Ming the Mechanic:
Criminal Companies

The NewsLog of Flemming Funch
 Criminal Companies2003-11-21 15:15
20 comments
by Flemming Funch

There's something really infuriating about companies that build their business on (mis-)using some existing laws to screw everybody but themselves. Well, the good part of it is that it exposes bad laws, and makes loads of people want to change them, but in the short term such companies will often get away with it.

Prime areas for legal, but anti-social, perverted and criminal business opportunities are in the fields of patents and copyrights. If you play your cards well, it is better business than dealing drugs, because the courts will protect you, and you don't need to produce anything valuable at all. You just need lawyers who will work for percentages.

The MPAA (movie companies' association) and RIAA (record labels' association) are continuously busy with that kind of activities. Instead of figuring out how to evolve their business towards what people want nowadays, they try to protect their old business by threatening and extorting and suing people. And they keep large volumes of perfectly useful movies out of circulation, just because they own them and don't know how to make money with them.

Several software related companies that are failing in having a real business have adopted an approach of extorting other companies. A company called SCO, which bought key pieces of UNIX from Novell, attracted investors based on a plan of extorting money from UNIX licensees and Linux users. It is an incoherent and wacky plan which probably won't work, but they're trying hard, having spent $10 million just in laywer's fees to attack other companies. More here and here.

Lots of questionable legal activity springs up around bogus patents. E.g. Altnet is a company that made a business off of creating spyware to infiltrate your computer. They now bought a patent which supposedly would allow them to extort money off of peer2peer networks. And the patent itself is a trivial technique they had no part of creating in the first place. Read about it here.

Why do I call them "criminal"? My definition of criminal isn't about whether it is legal or not, but rather that you're bereaving others of the real value of their work and creativity and amassing value for yourself that you didn't create. Nowhere is that quite as obvious as when it comes to the "ownership" of ideas.


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