Archive for vision
Abraham Lincoln said that the patent system “added the fuel of interest to the fires of genius.” Today the fires of genius and the fire of innovation itself is getting doused with something less helpful than fuel. These fires are being cooled and, in some cases, extinguished with harsh attacks on the IP rights that once enabled and motivated lone inventors and small businesses to take the fruits of their genius to the market.
The owners of small businesses, the people who generate most of the innovation and business growth in the United States have good reason to be worried. Their ability to attract funding through valuable intellectual property is being compromised. Their ability to protect their products and innovations from the power of corporate giants is being whittled away. This has come from many quarters, but there is a widespread anti-patent movement driven by politics and misinformation. It’s the bitter fruit of a bitter anti-property rights movement that exaggerates the threat of a few bad actors to justify widespread weakening of property rights in ways that will hurt the economy and our society for years to come.
We have seen a recent series of Supreme Court cases that have made it much harder to obtain patents and enforce them. We have seen massive changes in US patent law that make it easier to invalidate patents after they are granted and make it harder and more costly to stop infringers if your patent survives. Now the bogeyman of “patent trolls” is held up as a threat to America that requires more sweeping “patent reform” to make it even harder to enforce a patent, and it looks like both parties are united in a quest to do “something big” to shake up the IP rights that helped drive the American economy for so many decades. Corporate giants benefit from this reform as it clears away the annoyance of other people’s IP rights standing in the way of their marketing muscle. But the economy as a whole and the rights of many are hurt in this process this amplifies innovation fatigue .
Several recent articles highlight just how serious the problem has become. Louis Carbonneau in “Toxic Asset: The Gradual Demise of the American Patent” (IPWatchdog.com, December 10, 2014), surveys the radical changes in the past two or three years:
On the judicial front, in 2014 we saw no fewer than 5 Supreme Court decisions going against patent holders on the various subjects of obviousness (a key test for patent validity), what constitutes “abstract ideas” (which now undergo a more stringent test for patentability), business method patentability, indefiniteness (how you construe claims), reasonable royalty (how you calculate damages), willful infringement (how you punish the “bad actors”) and fee shifting (making losers pay for winners legal fees). All of these decisions have collectively made it harder for patent owners to: i) maintain the validity of duly issued patents (previously presumed by law), ii) pursue infringement claims, ii) prove damages (let alone treble damages), iv) have open discussions with potential infringers prior to litigating, and have left the unsuccessful patent owner at risks of paying millions in legal fees to the other side if the judges so decides.
Parallel to judicial reform at the federal courts, recent US patent reform with the American Invent Act (AIA) introduced a new post grant review mechanism called Inter Partes Review (IPR) which allows a party to challenge the validity of any issued patent before the Patent Trial & Appeals Board (PTAB). Strangely, despite the PTAB being an emanation of the same USPTO that delivered all these patents in the first place, there is no longer a presumption of validity before the PTAB for the patents being challenged while other rules make it easier to invalidate patents based on prior art.
Finally, on the political front, in 2013 the US House of Reps. passed the Goodlatte bill, which would erode rights conveyed to all patent holders despite being primarily directed at NPEs. It is now expected that the new Republican led Senate will revive the bill -currently on hold- in early 2015 and, with a rare showing of bipartisanship from the White House, it is expected to be signed into law. At the same time, 27 US States have passed or are in the process of passing laws that make it harder for people to assert the patents they own.
