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Jan
04

The Anti-Patent Revolution in the United States

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Decapitalizing IP value with our current revolution

Decapitalizing IP value with our current revolution

Many intellectual property practitioners worldwide are scratching their heads over what is happening to IP in the United States. There’s a revolution underway that over the past few years seems to have steadily eroded the value of patents and any semblance of predictability and order in the law. Patents can still be valuable, if you are lucky and have the right connections. For ordinary people and companies, patents, once the great equalizers against big companies, are now an unreliable tool. The erosion of IP rights is becoming a major factor in the growing problem of innovation fatigue in the United States.

This erosion has been achieved from a confluence of powerful currents are leading in one strong downhill direction. Congress has enacted patent reforms that make it vastly easier to challenge and destroy a patent and much harder to realize value, all of which favors those with marketing muscle, political influence, and existing market share. The Supreme Court has handed down a series of patent decisions that have eroded the value of patents. These blows have been especially forceful in the pharmaceutical and biotech fields, wiping out the value of many patents linked to “natural products,” and in the software and business method areas (e.g., Bilski and most recently Alice), making it extremely difficult to obtain IP in the technical fields with the greatest potential for innovation and growth as we move from the coarse manufacturing of the industrial revolution into the knowledge economy. Alas, in such fields and many others, the Supreme Court has created a new subjective tool against patents by ruling that anything “abstract” cannot be patents, while refusing to give any clear, non-abstract definition for “abstract.” This vastly adds to the uncertainty and chaos in many IP areas. In addition to these and other abuses of IP rights from the courts and Congress, the USPTO itself has gotten into the act with its own interpretations of judicially created rules that go even further than required by the courts in limiting IP rights. Sadly, we can expect ongoing hostility toward IP from the USPTO now that it is led by someone from one of the most powerful anti-patent (or, more accurately, anti-everyone-else’s-patent) force in Corporate America, Google, the former employer of Michelle Lee. Her selection as Director of the USPTO by President Obama came as a real surprise to many IP workers, but it was less of a surprise to those who see the political power Google has amassed.

These troubling events are now compounded by one of the most troubling IP cases in recent memory, a dramatically unjust case in which the Court of Appeals for the Federal Circuit (CAFC) totally disregarded the extensive fact-finding of previous courts, a jury, and the USPTO regarding the non-obviousness of some patents, and instead turned to so-called “common sense” to fill in the missing details of the prior art to render patents invalid after they had withstood repeated and thorough tests finding them to be valid and non-obvious. This was done in violation of the duty of the CAFC to respect the factual determination of the previous trial court in an appeal. Instead, the CAFC acted like a trial court, but without the information and testimony needed. “Common sense,” like “abstraction,” can be pulled out of the air at whim to poison a patent–when the rule of law is weakened and those charged with respecting the law instead make their own law as they go.

The case I’m referring to, not surprisingly, involved a company suing Google for patent infringement. We can expect to see more of this kind of thing, big companies with influence getting off free when infringing the patents of smaller companies (especially if they can be called “trolls”). For details, see Jeff Wild’s article, ” IP/Engine v Google, AOL et al – the most troubling patent case of 2014” in the IAM Magazine Blog, Dec. 22, 2014. This case involving the company Vringo deserves careful scrutiny (and howls of outrage).

Sometimes revolutions are necessary for the good of mankind, but many turn out to be excuses for someone to seize power, loot innocents, and create chaos. Until the US returns more fully to the rule of law in the IP arena and strengthens its laws to respect IP, especially for small companies and innovators who need an equalizer when facing Goliaths (or Google-liaths), we will face ongoing chaos, looting, and innovation fatigue as we reduce incentives and increase risks for the most innovative segments of our society, the small companies and lone inventors who are striving to create the future that giant companies are often to slow or risk averse to pursue.

