Archive for August, 2009

Aug
28

The Benefits of Intellectual Property Rights on the Economies of Nations (Not Just Wealthy Nations!)

Posted by: | Comments Comments Off on The Benefits of Intellectual Property Rights on the Economies of Nations (Not Just Wealthy Nations!)

With a hearty hat tip to PatentlyO, one of the best blogs on intellectual property issues, here is a video of Judge Randall R. Rader of the US Court of Appeals for the Federal Circuit (CAFC) in a brief interview about the role of intellectual property rights. He scores several excellent points about the benefits that accrue when a nation encourages innovation by protecting intellectual property rights.

We mention the CAFC in the book in a passage that resonates with the words of Judge Rader:

The way of the individual patent holder has long been a hard one, often with little chance of winning suits from larger infringers equipped with deep pockets and excellent lawyers. The playing field was somewhat leveled in 1984 with the creation of the Court of Appeals for the Federal Circuit, resulting in a court that understood patents and gave their legitimate holders a reasonable chance of enforcing them. This time period corresponds with rapid escalation in the stock market, attributed to the increasing value of companies due to their intangibles—especially intellectual property.

The greatest fatigue of the inventor is experienced in countries where corruption or poorly developed legal systems result in little IP protection. So argues Hernando de Soto, a Peruvian economist and winner of many awards such as the 2006 Innovation Award from The Economist magazine for the promotion of property rights and economic development. De Soto has shown that lack of property rights has been a key factor in keeping poor nations poor. It is respect of property rights that creates the means for men to be equal in opportunity. The lone inventor can stand, patent in hand, before the giant corporation and declare, “This is my property, and you have no right to take it as your own for free.” It’s not easy, but IP gives the inventor a chance.

Remove the protection of IP rights, and innovators quickly experience the fatigue induced by theft.

There seem to be currents of decreasing respect for IP in some nations. These are currents that must be carefully navigated and, we hope, reversed, to provide the protection and motivation inventors need to take on the risk of innovation. Innovation needs liberal encouragement for the welfare of each nation.

Source: J. Lindsay, C. Perkins, and M. Karanjikar, Conquering Innovation Fatigue, New York: John Wiley & Sons, 2009, pp. 135-136.

Comments Comments Off on The Benefits of Intellectual Property Rights on the Economies of Nations (Not Just Wealthy Nations!)
Aug
27

Don’t Let Innovation Fatigue Burst Your Bubble: Another Demo from Magic and Innovation

Posted by: | Comments Comments Off on Don’t Let Innovation Fatigue Burst Your Bubble: Another Demo from Magic and Innovation

As part of the series on Magic and Innovation, today I’m using a simple magic trick with a balloon to illustrate some of the trials in producing successful innovations within a corporation. I begin by discussing the challenges and barriers that inventors and prospective innovators within a corporation face.

Available on Youtube at http://www.youtube.com/watch?v=XiF6IQO79ag

Comments Comments Off on Don’t Let Innovation Fatigue Burst Your Bubble: Another Demo from Magic and Innovation

Shortly after I became Corporate Patent Strategist at Kimberly-Clark Corporation in 2001, I had the opportunity to address nearly several hundred people in the innovation community of K-C at a large internal technical conference held at Stone Mountain near Atlanta, Georgia. My theme was “Healthy Paranoia” as the key to success in innovation. I drew upon the experience of Admiral James Stockdale, the highest-ranking naval officer held in captivity during the Vietnam War and a remarkable survivor and leader. James C. Collins’ famous book, Good to Great, describes a conversation with Stockdale regarding his coping strategy that helped him survive. Stockdale explained:

I never lost faith in the end of the story, I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.

Then he asked Stockdale about the other POWs who didn’t survive. What made the difference? Who were they?

Oh, that’s easy, the optimists. Oh, they were the ones who said, “We’re going to be out by Christmas.” And Christmas would come, and Christmas would go. Then they’d say, “We’re going to be out by Easter.” And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.

This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.

The need to confront brutal facts applies to all of us, and especially to those involved in innovation and business development. Foolish optimism leads businesses to neglect competitive threats, to ignore key information from early market studies that challenges expectations, or to make terrible mistakes with intellectual assets.

One small company with a terrific innovation recently told me not to worry about their intellectual property, for they were sure it was rock solid and didn’t need any further attention. I said, “OK, but every time I’ve heard that kind of talk in the past, it was a sure indicator of trouble.” Turns out their intellectual property estate was in shambles, and when I gently pointed out the gaps, they ended up asking me to prepare a new application, which we were able to do quickly just days before it would have been too late. Near disaster!

