Pepsi Told To Pay Over A Billion Dollars For 'Stealing' The Idea For Bottled Water

from the the-world-has-gone-mad dept

Ben was the first of a few folks who sent in the story that Pepsi has been told to pay $1.26 billion (with a b) for supposedly "stealing" the idea for filtered bottled water. Seriously. Two men claim they came up with the idea in 1981 to bottle water this way and approached Pepsi distributors with the idea. They say that Pepsi "stole" their trade secrets when it launched a bottled water line, Aquafina. Of course, Aquafina was launched in the mid-nineties, a decade and a half after this conversation supposedly took place. The $1.26 billion is something of a joke as well. It's a default judgment because a Pepsi secretary apparently forgot to pass on the letter alerting them to the lawsuit, so they didn't respond. Even so... there's so much wrong with this. First, $1.26 billion? For the "idea" of filtered bottled water? And for a lawsuit filed nearly thirty years after the alleged conversation? Nearly fifteen years after the product came to market? Yeah, that makes sense...

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Bad Ideas: Trying To Build Patent Marketplaces

from the a-market-in-ideas-after-the-fact? dept

The NY Times has what feels like a warmed over press release talking up the rise of patent auctions and makes some very one-sided and weakly supported assertions that this is somehow good for the market of innovation. It's not. In any way. There have been a bunch of companies trying to "trade" in patents or patent auctions, and all they've done is help make innovation harder by separating the idea from the implementation, and encouraging more lawsuits or extortionary techniques. Patents are no longer being used for innovation or to distribute knowledge. They're used to create a tax on anyone who actually innovates, and comes up with the same concept that others have come up with. Amazingly, the NY Times notes none of this. Instead, it makes the following statement:

And patents, after all, are ideas. Any market mechanisms that speed up the process of figuring out what a patent is worth should hasten the flow of ideas into the economy, accelerating the pace of innovation, policy experts say.

That's wrong. Flat out, bizarrely, backwards and wrong. Ideas don't need a market. You want a market for scarce goods. You don't need a market for goods that are not scarce. This is fundamental stuff and has been obvious for ages. Hell, Thomas Jefferson famously noted that very issue ages ago:

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property."

Markets are for property exchange and the more efficient allocation of property. Ideas are not property, and making a market for them and holding them back doesn't accelerate the pace of innovation, it retards it. Greatly. And, more and more studies have been showing this.

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And What's The Deal With Copyright Misuse? Seinfeld Cookbook Doesn't Infringe

from the you-can't-copyright-an-idea dept

Do we need some sort of anti-SLAPP-type law against bogus copyright lawsuits over similar ideas rather than actual copying? We've seen quite a trend in such lawsuits especially concerning people who claim to have had an idea for a similar book, movie or TV show. But, of course, copyright is supposed to be clear: it's for the expression, not the idea. Of course, at times it's quite difficult to separate the two, and with our society always talking up "ownership" of content, it's perhaps no surprise that many people seem to think that they get to own certain ideas. And then they file lawsuits.

The latest such case involves Jessica Seinfeld, Jerry's wife, who published a cookbook, "Deceptively Delicious: Simple Secrets to Get Your Kids Eating Good Food." It's a pretty straightforward idea, and apparently the book has done well. That upset the author of another book on the same topic, who had apparently pitched the book idea (and had it rejected) by the publisher of Seinfeld's cookbook -- so she sued for copyright infringement. But, again, copyright doesn't cover ideas -- something you would think her lawyer would understand. Thankfully, the judge quickly tossed the case, while also taking the time to issue a bit of a thumbs-down review of the cookbook by the woman suing:

"Lapine's cookbook is a dry, rather text-heavy work," Judge Laura Taylor Swain of Federal District Court wrote in her review, while Ms. Seinfeld's "cookbook has a completely different feel and appears to be directed to a different audience."

On top of the ruling, interestingly, many people are recognizing that these types of lawsuits are really no more than PR stunts by the less-well-known author to jump on the publicity bandwagon of a best-selling author. Seinfeld's lawyers are claiming that the woman suing was just using the lawsuit as a publicity attempt, which is similar to what we've seen in other lawsuits like this one. That's why it makes sense to set up significant sanctions for actions like this, where it's clearly not a case of copyright infringement, and the lawsuit is almost certainly designed not to right some wrong, but to use the justice system as part of a PR campaign.