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Dec
08

Simple Steps Can Dramatically Increase Participation in Innovation

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At the IP Business Congress Asia 2014 (IPBC Asia 2014), a collection of IP experts from around the world are here in Shanghai, China sharing best practices and advice to help fellow IP workers. Yesterday during a panel discussing ways to build a world-class in-house IP team, a comment from the audience provided a valuable example of how management can stimulate innovation in a company inexpensively. At Aruba Laboratories, a social event was held in which a number of people cam wearing a T-shirt that said “Thought Leader.” Before the event, such T-shirts had been ordered for every person who had submitted an invention disclosure in the past year. There was buzz about what the T-shirts might mean and why some were wearing them. Then an executive spoke and congratulated those with the shirts, explaining what they meant. This simple, inexpensive act of recognition created an incentive to submit invention disclosures, which more than doubled that year. A 200% increase in invention disclosures shared–that’s a great return for a small amount of effort.

It’s important that management work to consistently recognize and show appreciation for the innovators in the company. It doesn’t require large bonuses, though I recommend that cash incentives also be used to recognize IP creation. Creating a culture of innovation above all requires the attention of management and leaders throughout the company.

There are many other issues to consider. For example, the attitude of the Legal Department in interacting with inventors can affect inventor attitudes for good or bad. When IP attorneys are aloof and bureaucratic, it can be a barrier. When they interact regularly with innovation teams and get to know and like the potential innovators of the company and take simple steps to encourage them, this can draw out important contributions. Facilitate innovation. Small things can become big barriers or big incentives. Pay attention to these factors and constantly gauge the health of your own innovation culture.

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Oct
18

Unpatentable “Abstract” Claims in US Patent Law: How To Know It When You See It, Thanks to Abstract Art

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The US Supreme Court recently ruled that “abstract” concepts are not eligible for patents. The 2014 case, Alice Corporation Pty. Ltd. v. CLS Bank Intl. or more simply Alice, is said by some to mean the death of thousands of patents if not entire industries. Critics such as Gene Quinn say it is unworkable, vague and indefinite, giving judges and enemies of patents a capricious tool to assault patents for software and other fields. One of the alleged problems with the Supreme Court’s ruling is that they expressly refused to define the word “abstract” because, of course, it is a very difficult word to define precisely for legal purposes. Greg Aharonian has expressed outrage over the “incompetence” of the Supreme Court in failing to even attempt to explain what they mean by “abstract.” IAM Magazine‘s blog warns of “potentially catastrophic effects” of the ruling. Even the calm and collected IP professor, Dennis Couch expresses concern that “there is no standard definition for ‘abstract’ and so it is difficult to identify abstract ideas from non-abstract ideas.” Many other IP experts and patent owners are up in arms because this allegedly adds confusion to patent law and gives judges a broad club to attack patents by merely calling them “abstract.” So much whining!

So how can you know if a claimed invention is “abstract” or not, when claim language invariably requires some degree of abstraction to describe the invention? OK, that’s a fair question, but there’s an easy answer thanks to the visual arts!

With a little artistic understanding, it is easy to predict precisely where the boundaries are for the hard-to-define term “abstract.” This is a case where art comes to the rescue. In my role as both a patent agent and an amateur artist, I can combine my skills to bring a little clarity. Students of art, especially the visual arts, know that artistic expression can capture and define concepts that cannot be precisely rendered by words alone and certainly not legalese.

The eye can often see what the pen cannot express. We should have learned this lesson decades ago in the debate over pornography. As Justice Potter Stewart once said, “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so.  But I know it when I see it.” This statement is from Jacobellis v. State of Ohio 378 U.S. 184, 197 (1964) and while decades old, it still applies brilliantly today. With that judicial framework, we can readily see that pornography is equivalent to the abstract in patent law. Yes, you can know it when you see it, and seeing is what we need to do now to understand the keen thinking of the Supreme Court on this topic. So let’s take a look and understand “abstract” based on abstract art, or more specifically, photographic abstracts selected from my own work, including collections of abstract photographic art. I think after a few examples you will better appreciate just where the boundaries are that separate “abstract concepts” from the concrete, tangible concepts suitable for patentable inventions.

Knowing It When You See It: Examples of Abstraction, Illustrated by Photography

Here I present a series of works from my abstract photographic art and discuss the nature of the abstraction.