Innovation is always a high-risk activity. Those who do not recognize the risks and think everything is secure and sure to succeed are inevitable disappointed and often poorly prepared for the real risks they face. Those who practice “healthy paranoia” and recognize that there are risks and unknowns at every stage are much more likely to pay attention to those threats and mitigate them.

Mere paranoia and fear of the unknown is unhealthy, as it causes people to abandon the dream unnecessarily. The gloom-and-doom anti-innovation crowd lacks the faith that inspired Stockdale with the vision that he would prevail in the end. Successful innovation requires that faith, for it drives people to keep trying, to learn from their mistakes and learn from the market to iterate and find new approaches to succeed. A combination of faith in the end but a willingness to face and respond to the many brutal facts of reality – a “healthy paranoia” rather than blinding optimism – is what it takes to succeed.

The brutal facts of reality include inevitable failure in initial efforts. This is what separates the innovators from the rest. You are going to fail: the patent will receive a rejection, the initial launch may be a disaster, the partnership may go sour, the funding source may fall through, or the focus group will turn up their nose at your product. Success will go to those who learn from that, and iterate to improve and come back again. “Iterate to innovate.”

Keep the end vision intact while applying healthy paranoia to face and overcome the many innovation fatigue factors that will stand in your way.

My co-author, Mukund Karanjikar, suggested this demonstration of the principles of combining elements in new ways as a basic building block of inventing. It’s not explicitly discussed in the book, for the material most relevant to inventors already assumes skills in inventing, but it is a good reminder of some ways to strengthen whatever innovations are being pursued.

One can find unexpected phenomena through combinations of existing elements either by serendipity and luck, or by targeted exploration due to creative tinkering coupled with a thorough understanding an area (in this case Newton’s laws of motion and the physics of momentum transfer). The results may be entirely predictable in hindsight (this is often the cause for obviousness rejections from the Patent Office), but may actually be surprising and unexpected at the time of the discovery or invention. So here’s a 57-second clip featuring my son and a little momentum transfer to remind us of a couple basic concepts.

Categories : demo, inventing
Comments (1)
Aug
22

Getting Past the Closed Hand of Open Innovation: Another Video in the Magic and Innovation Series

Posted by: | Comments Comments Off on Getting Past the Closed Hand of Open Innovation: Another Video in the Magic and Innovation Series

Entrepreneurs, start-ups, and inventors seeking to bring a new product or service to a corporation for licensing or acquisition face many barriers. Open innovation can be much more difficult than people think, partly because many companies that may talk about open innovation actually practice fairly closed innovation and shut out outside ideas. There are good reasons for this, as we discuss in the book, including the desire to prevent contamination and potential law suits if they are working on related topics. But there are ways to deal with this. This video discusses one option based on good relationships with leaders inside the corporation who can give the innovation a chance. The video features a magic trick, with a bonus clip at the end showing it again, up close.

From YouTube.com/magicinnovation (Jeff Lindsay’s Magic Innovation channel): “The Closed Hand of Open Innovation: Getting Outside Innovations Past Corporate Barriers.” Recorded in Appleton, Wisconsin. All rights reserved.

This is video #7 in my series of “magic innovation” video lectures.

Comments Comments Off on Getting Past the Closed Hand of Open Innovation: Another Video in the Magic and Innovation Series
Aug
19

“He Wouldn’t Touch Innovation with a Ten-Foot Pole”: Reaching Out to “Anti-Innovation” Leaders

Posted by: | Comments Comments Off on “He Wouldn’t Touch Innovation with a Ten-Foot Pole”: Reaching Out to “Anti-Innovation” Leaders

In dealing with many innovators and companies in our work at Innovationedge, we sometimes hear complaints about leaders who seem to be anti-innovation. You know, the kind who supposedly “wouldn’t touch innovation with a 10-foot pole.” Sometimes these leaders aren’t really anti-innovation, but anti-waste and especially pro-results. That’s not a bad thing!

Maybe their past experience with innovation showed little return and little direction. Maybe they were once talked into supporting misguided innovation adventures without the right strategy, controls and metrics. Maybe innovation waste came out of their pocket. These leaders sometimes can be reached and shown a better way such as the “Horn of Innovation” paradigm described in Conquering Innovation Fatigue for more productive, targeted innovation.

Once they understand what innovation can do when guided by the right strategy once they see what metrics make sense to gauge progress, they can become more comfortable with meaningful, targeted innovation. In fact, they can become some of the best champions of real innovation. Don’t give up on them. Reach out with our “ten-foot pole of innovation” and help them become converts to innovation that matters.