Carbonneau goes on to explain that in recent Federal Circuit cases, patent owners are being crushed, and in Inter Partes Review (IPR) cases before the USPTO, nearly 80% of the owners of challenged patents are being told by the USPTO that their patents are not valid over the prior art that the USPTO itself supposedly considered before granting the patent in the first place. Carbonneau puts it rather wryly:
The most interesting statistics come from the PTAB [the USPTO’s Patent Trial and Appeal Board, which processes IPR cases] because it only focuses on validity issues based on prior art; the very same prior art patent examiners are supposed to have found and analyze prior to issuing a patent. Since patents going through IPRs are usually the same ones that being litigated, you would assume that owners did a lot of due diligence before investing in a costly patent lawsuit. Well, the PTAB is declaring 77.5% of reviewed patents invalid! And this is not limited to “abstract” software; patents related to biotech and pharmaceuticals, medical and mechanical devices, are being invalidated at an even higher rate! Remember, this is an offspring of the very same agency that inventors paid thousands of dollars in the first place to review applications and issue their patents. Now, after having to pay a quarter to a half million dollars in legal fees (average cost of an IPR procedure for a patent holder), the same agency is telling patentees nearly 80% of the time: “Very sorry we made a mistake; we would not have allowed your application had we looked more carefully for existing prior art. And no, there is no refund available.”
Personally, I cannot think of any industry that could survive more than a month with a nearly 80% defective rate, let alone by forcing you to spend a fortune for the “privilege” to confirm that indeed your title was invalid in the first place! Only a government can come up with such a broken system and get away with it.
The impact of these anti-patent efforts has been a surprisingly sudden break from the trend of increasing IP litigation, with litigation in 2014 down about 13% from the previous year according to a new 2015 PwC report on patent litigation. The problem of explosively increasing patent litigation, a common excuse to justify the slashing of patent rights, is not supported by the data.
Richard Lloyd, writing for the IAM Blog, draws this observation from the PwC report:
Of these three classes [of patent litigants considered], NPE [non-practicing entity] companies have been successful 31% of the time in patent cases brought since 1995; this compares with a success rate for universities and non-profits of 48% and a lowly 18% for individual inventors. Individual patent owners also do far worse with damages pay-outs, getting a median award of $3 million compared with $11.5 million for company NPEs and $16.2 million for universities/non-profits.
There could be many reasons for individual inventors doing relatively badly. Although the PWC study doesn’t provide any, it’s easy to speculate that small inventors may have lower average quality patents to begin with, while they probably don’t have the same kind of litigation savvy as other NPEs and are much less likely to have access to the same kind of litigation expertise that larger, better funded patent owners can turn to.
But what PWC’s numbers also strongly suggest is that the US patent litigation system is strongly stacked against small, patent owning entities. Bearing this in mind, it is worrying that the main packages of reform proposed in the House of Representatives (the Innovation Act) and the Senate (the PATENT Act) are only going to penalise them further.
Lloyd notes that potential irony now that many lone inventors, recognizing that they have little chance of winning and have almost no chance of affording the punitive legal bills they may face if they sue and lose, may be more likely to turn to NPEs (“patent trolls”) for help as the most practical way to realize any benefit from their work.
There is a need to rebuild an innovation climate in the United States, starting with educating our leaders about the need for IP rights and the value of patents. If we don’t teach this lesson from within, it will eventually be taught rather loudly from without, for Europe and China are both moving to strengthen IP rights and strengthen IP enforcement. Europe’s Unitary Patent system could be a boon to IP there, though much remains to be seen, but the changes in China are strong and dramatic. That nation has gone from no patents and no IP system in the early 1980s to the world’s biggest source of IP generation and IP litigation, with many changes steadily strengthening the nation’s IP system. There is a long ways to go for China still and there have been some setbacks, but at current rates we can see China becoming a leading source of global innovation while the US loses its lead.
Will the flames of innovation be largely quenched in that nation? Much depends on what we do with IP rights now, the rights that will shape our culture and economy for decades to come. May the fires of genius be encouraged with something other than the cold water Congress and Courts have been sloshing.