People in the Capital, Madison, Wisconsin

People in the Capital, Madison, Wisconsin

The abstract above resembles abstract geometric concepts found in many paintings, almost cubist in flavor, but achieved using photography. I snapped a photo of a group of people inside the Wisconsin State Capital in Madison, Wisconsin, but using a slow shutter speed that resulted in blurring of many features. But you can recognize a black man with a baseball cap on the left. In his right hand is an iPod and you can see a white line representing the ear buds he is wearing. On the right side we see the side of a woman with a purse. Of course, while baseball caps, iPods, ear buds, and purses, like people themselves, are relatively tangible objects, in this context they are rendered less specific by the way in which they are captured or described, thereby creating abstraction from that which was initially concrete and specific. Let that be a lesson to patent drafters, by the way!

Here’s another with a related technique:

Rental Car Dashboard

Rental Car Dashboard

This abstract is based on the structures and controls of the front panel of a rental car. The camera was moved as I snapped the shot. Not a random mistake, but a deliberate effort to convert the concrete into the abstract by blurring and twisting. Of course, the limitations of language tend to do this to some degree to all inventions, no matter how tangible, as they are “blurred” and captured with the unsteady lens of a single patent claim. A little burring in inevitable, but this much blurring definitely turns the tangible into the abstract.

Now let’s consider abstraction without blurring:

Entrance to a Mall in Milwaukee

Entrance to a Mall in Milwaukee

This is a geometrical abstract wherein the elements (abstract circles and lines) from a physical structure dominate the image and create an abstraction. This essentially untouched photo was taken from the entrance of an abandoned shopping mall in Milwaukee, Wisconsin. The scene is drawn from the concrete–or rather, from metal beams, glass, and brick–but when viewed in this way, becomes a combination of abstract elements: circles and lines, rhythm and color. Clearly abstract. The silhouette derived from a remote tree reflected in glass at the bottom is an abstraction representing the intrusion of nature into artificial man-made realms. Don’t let the hint of a tree distract you from the abstract theme here. After all, anything derived a tree is a product of nature and thus unpatentable, according to the Supreme Court in their recent Mayo v. Prometheus decision, which served as a basis for the reasoning in the Alice decision.

Now it’s time for something trickier but still abstract.

Mirror and Roofing Above Cable Car Station in Rio de Janeiro, Brazil

Mirror and Roofing Above Cable Car Station in Rio de Janeiro, Brazil

This image shows a mirror and a section of translucent plastic roofing above a cable car stop on the way to a tall mountain overlooking Rio de Janeiro. The mirror and the roofing are tangible, distinct objects, as are the buildings in the background. But here the image celebrates the blues and greens in conjunction with arcs and circles. The mirror does not display the photographer, but another section of the building, and is a symbol of the failure to reflect upon one’s self, becoming lost instead in the haze of what we call civilization, even while standing next to a towering temple of nature (the unseen mountain). The mirror also punctuates the series of repeated curves of the roofing, like a grand period putting a stop to the rhythms of the sky, an abstract concept again reflecting the invasive nature of civilization. It’s all very abstract stuff, though individual components are tangible, just as patent claims may contain concrete elements such as servers, computers, and processors, but in the end create an overall impression in the mind of the viewer or judge that is decidedly abstract.

Now I turn to an abstraction that is linked to the whole concept of innovation and IP, the famous light bulb, but here an abstract version thereof.

Abstract Light Emitter

Abstract Idea Representing the Concepts of “Light” and “Bulbs”

This photo is little more than an abstract idea representing the concepts of “light emission” and perhaps “bulbs.” It was actually abstracted from a fairly specific and tangible device, a fluorescent light bulb, but with extreme photographic settings and color adjustment that removed much of what is concrete in favor of the abstract. Sure, you can argue that it has components that are somewhat tangible and concrete, but those of us who know the abstract when we see it have no trouble calling it such. It’s not a patent-worthy bulb. It’s just an embodiment of an abstract idea. Patent ineligible. I know it, because I, like any good judge, know it when I see it. Try proving me wrong! Or rather, just try proving a judge or patent examiner wrong when they see something abstract in your carefully claimed invention.

As you can see, the boundaries of “abstract” are surprisingly clear and easy to predict–and surprisingly difficult to evade. I hope this will help all those complainers worried about “uncertainty” from the Alice decision to appreciate the new kind of certainty that it gives. Good luck to all you inventors and small companies out there. May your patents be less abstract and more valuable in the future.