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Can You Plagiarize An Idea?

from the words,-words,-words dept

Time and time again, we've heard about people claiming "plagiarism" when the truth is that it's just someone else who happened to have the same, or a similar, idea. It often happens with books and movies. For example, multiple people are suing over the claim that only they could have come up with the idea of a child who has a secret life as a rockstar, and Hannah Montana stole their idea. But actual copyright infringement or plagiarism (two different things) require some actual copying -- not just people having the same idea. Given that, it's not entirely clear what's going on with the claim (found via Michael Scott) that the ex-wife of the singer Usher, Tamika Foster, may have "plagiarized" a self-published author when she wrote a blog post for the Huffington Post called "She's Pretty for a Dark-Skinned Girl..." The author claiming plagiarism had written a book, similarly titled "Pretty for a Black Girl."

But is it plagiarism, or just two people coming up with the same idea? Unfortunately, the report at the link above never bothers to tell us! It simply repeats the claim from the woman that it's plagiarism, but her quotes suggest that it's not:

"My heart sank into my stomach. All the hard work, all the sleepless nights I had endured was playing back in my head as I read this article written by a woman I didn't even know," [Aisha] Curry told BV Buzz. "Why did I feel so connected to this article? Suddenly, it came to me. It was my work! It was my work, my voice, but in her words."

Well, there's a problem there. If it's her words then it's not plagiarism. Also, Curry seems to undermine her own argument in explaining how she came up with the idea for the book:

"One day about five years ago, I was absolutely tired of being told that I was pretty for a black girl," she explained. "I started asking my friends if they had heard this statement before, and as time went on, I realized how prevalent the issue was."

Right. The comment is apparently prevalent, meaning that Tameka Foster certainly could have heard the same thing on her own, and could have decided to write her own essay about it. That's not plagiarism. That's multiple people recognizing something that's prevalent and deciding to write about it. Foster's representatives claim they've never heard of the book. But the real question is whether or not it's actually plagiarism, and that could have been determined by finding out if there were any passages actually pulled from the book. Unfortunately, it doesn't look like anyone actually decided to do that. However, as you read Foster's article, much of it seems to be about her own personal experiences, not Curry's, which again suggests this isn't plagiarism at all, but two people writing about a similar concept that is (as admitted by Curry) already "prevalent."

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Paulo Coelho: Content Creators Will Be Punished For Not Sharing Their Ideas Freely

from the welcome-to-the-new-world dept

We've written a few times about best-selling author Paulo Coelho, and his embrace of file sharing and openness -- and how it helped him sell a lot more books. Reader Esahc writes in to alert us to the text from a speech Coelho gave. The actual speech appears to be from last year, so a bit out of date, but it's still well worth reading:

He talks about the success of his own projects, from "pirating" his own books, to having the community make their own movie out of one of his books. At the same time he discusses the rise of technology and the folly of pretending you can fight the technology. It's really a great overall statement on embracing new technologies for anyone who thinks they need to rely on copyright. On top of that, it again confirms the basic premise that we've stated here time and time again: for those who work to connect with their fans directly, there are plenty of ways to do well, even without specifically relying on copyright to do so.

We are facing a new era, so either we adapt or we die. However, I did not come here to share solutions, but my own experience as an author. Of course, I make a living out of my copyrights, but at this very moment I am not concentrating on this. I have to adapt myself. Not only by connecting more directly with my readers -- something unthinkable a few years ago -- but also by developing a new language, Internet-based, that will be the language of the future: direct, simple, without being superficial. Time will tell me how to recover the money I myself am investing alone in my social communities. But I am investing in something for which every single writer in the world would be grateful: to have his texts read by a maximum of people.

The Internet has taught me this: don't be afraid of sharing your ideas. Don't be afraid of engaging others to voice their ideas. And more importantly, don't presume who is and who is not a creator -- because we all are.

And the key point he makes? In the past, heretics were punished for sharing their ideas. These days, you'll be punished if you don't share your ideas.

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Putting Ideas And Inventions Into The Public Domain

from the an-idea-who's-time-has-come dept

A few months back, we wondered why it was so difficult to opt out of copyright. Soon after that, Creative Commons added its CC0 license, which gets you a long way towards putting your content in the public domain (there are a few issues related to it, but it's better than nothing). With patents, the issue isn't quite the same. With copyright, you're automatically given a copyright on creative works. Obviously, that's not the case with patents. However, people have wondered how they can put their invention in the public domain, such that (a) others can benefit from it and (b) it prevents others from patenting it at a later date. Tragically, the US Patent Office tends to look pretty narrowly at what counts as prior art and requires that the information be "published," (something that is also defined very narrowly) so simply declaring an invention to be in the public domain isn't always good enough to prevent others from making a claim on it.