I recently had the privilege of meeting Larry French, CEO of Griffon Aerospace (also see Wikipedia’s article on Griffon). He is an inventor, an entrepreneur, a pilot, and the brains behind several major product innovations, including the Lionheart 6-passenger airplane and a host of unmanned aircraft that are disrupting the aviation world with their high performance at very low cost.Griffon has made news recently with the success of its unmanned aircraft. These drones are playing increasingly important roles in military actions around the world and help save many lives (for the forces deploying them). The Broadsword, for example, is a large unmanned device that can carry numerous sensors and other devices to assist the military in many operations. New contracts have come in for that. They also recently won a 5-year contract for the production, maintenance, engineering and flight services for the Remotely Piloted Vehicle Target (RPVT) program. Their bread and butter seems to have been the Outlaw™, a 120-lb gross weight air vehicle that can carry 30 pounds of payload. If I understood correctly, they can manufacture and sell this aircraft for a about 1/5 of what their competitors have been able to do–a remarkable cost benefit that stems from vigorous innovation on many fronts. Larry began as a pilot and an inventor, creating efficient airplanes like the Lionheart in 1994. In 1994 he founded Griffon Aerospace to pursue the unmanned aircraft market. Keeping his operations close to him, with tight control over training of employees, materials, processes, design, and manufacturing has helped him to innovate across the supply chain and at all levels, resulting in significant cost reductions and competitive advantage. Griffon is based in Madison, Alabama (near Huntsville), where the launch of the 500-lb BroadSword was recently heralded by the Madison Weekly.
Larry’s journey as an entrepreneur and innovator has required that he face and overcome many of the innovation fatigue factors we describe in Conquering Innovation Fatigue. The ever-changing burdens of government regulation can be discouraging and expensive, for example. But he has found ways to cope, painful as it can be. The early years were truly difficult and required a lot of faith to keep the business alive. Now it is highly successful with over 50 employees and a bright future with valuable products that are changing the way we approach war, with far less risk to human pilots and crews. They can thank the pilot behind Griffon, the visionary innovator, Larry French.
Larry had this to say about launching his businesses:
For me I’m a “build it and they well come” business guy. I initiated and sustained the Lionheart development and marketing on 90% passion and 10% personal/investor funding. Without that 90% passion I would not have attracted believers willing to give me some of their money. Same with our current next generation of UAVs. The UAV market is in its infancy which means there are so many diverging opportunities that trying to select which of all the potential doors a winner is behind is nearly impossible. So, after reasonable absorption of the market trends, I follow my passion for the next aircraft. Fortunately now, unlike 10 years ago, I have the resources (passion, people, facilities, and finances) to convert idea to product.
Innovation never stops at Griffon. One of the next challenges on the aviation horizon is the heavy fuel engine, an engine that can burn heavy fuels such as diesel fuel or biodiesel instead of the lighter aviation fuel that can be so expensive in foreign theaters. (One energy expert told me that the delivered cost of aviation fuel in Afghanistan is $600/gallon. Wow. With diesel, local fuels could support the aircraft engine and greatly reduce costs. As heavy fuel engines emerge, I expect to see them used successfully by Griffon Aerospace, with their own added inventions.
The Summer 2010 issue of American Educator (a publication of the American Federation of Teachers) ably illustrates one of the lessons we teach in Conquering Innovation Fatigue: metrics to drive performance can have unintended consequences that may actually hurt rather than help. Indeed, unintended consequences are a major theme of our book, as we explore the problems arising from metrics, corporate and government policies, corporate innovation initiatives, laws, taxation policies, and other factors, all of which can contribute to innovation fatigue.
In terms of education and the danger of improper metrics, Linda Perlstein’s article, “Unintended Consequences; High Stakes Can Result in Low Standards,” examines a highly celebrated school in Annapolis, Maryland that received media attention and praise for seemingly miraculous success in education. The new principal arrived in 2000 to find Tyler Heights Elementary School in a dismal state with only 17% of its students getting satisfactory scores on the state test. She began redirecting efforts in the school to address this problem. Eventually her laser-focus efforts paid off, delivering the stunning success of 90% of third-graders performing well on the Maryland State Assessment, when only 35% of third-graders did so two years before. Several newspapers recognized the amazing turn-around and people at the school celebrated the success. But was it real success?