Originally posted at  JeffLindsay.com as “Abstract Art to the Rescue of Abstract Patent Law: How to Know “Abstract” When You See It.”

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Oct
06

Monopolies vs. Health Care Innovation: What Happens When Incumbents Decide Who Gets to Compete?

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Monopolies can innovate, just like elephants can play tennis. The results usually just aren’t very elegant or successful. Competition, on the other hand, is famous for driving innovation. Even in state-owned monopolies, like NASA’s initial monopoly on space exploration in the US, it was competition between nations during the rush to outer space and then competition between suppliers of technology that inspired the hundreds of inventions and innovations that NASA can proudly boast. But without the incentive to do better and stay ahead of competitors, innovation is slow and clumsy. An elephant might occasionally connect with a tennis ball and score some points, but real success is unlikely.

That all seems pretty obvious to most people, but not to those who benefit from monopolies. Real monopolies do not arise from the success of a competing company like Apple or Google as they rise above competitors and increase market share. In a free market, the competitors are still there and can enter the battle as they wish. Real monopolies arise from the power of the State that prohibits or restricts competition to favor a protected entity. Real monopolies can result in huge profits for the players and great power for the politicians and bureaucrats controlling the field, but they tend to crush meaningful innovation, especially from small start-ups with bold new ideas. If you can keep the start-ups from every showing up in the marketplace, you have enshrined innovation fatigue. Sadly, that’s what is happening in the United States now in the health care sector.

As William Jasper reports, “Certificate Of Need” laws in over 30 states restrict market entry in medicine and healthcare as they protect overpriced hospitals and medical providers. The federal Department of Housing and Urban Development exercises authority over Certificates Of Need. According to Jasper:

Before a hospital, clinic, nursing home, or other healthcare facility can be built, a Certificate Of Need, a CON, must be obtained. Not only that, but in many jurisdictions, a facility must obtain a CON even to install new equipment, such as a CT scanner, MRI machine, a lithotripsy machine, or other important medical technology.

This system prevents new competitors from entering the market and rewards the current dominant players. It is a corrupt cartel system that prevents innovation and competition, denies consumers choices in healthcare, and guarantees ever-rising prices. It’s no surprise, then, that the big companies in the healthcare industrial complex and their Big Government allies support this system. Certificate Of Need laws are indeed a con game — and we are the victims.

If your state has this system, urge your leaders to repeal them and break the grip of incumbents over innovation in health care. The effect of a free market in innovation in healthcare is well illustrated in the fields of cosmetic surgery and Lasik eye surgery, areas not highly regulated, not covered by insurance and Medicare, and areas where advertizing of price and abundant, aggressive competition is allowed. In these fields, real prices have been declining while patient satisfaction (especially in the Lasik areas) is extremely high. When innovation and competition can prosper, good products and services can flourish and prices can actually come down.

Give innovation a chance. “Certificates of Need” do just the opposite. A better name would be “Certificates of Greed.”

Categories : government, health care
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Sep
20

David and Googleliath (or VSL vs. Google): A Small Company Fighting a Giant Reminds Us Why Software Patents Matter

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A small start-up company fighting one of the great giants of all time: it’s a classic story of David vs. Goliath, or in this case, David vs. Googleliath (a.k.a. VSL vs. Google).

Googleliath's Googleplex (source: Wikipedia)

Googleliath’s Googleplex (source: Wikipedia).

Many small companies have claimed that Google misappropriated trade secrets or other IP, but rarely has Google graciously (and accidentally) cooperated in providing smoking-gun evidence the way they apparently did for Vedanti Systems, Ltd. (VSL). In this case, they allegedly left sticky notes on VSL’s trade secret materials showing their questionable intentions to take Vedanti’s technology. If VSL prevails against this giant, it may be more a case of Googleliath falling on its own sword than David being great with a sling.