From YouTube.com/magicinnovation (Jeff Lindsay’s Magic Innovation channel): “Reaching Executives Who Wouldn’t Touch Innovation with a Ten-Foot Pole.” Recorded in Appleton, Wisconsin. All rights reserved.

This is video #5 in my series of “magic innovation” video lectures. OK, they’re a bit lame, and it’s not secret that I’m an amateur, but I hope you’ll learn something useful from some of them. Or have a bit of fun. And don’t forget, of course, to buy the book.

Comments Comments Off on “He Wouldn’t Touch Innovation with a Ten-Foot Pole”: Reaching Out to “Anti-Innovation” Leaders
Aug
18

Salt from Water: Getting Granular with Disruptive Innovation

Posted by: | Comments Comments Off on Salt from Water: Getting Granular with Disruptive Innovation

While giving a pseudo-explanation for the “physics” behind our last video post, a new tongue-in-cheek demonstration is provided that launches a brief discussion of disruptive innovation and the role that intellectual assets can play. The physical demonstrations occurs in the first 4 minutes, then there are 3 minutes of further discussion. (Sorry about the lighting – my hair isn’t that dark!)

Disruptive innovation involves a product or service that motivates the established incumbents to ignore it or flea to higher ground by focusing on high-end customers. The disruptive innovation tends to be “worse” in some way and initially only attractive to non-users or low-end users of the existing technology, so it is not perceived as a serious threat nor does it cause serious pain as it gets a foothold. The disruptive innovation tends to lack the bells and whistles of existing offerings, but provides new dimensions of convenience, low-cost, easy access, etc., that are not key features being sought by the incumbents. But once the easily-ignored “worse” disruptive innovation gets established, it can, through successive sustaining innovations, reach an increasing large portion of the market and eventually cause direct pain to the incumbents. By the time they feel the pain and recognize the threat, it may be too late because they have not developed the new skills, supply chains, or infrastructures needed to compete effectively. Toast.

The problem with disruptive innovation is that established companies, especially large companies, have filters in place that tend to kill it. The opportunity is too small, not aligned with their core competencies, not aligned with what existing customers are asking for, etc. So it is killed or ignored, whether it comes from internal innovators or external innovators.

In our chapter on disruptive intellectual assets, we explain how a low-cost intellectual asset strategy can be used to overcome the known problems in responding to disruptive innovations. By pursuing these intellectual assets at an early stage in the name of mitigating external risk, you can actually lay a foundation for later products or services of your own when the corporation realizes the importance of the opportunity. Without the intellectual asset foundation, it would normally be too late. An aggressive intellectual asset team can make a huge difference in protecting a company and lying a foundation for future success.

From YouTube.com/magicinnovation (Jeff Lindsay’s Magic Innovation channel): “Salt from Water: Getting Granular with Disruptive Innovation.” Recorded in Appleton, Wisconsin. All rights reserved.

Comments Comments Off on Salt from Water: Getting Granular with Disruptive Innovation
Aug
17

The USPTO and the US Patent System: Informative Investigative Reporting in the Milwaukee Journal Sentinel

Posted by: | Comments Comments Off on The USPTO and the US Patent System: Informative Investigative Reporting in the Milwaukee Journal Sentinel

Those of you who follow me on Twitter may have seen a post last night pointing to a newly published resource about the US patent system from Wisconsin’s leading newspaper, the Milwaukee Journal-Sentinel. In addition to a fascinating interactive resource at JSOnline.com, John Schmid and Ben Poston, two outstanding reporters, have prepared a valuable two-part series on the US Patent System as part of their “watchdog” program. I’ve spoken with John recently and appreciate his genuine efforts to not only be fair, but to dig deep and understand complex issues. He and his co-author have obviously been burning the midnight oil to craft their series on the patent system and probe how some of the challenges in the US affect companies, universities, and entrepreneurs.

Their first article, “Patent backlog clogs recovery: Agency’s inability to keep pace undermines American innovation, competitiveness,” raises some serious red flags about what is happening in the USPTO. It’s not pointing fingers at the USPTO per se, but at the need for Congress and other elements of our government to do more to strengthen our patent system and US competitiveness. Here are some of their findings:

Amid the worst downturn since the Great Depression, the U.S. Patent and Trademark Office could be seen as a way to jump-start the economy. Instead, it sits on applications for years, placing inventors at risk of losing their ideas to savvy competitors at home and abroad.

The agency took 3.5 years, on average, for each patent it issued in 2008, a Journal Sentinel analysis of patent data shows. That’s more than twice the agency’s benchmark of 18 months to deal with a patent request.