To achieve good performance on the Maryland State Assessment, education for the children was largely focused on how to do well on the test. Students learned how to write BCR’s (“Brief Constructed Response”) to deal with expected questions about poems and plays, and practiced writing these short answers for many hours, without actually studying poems or plays. “What gets tested is what gets taught,” the principal told the teachers, even if that meant leaving behind the material that was supposed to be taught according to state standards. Bins of equipment for studying science were largely unused.
Tyler Heights’ third-graders got only the most cursory introduction to economics and Native Americans, and much of the curriculum was skipped altogether. The students were geographically ignorant. . . . The third-graders had heard Africa mentioned a lot but were not sure if it was a city, country, or state. (They never suggested “continent.”) At the end of the year, the children in Johnson’s class were asked to name all the states they could. Cyrus knew the most: three. He couldn’t name any countries, though, and when asked about cities, he thrust his finger in the air triumphantly. “Howard County!”
The state standards required a broad curriculum, but the metrics for assessing that were based on one particular test and all the incentives were for helping students pass that test. In spite of the praise for the miracle at Tyler Heights, had the children really been helped?
The problem with unintended consequences from metrics such as tests is hardly unique to Tyler Heights. Daniel Koretz, also writing in the same issue of American Educator (see page 3 of the PDF file on unintended consequences), explains that in education and other fields, score inflation is a common and well known but widely overlooked problem. In the social sciences, a phenomenon that leads to score inflation is known as Campbell’s Law. While widely applied to education, it was developed while looking at business. Donald Campbell, a prominent social scientist, examined the role of corporate incentives on the performance of employees. His research led to this general formulation: “The more any quantitative social indicator is used for social decision making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.” (Donald T. Campbell, “Assessing the Impact of Planned Social Change,” in Social Research and Public Policies: The Dartmouth/OECD Conference, ed. Gene M. Lyons, Hanover, NH: Public Affairs Center, Dartmouth College, 1975, p. 35. See also Can New York Clean Up the Testing Mess? by Sol Stern.)
Campbell’s Law is at work when schools game tests to get better scores, at the expense of education. It is at work when cardiologists choose not to operate on patients who might need surgery rather than risk hurting their own published statistics on mortality rates among their patients (Koretz refers to a 2005 story from the New York Times reporting the shocking results of a survey of cardiologists). It is at work when a company tries to boost innovation with metrics or incentives that result in game playing, while leaving the real problems from culture, systems, and vision unaddressed.
In our experience, metrics and incentives can play a valuable role in driving innovation, but only when the corporation has a culture that genuinely encourages innovation, when there is a shared vision of innovation and success, and when sound systems are in place to advance innovation. Without those, you can not only waste a lot of resources in attempting to drive innovation with metrics and incentives, you can actually make a weak culture become pathological and lethal, sometimes exacerbating fatigue factors like the Not Invented Here syndrome, theft of credit for innovation, and breaking the will to share. Adding incentives linked to metrics without the right culture and systems can be sort of like throwing raw meat into a school of sharks or piranhas. You can generate a lot of activity, a lot of exciting thrashing and splashing, but in the end there will just be a lot of blood in the water and fewer thinkers and producers in your school.
As always, innovation success requires that you carefully monitor for harmful unintended consequences from the policies, programs, and incentives you have in place. Innovation metrics, incentives of all kinds, and employee performance evaluation systems and other tools associated with metrics can backfire. Unless you are tuned to the voice of the innovator and understand the impact of unintended consequences, you can be like the company we treat in Chapter 8 of our book that felt like it was a rock star of innovation while they were actually squelching it. Don’t let the unintended consequences of well-intended policies and metrics crush your innovation success.