VSL and their partners are now suing Googleliath for infringement of patents and theft of trade secrets in two courts. The suits are against Google (here also known as “Googleliath”) and their subsidiairies, YouTube and On2 Technologies. London-based Vedanti Systems Limited and their U.S.-based parent, VSL Communications, Inc., have turned to Max Sound for help in enforcing IP rights. The patent suit was filed in U.S. District Court for the District of Delaware, while the trade secret suit was filed in Superior Court of California, County of Santa Clara.

The complaints claim that Google executives met with Vedanti Systems in 2010 to discuss the possibility of acquiring Vedanti’s patented digital video streaming techniques and other trade secrets. Vedanti’s compression technology for streaming audio and video files is far superior to what Google had, Google’s own standards for streaming video t the time led to “jittery, low-quality video and sound for large-sized video files,” according to the patent complaint.

As part of the talks with VSL,  Google had access to trade secrets such as VSL’s proprietary codec for encoding and decoding a digital data stream.  That codex has proprietary techniques for “key frame positioning, slicing and analyzing pixel selection of video content to significantly reduce the volume of digital video files, while minimizing any resulting loss of video quality.”

Shortly after the negotiations began, Google allegedly began implementing VSL technology into its WebM/VP8 video codec, applying what they had learned from VSL but not letting VSL know. The WebM/VP8 video codec is extremely important for Google. It is used in many of their services and websites including YouTube.com, Google TV, the Android operating system, and Chrome web browser. They had inferior technology, but by allegedly stealing Vedanti’s, they were able to quickly advance their business at virtually no cost.

There’s just two pesky little problems for Google:

1. Vedanti has patents for its technology and is not afraid to sue. Now you might see why Google seems to really hate software patents (rather, other people’s software patents). They have been a leading force in some of the patent reform measures and related steps that have made protecting IP rights harder than ever for little guys like Vedanti. This giant, with its easy access to the White House and many other influencers, has also been an important voice against software patents, and may have helped influence popular opinion and the courts into recent devastating attacks on software patents. But Vedanti’s patents are still alive for now, so Google has cause for concern.

2. Google seems to have assisted VSL’s case by returning VSL’s trade secret materials with tell-tale sticky notes all over them showing their intent. Huh? This is really an amazing part of this story.

Attorney Howard Ankin puts it this way in a post from Sept. 17, 2014:

When the VSL Google talks ended, VSL demanded the return of its files. The returned documents were covered with incriminating Post-it notes that had apparently been left behind by Google employees. Attorney Adam Levitt claims that the notes said, among other things, that Google might possibly be infringing VSL’s then-pending patent and that Google should “keep an eye” on VSL’s technology and sweep it into a Google patent. In addition, notes warned Google engineers not to be caught “digging deep” and to “close eyes to existing IP.”

The complaint alleges that Google began to amend its preexisting patent applications and file new applications using VSL’s technology. Then in early 2012, VSL noticed that there were significant improvements to the video quality of Google’s Android operating system as well as other Google software. In June, the staff at VSL analyzed Google’s publicly available code only to discover that the code contained VSL trade secrets. Levitt asserts that the “Defendants’ theft of VSL’s trade secrets pervades virtually every website and product offered by defendants.”

“The use of new technology by established companies should be based on original creation and innovation,” said Adam Levitt, head of Grant & Eisenhofer’s Consumer Protection practice, who is representing the plaintiffs. “Vedanti Systems created groundbreaking digital video technology — technology that has forever changed the way that video content is streamed and displayed over the Internet.”

The lawsuits allege that Google willfully infringed Vedanti Systems’ patent and did so deliberately and knowingly, while recognizing the serious shortcomings of their own video streaming capabilities prior to the infusion of stolen IP.

Whether the suit will succeed or not remains to be seen, but I find Google’s lapse in leaving sticky notes on the borrowed materials to be rather hilarious, if it is true. One thing is for sure: If Vedanti’s allegations are factual, their chances of seeing some degree of justice are vastly greater by virtue of having a patent than if they did not. Software patents are essential for protecting innovations in the hugely important arena of information technology. This is the Knowledge Economy, folks, not the Iron Age. Economic growth and progress is more likely to come from advanced software and IT innovations than from hammering out better cogs and gears, and we need an IP system that understands this. Most judges and politicians ranting against software patents or patents in general do not understand this. Recent ruling that make many software innovations not even eligible for patents show that we have judges and influencers very ignorant of the physical nature of information and computer systems. Innovations like those of Vedenati are not tantamount to mere abstraction and mental exercises. They should have just as much right to be considered for a patent (provided they are novel, nonobvious, and useful) as any tool wielded by or widget hammered out by an innovative blacksmith.