The total number of applications waiting for approval, more than 1.2 million, nearly tripled from 10 years earlier.

The Journal Sentinel also found:

  • Under a practice that Congress authorized a decade ago, the Patent Office publishes applications on its Web site 18 months after the inventor files them, outlining each innovation in detail regardless of whether an examiner has begun considering the application. The system invites competitors anywhere in the world to steal ideas. [Update: Actually, if the patent is filed in the US only, it is possible to request nonpublication, in which case the invention isn’t public knowledge until it is issued as a patent.]
  • For more than a dozen years starting in 1992, Congress siphoned off a total of $752 million in fees from the Patent Office to pay for unrelated federal projects, decimating the agency’s ability to hire and train new examiners.
  • As its backlog grew, the Patent Office began rejecting applications at an unprecedented pace. Where seven of 10 applications led to patents less than a decade ago, fewer than half are approved today – a shift that a federal appeals judge termed “suspicious.” The same judge calls the agency “practically dysfunctional.”
  • Staff turnover has become epidemic. Experts say it takes at least three years for a patent examiner to gain competence, and yet one examiner has been quitting on average for every two the agency hires.
  • Patent activity, a widely accepted barometer of innovation, is showing exponential growth in increasingly competitive economies such as China, South Korea and India. As developing economies strive to commercialize and protect their technologies throughout the world, they add tremendously to the U.S. Patent Office’s workload.
  • In many cases, applications languish so long that the technology they seek to protect becomes obsolete, or a product loses the interest of investors who could give it a chance at commercial success. “Patents are becoming commercially irrelevant to product life cycles,” said John White, a patent attorney and former examiner.

For an American start-up company, a patent application is often the only asset, which creates a Catch-22: Start-ups often need a patent in order to get funding; yet without that funding, entrepreneurs can’t afford the mounting fees and legal costs to keep the patent application alive or to fend off infringers.

The article continues with a look at the impact of these problems on several Wisconsin companies.

Part 2 of the series is “Patent rejections soar as pressure on agency rises: Penalized for flawed approvals, examiners keep pace – and pay – by refusing applications.” This deals with the increasing barriers to allowance and the loss of morale among many seeking patent protection. Here’s an excerpt:

After consistently rejecting applications at a rate of about 35% since 1975, the Patent Office — faced with a growing backlog — underwent a convulsive shift around 2004 and now turns down well over half. In the quarter that ended June 30, it denied more than 59%.

Critics contend the agency’s efforts to catch up with the burgeoning backlog have only made things worse. At the same time, the number of appeals filed by rejected applicants such as Mertz has skyrocketed, further clogging the system.

The agency has become “practically dysfunctional,” says Paul Michel, chief justice of the Court of Appeals for the Federal Circuit, the branch that handles the nation’s patent cases.

“Innovation is supposed to get us out of this economic crisis,” said patent attorney Teresa Welch, who works in the Madison office of Michael Best & Friedrich. “But if the Patent Office is not issuing patents — and they’re not — it’s not going to happen.”

The Patent Office contends that more patent applications are being rejected these days because more deserve to be rejected. Patent Commissioner John Doll, who started as a patent examiner in 1974 and served as the agency’s acting director from January to August this year, proudly spent the past two years showing off a chart depicting the declining allowance rate — the percentage of applications that are granted as patents — as he made public appearances.

As one who has faced some arguably unreasonable rejections and lengthy delays in obtaining patents, I can sympathize with these frustrations. Of course, every patent applicant believes they have an allowable application and will feel that a rejection is unfair and harmful to the business opportunity they are pursuing. It may be that the higher rejection rate does not reflect a serious drop in the quality of applications but may at least partially reflect internal pressures of an overwhelmed and under-funded USPTO, but rejections per se are not a problem.

I would suggest that we should also remember that each allowed patent affects more than just the patentee. A patent can shut down competing businesses or squelch entrepreneurial plans. It is right that the original, true inventor should have some protection for unique intellectual property that he or she developed. But when a patent is allowed for something that is not novel or truly is obvious, then that which should have been part of the public domain may be removed and capricious barriers to business success may be imposed that can actually hurt innovation in the long run. In our book, Conquering Innovation Fatigue, we support protection of property rights and advocate a strong patent system, but we also dedicate an entire chapter to a case study of the harms that ensue when a bad patent is issued. In the case we explore, an innovative Wisconsin sprout farmer nearly lost his entire business because of a clearly questionable patent from Johns Hopkins University. In spite of “slam dunk” prior art, it still took five years and most of the retirement funds for our local innovator to stand against the high-paid team of lawyers from a powerful university and prevail. The balance between allowing valid patents and not allowing invalid patents is a delicate one that requires caution. Not just caution, but plenty of time and resources for careful examination and highly skilled examiners.