In Conquering Innovation Fatigue, we begin with an examination of some of the reasons that people pursue innovation. Not all innovation is driven by a desire for wealth. In fact, a large number of innovators are more interested in seeing their work make a difference in the world than in becoming rich (many want both, but the desire to see real results from one’s work is often essential). Social entrepreneurship and humanitarian innovation provide evidence of this. In the book, we highlight Empower Playgrounds (EmpowerPlaygrounds.org), the non-profit innovation engine that is bringing educational success to thousands of African children by creating playground equipment that generates power for LED lamps that children can take home so they can study and do homework after the finish their chores at home. Something as simple as a portable electric lamp, charged by innovative playground power generators, makes the difference between educational failure and graduating with opportunities for college. Many thanks to Ben Markham, the CEO of Empower Playgrounds, for recognizing the need and driving so much collaborative innovation to bring hope to western Africa.
Another great story out of Africa is the Forbes article, “Can This Bicycle Save Lives In Africa?” by Stephanie Finch. After achieving international success with his bicycle innovations, Frederick K.W. Day noticed that many streets in Africa were lined with abandoned, broken down bikes that quickly fell apart on the rough streets of Africa. He also saw that the huge diversity of bikes being sent to Africa made it very difficult for mechanics to repair due to lack of proper parts and tools for the diverse designs. He is now working to bring rugged, low-cost, easy-to-repair bikes to Africa:
Through his World Bicycle Relief charity the ponytailed entrepreneur hopes to put millions of sub-Saharan Africans aboard special heavy-duty bikes designed to withstand the continent’s rugged roads while carrying 200 pounds of cargo–enough for a weaver to bring his rugs, or a farmer to tote his produce, to market. Moreover, he aims to promote a self-sustaining bicycle economy with regional operations assembling the bikes and area mechanics trained to repair them.
Frederick is making many changes in the bike as well as crafting a business model for distribution and maintenance that will meet the needs of many parts of Africa. It’s not about getting rich, but about truly making a difference in the world for thousands of people. That’s inspiring innovation!
What are your favorite examples of altruistic innovation or social entrepreneurship helping Africa?
I’ve condensed my lengthy presentation on the innovation parallels between Singapore and Wisconsin, now resulting in a 17-minute Pixetel presentation freshly recorded. This can be used instead of the longer video recording of my Singapore presentation at Biopolis for Innovation and Enterprise Week 2009.
In late 2009, I was invited to speak at Singapore’s Innovation and Enterprise Week 2009, an event held at Biopolis and sponsored by A*STAR, the world-class research organization of the Singaporean government, in collaboration with Exploit Technologies, the tech transfer arm of A*STAR. While I enjoyed the opportunity to discuss our book, the important thing to me was the opportunity to learn more about that amazing country and their bold approach to promoting innovation and technology. In my presentation for the large crowd at Innovation and Enterprise Week, I discussed the fascinating parallels between the Singapore experiment and the evolving experiment in innovation in my state of Wisconsin, where the Wisconsin Institutes for Discovery represent a brilliant approach to combining the best of public and private innovation.
Below are three video segments from my presentation. A couple of friends in Singapore took the video. There are a few gaps in sound and so forth, but I hope you can understand it. Don’t miss my lame magic trick in segment 3. They seemed to like it–proof again of the great courtesy that one finds in Singapore. In all seriousness, I think there are important lessons about innovation that can be gleaned by inspecting both the Singaporean system and the Wisconsin Institutes for Discovery, which include the Morgridge Institute for private sector research and the public Wisconsin Institute for Discovery. Madison and Singapore are on opposite sides of the world, but on the same side of the innovation spectrum, at the leading edge.
Update: On April 24, I posted a newly recorded and shortened Pixetell presentation covering the basic information I shared in Singapore, without the magic or other excursions.
I am deeply grateful to the many people who kindly shared their time to help me prepare for the presentation, including Sangtae Kim, John Wiley, Charles Hoslett, Carl Gulbrandsen and Janet Kelly from the Wisconsin side (Wisconsin Institutes for Discovery and WARF), plus Boon Swan Foo, Seito Wei Peng, and Sze Tiam Lin at Exploit Technologies in Singapore.