Software patents matter, and they are vitally important for the best innovators of our day if they are to stand against the anti-patent giants that want anything but a level playing field. VSL vs. Google, or David vs. Googleliath, is a compelling reminder of that.

VSL’s patents in Europe are already causing pain for Google. Here is an excerpt from “Court Seizes Google’s Infringing Android Devices in Germany at IFA,” Stockhouse.com, Sept. 11, 2014:

SANTA MONICA, CA–(Marketwired – September 11, 2014) – VSL Communications, creators of Optimized Data Transmission technology and Max Sound Corporation (OTCQB: MAXD) (MAXD) creators of MAX-D HD Audio solutions, have been granted multiple preliminary injunctions from the District Court Berlin against OEM’s (Original Equipment Manufacturers) to stop the sale of certain Google Android devices in the Federal Republic of Germany at the Premier show IFA in Berlin (Internationale Funkausstellung, http://www.ifa-berlin.de/en), the world’s leading fair for Consumer Electronics and Home Appliances).

Max Sound, under agreement with VSL Communications, is enforcing intellectual property rights on VSL’s behalf and has obtained preliminary injunctions against Shenzhen KTC Technology Co. Ltd and Pact Informatique S.A., France. German Customs authorities further inspected several other exhibitors of smartphones and tablet PC’s with Android operating system. Shenzhen KTC Technology Co. Ltd. is one of the largest Chinese electronics groups operating worldwide, and Pact Informatique is a French electronics company operating in many European countries under the brand Storex. Max Sound’s actions were based on infringement of VSL’s European Patent EP 2 026 277 concerning an Optimized Data Transmission System Method. The Infringement was found on the basis that Google’s Android OS implements the H.264-Standard for video encoding, which is protected by VSL’s patent. A bailiff seized all smartphones and tablets of KTC and Pact at the trade fair IFA in Berlin on September 10, 2014. The injunctions have no automatic time limit, and opponents can file an opposition.

So what will Google do? For starters, I’m predicting we’ll see VSL and their allies soon being called some kind of “troll.” I also think we can rely on Google’s friends at the USPTO and beyond to find all sorts of reasons why Vedanti’s patents aren’t even drawn to patent eligible subject matter, regardless of how novel they may be. But the trade secret case is where I think tiny Vedanti might have a fighting chance, thanks to Googleliath’s cooperation with the sticky notes. Who said IP law wasn’t entertaining? Weird Al could have a lot of fun with this story. Suggestions for what tune to use in his spoof?

Note: The US cases referred to are captioned as: Vedanti Systems Ltd. and Max Sound Corp. v. Google, Inc., YouTube, LLC, and On2 Technologies, Inc., No. 1:14-cv-01029 (D. Del., filed Aug. 9, 2014) and Max Sound Corp., VSL Communications Ltd., et al. v. Google, Inc., et al., No. 114-cv-269231 (Cal. Sup Ct.).

Related stories:

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Sep
11

Crazy Over Innovation at Uber

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uberAt the Marcus Evans Innovate 2014 Conference in Shanghai today, I met Rosalie Wu, the head of marketing in China for the rapidly growing startup, Uber. Rosalie was Uber’s first hire in China and exemplifies the energetic, entrepreneurial spirit that is driving Uber to global success. She spoke about the development of Uber’s innovative business model and the many innovations they continue to add in their unique approach to “glocalization,” wherein a company going global adapts its products and business model to the unique constraints and opportunities of each local market. I see Uber at the poster child for sound and innovative glocalization.

Uber began when one of its founders and first CEO, Travis Kalanick, attended Le Web in Paris in 2008 and struggled to get a cab in snowy weather. He realized there had to be a better way to use the free market to solve the basic problem of getting a ride. His passion for solving this problem resulted in forming a San Francisco start-up that began in 2010 with a mobile app for ride sharing in San Francisco. Today they offer a refined and clever business model with services in over 200 cities. Beijing was #200, and Uber is marching rapidly across China and other parts of the world. Rosalie’s enthusiasm for Uber is contagious and really stirred the audience here at the Hongqiao Marriott Hotel.