One interesting step for improved and accelerated examination, which we discuss in our book, is the Peer to Patent pilot program with the USPTO. My experience with my own patent for a security system was remarkably positive. Got an excellent examination and rapid allowance of the software/business method patent, shaving years off the normal examination time. I hope that Peer to Patent continues to expand. Meanwhile, I agree with the gist of what John Schmid and Ben Poston are saying: we need to strengthen our US patent system to reduce the backlog, maintain high quality, and promote sound intellectual property rights in the US. Easy to say, but carrying that out is a remarkably difficult task.

(Cross-posted at SharpIP.com)

Categories : miscellaneous
Comments Comments Off on The USPTO and the US Patent System: Informative Investigative Reporting in the Milwaukee Journal Sentinel

A heavy-handed or micromanaging approach to handling a community of innovators in a corporation often has an unintended chilling effect that can put the freeze on innovation. Avoid this innovation fatigue factor by respecting your innovators, listening to them, and giving them the freedom to apply their talents within the constraints required for the project.

As we emphasize in our book, innovation takes place in the minds of individuals. Bonds of trust and mutual respect are essential to maintain the tenuous “will to share” that leads members of your innovation community to share their best thinking and their creative energy for the good of the corporation. Treating them with disrespect, as mere handymen or even children, in some cases, or imposing capricious or unfair changes upon them, or attempting to micromanage them, can break those bonds and leave them unengaged. If you don’t have their hearts, you don’t have their minds.

To increase your success with your innovation community, it’s time for you to tune in to the “Voice of the Innovator” and understand their issues, their thinking, and their needs. Success often begins with listening and healthy two-way communication. But just reaching in to stir things up and squeeze them with high-pressure tactics might create an ice-block in your innovation pipeline.

From YouTube.com/magicinnovation (Jeff Lindsay’s Magic Innovation channel): “Avoid the Corporate Chilling Effect on Innovation,” August 17, 2009. Recorded in Appleton, Wisconsin. All rights reserved.

Aug
15

Transforming Nickel Ideas to Dollar Innovations

Posted by: | Comments Comments Off on Transforming Nickel Ideas to Dollar Innovations

As part of my “Magic and Innovation” series, here is a 3-minute video blog, “Transforming Nickel Ideas to Dollar Innovations: The Danger of Excessive Valuation of an Invention.” In it, I discuss one of the innovation fatigue factors that stem from the innovators or inventors themselves when they think their early-stage invention or embryonic innovation is far more valuable than it really is. This brief lecture includes a sleight-of-hand effect in which a nickel coin is transformed to something more valuable. No trick photography is used.

It’s so easy for a prospective innovator with a great idea, an interesting product, a cool gadget, or a new software concept, to do some calculations and come up with gargantuan valuations. “Let’s see, everybody in the world eats bananas. If as few as 20% of the North America buys my new automatic banana peeler and slicer at $15 each, that’s $1 billion for North America alone! So all I want is $50 million and you can own my provisional patent application. And I’ll toss in my non-functioning plastic prototype for free. ” Inventors and entrepreneurs need to look through the same “Lens of Risk” that potential licensees or acquirers must use. Going from a nifty “nickel” concept to an innovation that succeeds in the market involves numerous risks that must be overcome for the transformation from nickel to dollars to occur. Until you help your prospective partner or licensee have a genuine reason to believe that success will come, the value of your brilliant concept will be painfully low. But there are things you can do to enhance its value and help overcome the hurdles to success. This includes building the diverse intellectual asset estate we discuss in the book, completing your “Circuit of Innovation™,” working with partners to overcome various hurdles, and making iterative changes to address feedback from the market place. It’s not easy, but when done right, you can greatly increase the odds of success and experience the magic of successful innovation.

From YouTube.com/magicinnovation (Jeff Lindsay’s Magic Innovation channel): “Magic and Innovation: Transforming Nickel Ideas to Dollar Innovations,” August 14, 2009. Recorded in Appleton, Wisconsin. All rights reserved.

Comments Comments Off on Transforming Nickel Ideas to Dollar Innovations

Our Mission

InnovationFatigue.com is the official blog for the new book, Conquering Innovation Fatigue. Here we provide supplementary innovation, news, tips, updates, and, when needed, a correction or two, to keep those who are using the big on the inside edge for innovation success.