (IANAL, but a corporation is legally considered a person.)

The RIAA and MPAA would have you believe that every artist and "legitimate consumer" out there is on their side, and that everyone else is a pirate. We know that's wrong, but what do we do about it?

Get all the individuals on the same side. Artists are individuals. Consumers are individuals. Everything in between the two is corporate infrastructure. The internet makes that corporatism irrelevant to the kind of relationships we could be building with our fellow individuals.

If I play your song, and I like it, I'll give you a tip. If I play it all the damned time, I'll give you big tips, frequently. If Metallica pulled their heads out, they'd understand that they'd make a lot more from me letting me tip them than they are right now, since I won't buy anything new of theirs (even though I really want to).

Things we've taken for granted, as a society, as individuals, and as corporations, are all in the process of changing dramatically and radically. Specifically, traditional notions of property become more meaningless with each passing day. We know how to treat tangible items as property (you're stealing it if you deprive me of it without my consent), but we don't know how to treat intangibles as property; after all, if you copy it from me, how are you depriving me of it?

And if you think that distinction is cut-and-dried, and that it just means we need two classes of property, intellectual and tangible, think again. What's going to happen in a decade or three when nano-technology makes tangible property available to anyone with a handful of garbage, a replicator, and a design?

Now, it's understandable that corporations might be afraid. After all, they might disappear. Or have to reinvent themselves radically. I think they're pretty well aware of that fact. The issue, ultimately, is one of control. The industry wants to control its destiny, but it doesn't have that kind of power. It seeks to create that power, artificially, by lobbying to create laws like the DMCA, that curtail individual rights that are far more powerful than they were when they were granted, 225 years ago, before there was an Internet.

I don't know about you, but I don't want to be controlled by a corporation. I want the freedom to interact with my fellow individuals, to share and communicate and transact by our own rules. I want to write code and trust that you'll compensate me for it justly. And I do. Literally. I have a 100% GPL clause for the work I do. And I trust the community and individuals to be faithful to one another, and to support one another. I don't need a law or a corporation to enforce what ought to be human decency.

The idea that some people will steal all the goodies is worrisome. They can't. Unlike the commons about which "The Tragedy of the Commons" was written, you can't trample up the grass around an artist. You can't turn a director into mud by copiously copying her work.

You can refrain from contributing to their livelihood. You can enjoy their work and simply not tip them, even though you can afford to tip them. Fine. We already have a really good term for that in place: cheap asshole. Perhaps we could get it made into a legal term?

Anyway, there are natural responses to the problem of the cheap asshole. The first is the pillory, metaphorically speaking. A good tipping infrastructure will allow you to leave your tips either anonymously or with credit. An advogato-like trust metric will allow folks to rate your generosity in comparison to your means. A well-deployed micro-accounting infrastructure will make artists, producers, technicians, and so forth, accountable for how they spend the tips in pursuit of their art. All of that means that assholes will be highlighted in red, and the object of public scorn.

This is as it should be, and there is a long tradition of such treatment. Read A Christmas Carol if you doubt me. Everyone hated Scrooge because he was... well, you know. A c.a.

The second is based on what I call "laws of information physics". The two fundamental laws of information physics are:

1. Bandwidth between any two points at any given time is a finite resource.
2. Information flows freely as long as there is available bandwidth.

These laws can be exploited to prevent the c.a.'s from propagating:

• First of all, imagine if you had to pay for bandwidth by your usage. Hey, if we're not relying on king corporation any more, someone's got to foot the bill for your 128Kbps chunk of the OC48 to gratefuldead.com. Thus, when you download directly from them, there's a mandatory tip of $.05/MB ($3.00 for a 60MB album). You'd still want to tip on top of that if you liked it; that was just to cover their connectivity. Of course, they may be popular enough, and get tipped enough as it is, to not charge that connectivity fee.
• Imagine if free file-sharing networks allowed you to hook into the aforementioned trust-metric, and determine based on that whether or not you would allow your server to send files to a c.a. Through literal peer-pressure, people would find themselves either tipping liberally, or cut off from the goods.

Such infrastructure can be exploited in a lot of other ways that bring back our ability to trust one another, and to build community even in the massive scale of the Internet and a global economy. People who've had hard times could "get a break." Or if you're a real hard-liner about people overcoming circumstance, you could set your own metrics to shun anyone who claimed hard times, or anyone who was rich without working for it, and not generous with their wealth. "The possibilities," as they say, "are limitless."

I'd recap, but you can scroll to the top for that. The bottom line is that we need to pay attention to the fears and concerns of our fellow individuals, and address those, and not just go spouting off about how we're going to do whatever we please and the industry can't stop us. We all believe the industry can't stop us, because ultimately, we can hide. But who wants to hide? And who wants a world in which sharing is a criminal act? So don't feed their fire. Help your fellow artists, consumers, individuals understand how we can build a better future together, without corporate hegemony.

And be prepared to get arrested in the meantime. But when you do, make sure you come off sane, rational, and reasonable. Make it clear that the man is putting you down. If you're not calm, careful, and likable, your fellow consumers and artists are going to see exactly what the RIAA and MPAA want them to see. And away goes your freedom and their freedom.

P.S. I'd have crossposted this to advogato, but I'm not certified by anyone as having done anything special. So if you're of a mind to, and have a decent cert there, please certify me if you think I can add value to the discussions there. Thanks.