Uber’s business model innovation includes systems for registering, insuring, and rating drivers. It offers flexible pricing that helps tap the power of the free market much better than conventional taxi pricing and taxi systems can. With Uber you can select quality drivers and have simple, positive experiences getting to where you need to go when you want to be there. The business model is being extended with many other innovations such as delivery of products and even services (in China, they have even offered the service of having a traditional Chinese lion dance sent to be performed in your office). The innovate their offerings to meet local needs and adapt to local regulations and customs, while finding clever ways to continually make people’s lives better. This will inspire the competition to do more and bring ongoing innovation that will benefit us all. Amazing what a bad snowy night can do when an innovator is around.

Less than a year ago, Uber was valued at over US$3.5 billion.  A few months ago in 2014, Uber was valued at around $17 billion. This is the power of doing something that brings people together in new ways.

Uber has faced and overcome a host of innovation barriers. Funding challenges, regulatory burdens, and stiff competition. But they have forged ahead with a relentless focus on making life better for its customers with green, energy saving, disruptive innovation . May the path before them remain wide open. Kudos, Uber!

Jul
11

Alice in Blunderland: The Supreme Court’s Alice Decision Fails to Grasp the Physical Reality of Information

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The recent Alice decision from the Supreme Court threatens patents for many innovators working with computers, software, information, and knowledge–in short, the heart of the modern Knowledge Economy. By waving around the undefined word “abstract”–a word that the Court expressly refused to define–they have ruled that a major part of the economy is simply not eligible for patent protection. An article at the popular IP blog, PatentlyO, seeks to explain if not justify the Court’s ruling. In “Alice, Artifice, and Action,” Jason Rantanen elucidates the thinking of the Court as he explains that the problem with the invention in Alice is that ultimately, what it involved “is just information” and thus intangible or abstract, unworthy of patent protection. I recognize this is a widely held belief, but it is not based on modern science. Maybe superstition, but not science.

It’s time for those in the IP profession to recognize what many scientists and engineers have long understood: that information is physical. Just as e=mc^2 helps us understand the relationship between matter and energy, the laws of thermodynamics plus a good deal of modern quantum mechanics and other fields helps us understand the physical relationships between information, matter, and energy. Entropy is one of the key physical concepts that helps us appreciate that linkage. See Wikipedia’s article on this topic at http://en.wikipedia.org/wiki/Entropy_in_thermodynamics_and_information_theory.

Information cannot be processed without physical, material change often affecting more than just physical entropy alone. That information processing may be in the form of electronic signals, computer chips, magnetic media, graphical interfaces, or chemical reactions with DNA (DNA, of course, is “just information” encoded with a brilliantly simple and tangible system).

In the Industrial Age, we focused on inventions made with cogs and pistons, steel and glass–crude, weighty, and easy to touch or see. Their making and their use involved smoke and flame, clangs and whirrings that nobody could miss. But we have moved into the the Information Age, where the greatest innovations that will drive our economy, the Knowledge Economy, are much finer, often microscopic, involving silent, invisible (to the naked eye) change that is still every bit as physical and real as anything a blacksmith hammered out. To dismiss the workings of the new electronic machines of our day and their many fruits as mere abstractions, intangible, immaterial, the whisps of ethereal spirit devoid of substance, is to miss the reality of the greatest era of innovation and invention ever. To exclude inventions in handling information as inherently unpatentable is a tragic error, one that contributes concretely to the growing innovation fatigue in the U.S.