During our last snowstorm in my part of Wisconsin, I took the photo above of a traffic light whose traffic signals were largely hidden by snow. I saw it as a metaphor for what happens when times of economic chill blind entrepreneurs and businesses to the opportunities around them. A downpour of discouraging economic data and fear can pile up like snow on a traffic light and obscure the green light of opportunity that otherwise could be telling you to move ahead. The lesson is not to just plow ahead, nor is it to remain at a standstill until the chill ends, but to learn to look for the fainter clues that show the true color of the largely hidden glow.
This may be the right time to move ahead for the opportunity before you. Indeed, many great companies have their roots in times of economic recession. While others are cutting back on innovation and preparing to put their companies permanently in park, those who invest in innovation now will have the decisive advantage and be miles ahead of the competition when the chill ends. Look closely – there may be a green glow under all that snow.
I recently shared a presentation about the economic innovation in Brasilia, where bold actions to reduce the size of government and strengthen the climate for private sector growth have resulted in record unemployment and social progress. I have some additional information I’d like to share on some of the foundational work that has been done since 2006 to create the ecosystem for economic and innovation success in the future.
If you are interested in taking advantage of the economic opportunities in Brasilia or in better understanding the future of innovation there, let me know. And if you have perspectives that we might be able to share in our next book on some international aspects of conquering innovation fatigue, please contact me. Contact information us at the the end of the Pixetell video, or email me at jlindsay at innovationedge dot com.
As an inventor and US patent agent, one of my painful experiences in the pursuit of patents at past employers and on my own has been unexpected encounters with prior art. Even after serious and careful searching, one may later find that someone else pursued a very similar idea many years ago. Like the Good Book says, there is no truly novel thing under the sun, though there may be many nonobvious improvements thereof.
A great example of this is the iPod, an invention and innovation that may have been anticipated to some degree in 1979. “Suspiciously Prescient Man Files Patent for iPod-Like Device in 1979” is Dan Nosowitz’s recent post at Gizmodo pointing out how an old, expired patent hinted at several aspects of the iPod. Of course, music players and MP3s were already around when the iPod came out, but the 1979 data is rather surprising. That patent may have had some great concepts, but like many inventive concepts, it may have been too early to be practical and successful. Timing is so important for success in innovation: is the market ready, is the supply chain available, is there an ecosystem that can be tapped, can the concept stick and resonate with other innovations, and can it be offered economically?
Consideration of the market roadmap for a prospective innovation can be critical for success. Many times success requires adjusting the business model to find the resonances that can add energy to the offering and to find ways to present the innovation in a disruptive manner rather than going head-on against established incumbents. Innovation is often more about the business model and marketing plan than it is about the technology itself. The iTunes model was part of what made the iPod a winner. 1979 was the wrong digital era for that invention. (A hat tip to RobMcNealy on Twitter for a mention of the Gizmodo article.)
Another example of an invention ahead of its time was the photophone of Alexander Graham Bell. About.com’s article on Mr. Bell explains:
Among one of his first innovations after the telephone was the “photophone,” a device that enabled sound to be transmitted on a beam of light. Bell and his assistant, Charles Sumner Tainter, developed the photophone using a sensitive selenium crystal and a mirror that would vibrate in response to a sound. In 1881, they successfully sent a photophone message over 200 yards from one building to another. Bell regarded the photophone as “the greatest invention I have ever made; greater than the telephone.” Alexander Graham Bell’s invention reveals the principle upon which today’s laser and fiber optic communication systems are founded, though it would take the development of several modern technologies to realize it fully.
One of the challenges with visionary inventions is obtaining suitable intellectualy property. Patents expire in 20 years from the filiing date, which may not be enough to do any good when a visionary concept finally becomes economically viable. The IP estate must be developed with a broad time frame in mind and should include elements that last longer than patents such as trademarks, as well as a series of patent applications over time that reflect ongoing innovation and competitive awareness. Strategy and vision in the IP can be almost as important as the vision of the invention itself.