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Jul
10

Another Surprise from China: The Tralin/Tranlin IP-Backed Financing Results in Jobs and Green Technology for the US

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In a previous post here, I reported a huge loan to a Chinese paper company backed by its mostly Chinese IP as collateral. The 8 billion RMB obtained by China’s Tralin Paper (Quanlin Paper in Chinese, though they use www.tralin.com for their website), one of the biggest IP-backed loans in the world, not only shows that Chinese IP is coming of age, but is now being used to bring some of their technology to the US and to create over 2,000 US jobs. Tralin Paper, renaming themselves as Tranlin Paper for some reason, has just signed a deal with the State of Virginia, obtaining state support as Tralin/Tranlin/Quanlin invests $2 billion to create a new environmentally friendly paper mill and create over 2,000 US jobs. Recent news  from the office of Governor Terry McAuliffe of Virginia proudly announces the plans of “Tranlin Paper.” Also see reports at TAPPI.org and MFRTech.com.

As the West continues to decry Chinese IP and innovation, always viewing China as a source of IP theft and job loss for the US, this story may come as a pleasant surprise. Here is an innovative Chinese company that has created and protected their own IP in a green technology, used innovative financial tools (and plenty of solid Chinese guanxi) to obtain massive financing based on that IP, and then brought their money and their technology to the US to create many jobs. At least some parts of this story are going to be repeated in many ways in days to come. The old paradigm of China lacking IP or lacking valuable IP is fading.

After the announcement at ChinaPaper.net, the first report on this story to the English-speaking world, as far as I know, was my original March 6, 2014 report here at InnovationFatigue.com followed by an update here on the Shake Well blog that gave a translation of the Chinese story. It was picked up by Intellectual Asset Magazine and by World Trademark Review, but is still a generally unrecognized but important story.

China still has a long ways to go in overcoming its problems and strengthening innovation and IP, but the trends here are remarkable and should not be discounted. Meanwhile, we should welcome stories like Tranlin’s, and watch for many more to come. But for some US companies, this will mean even tougher competition that won’t be easily avoided with restrictive, protective tariffs or antidumping legislation.

(Similar account cross-posted on the Shake Well Blog.)

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Jun
07

Another Innovation Knifing: Cutting “Natural Products” Out of the Scope of Patentable Subject Matter

Posted by: | Comments Comments Off on Another Innovation Knifing: Cutting “Natural Products” Out of the Scope of Patentable Subject Matter

One of the important new antibiotics discovered and developed by pharmaceutical companies in the past few years is Rifampicin and its relative Rifamycin. These potent antibiotics remain key tools in fighting off serious infection. Their story begins with a soil sample taken from a pine forest on the French Riviera in 1957 that was then studied in an Italian laboratory, where unusual antimicrobial properties were observed in a newly discovered bacterium.  eventually an unusual molecule produced by the bacterium was identified, isolated, mass produced–and, yes, patented.

Rifamycin was credited with conquering drug-resistant tuberculosis in the 1960s. These drugs are marvelous discoveries, important pharmaceutical inventions, and became the subject of multiple patents providing protection and incentives to the developers and improvers of this unique products.

Thank goodness these products were discovered and patented decades ago, because today the USPTO would probably reject any patent application out of hand using its newly fabricated and terribly damaging rules that rule out “natural products” as patentable subject matter. This is the result of what appears to be a politically motivated attack on the pharmaceutical industry by the US government, using a Supreme Court decision (Myriad Genetics) as the excuse, but twisting it to go beyond what the Supreme Court said. The political angle is that politicians want to “stick it” to the pharmaceutical industry and appear to be taking steps to lower the cost of drugs by limiting patent scope and other means. But the long-term effect will be reduced innovation and less progress in medication.

If a product is actually novel, useful, and non-obvious, the fact that it had origins of some kind somewhere in nature should not be a barrier to patentability. The fact that an unknown bacterium in some French soil existed in nature does not enable the public to understand and produce a powerful, pure antibiotic useful in treating many diseases. Those who discovered, tested, refined, and modified the compounds produced by the bacterium deserved and needed patent production. Without it, there would be lessened incentives to take on the burdens of discovery, testing and drug development. We would be less innovative, not more, without patents for novel materials with some kind of basis in nature. But today, such patents and such innovations are threatened. It’s another example of innovation fatigue driven by political agendas and political machinations.

If you think about it, every invention has some roots in nature. The protons, neutrons, and electrons used in every object or affected in every process come from nature. Are we sure that we need a vague and indefinite “natural products” exclusion beyond the more sensible previous criteria for patentability?

 

 

 

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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.