I was thinking about the Slashdot post above for a bit, wondering if it was worth writing this post up, when someone else pointed out that some folks have now set up Public Domain Ideas, a wiki designed for just this purpose: to put your ideas into the public domain by publishing them in that wiki. There have been some efforts in the past to create a database of obviousness, but that's pretty difficult. The big problem with obvious ideas is that they're often so obvious, no one even thinks to put them down, until it's too late, and someone has patented an "invention" based on that idea. But the idea of a wiki for public domain ideas is much more interesting -- if people really do decide to make use of it -- and if the Patent Office recognizes it as a source of published inventions for prior art. In the meantime, if you've got some good ideas to share, why not check it out?

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Why Losers Litigate: It's Profitable!

from the sue-for-profitability dept

Economics is all about incentives -- and when you create incentives for bad activity, you can rest assured that you're going to get more bad activity. This has become especially troubling with respect to the belief that (a) ideas are more important than execution and (b) that you can "own" ideas. You cannot own ideas -- and even though, technically, intellectual property isn't supposed to let you own ideas, in many cases it's created either scenarios where that is what's happened -- or where enough people believe it's true that you can insist that ideas aren't ownable, but you'll still have a costly legal bill to pay.

So what does that have to do with incentives?

Well, we keep seeing scenarios where winners innovate, but losers litigate. That's because the market "losers" claim that they had the "idea" that allowed the winners to innovate and succeed in the market. But, of course, that overvalues the idea and greatly undervalues the actual execution. Anyone who's built a successful business recognizes that it's the process and execution that leads to success -- not the idea. But, with courts all too often rewarding the losers, it's simply too lucrative for marketplace losers not to sue.

In one such case, it seemed absolutely ridiculous that the founders of a competing social network, ConnectU that had briefly employed Mark Zuckerberg before he founded Facebook was suing him for "stealing" their idea. ConnectU had been a massive failure in the marketplace, while obviously Facebook has been much more successful. But, of course, the "idea" part was rather meaningless. There were already a bunch of similar social networks out there when both ConnectU and Facebook were getting started. Yet, rather than avoid a drawn out legal battle, Facebook eventually just agreed to settle -- though with the demands that the terms of the settlement remain confidential.

That worked... briefly. It turns out that the lawyers for ConnectU couldn't resist bragging, and accidentally advertised that they had won $65 million from Facebook. The number is not really accurate -- as the settlement was a mixture of cash and equity (whose value is really anybody's guess). However, it does show you why losers litigate so often. Imagine being handed millions for failing in the marketplace? Why wouldn't you litigate? But, if you believe in basic free market capitalism, you should recognize how this is rewarding exactly the wrong behavior. It punishes those who best served the market, and rewards those who couldn't serve the market.

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Italian Writer Claims She Owns The Rights To The Benjamin Button Story

from the someone-check-with-f.-scott-fitzgerald dept

Following the story of multiple authors all claiming credit for creating Hannah Montana, a few folks have sent in the news that an Italian writer claims that she actually wrote a story that was the basis for the hit movie, "The Curious Case of Benjamin Button." The woman claims she wrote and copyrighted (but never published) a short story in 1994. That should strike quite a few people as odd, as most people know that the movie is very loosely based on F. Scott Fitzgerald's short story that goes by the same name as the movie... which was published in 1921. You would think that if the filmmakers really wanted to make a movie based on this unknown Italian office-worker's story, it would have been a hell of a lot cheaper than paying for the rights to the Fitzgerald story. Again, though, like the Hannah Montana case, the basic conceit of the story (someone aging backwards) is hardly that original, and is an idea that lots of people have had over time. It seems pretty silly to claim ownership of it.

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The Dangerous Trend Of Thinking That Ideas Can Be Owned, Sold Or Stolen

from the locking-up-knowledge dept

An anonymous reader called our attention to a comment reposting some fantastic thinking on the dangerous trend of believing we can own, sell or steal ideas. The comment was in response to a post on Slashdot from a college student worried that his professors were "stealing" his ideas. The commenter posted a bit from The Zen of Graphics Programming, by Michael Abrash, who among other things co-wrote the game Quake. The whole blurb is worth reading, but there are two things worth calling out. First, he points out that the idea is rarely the important part:

This trend toward selling ideas is one symptom of an attitude that I've noticed more and more among programmers over the past few years-an attitude of which software patents are the most obvious manifestation-a desire to think something up without breaking a sweat, then let someone else's hard work make you money. Its an attitude that says, "I'm so smart that my ideas alone set me apart." Sorry, it doesn't work that way in the real world. Ideas are a dime a dozen in programming, too; I have a lifetime's worth of article and software ideas written neatly in a notebook, and I know several truly original thinkers who have far more yet. Folks, it's not the ideas; it's design, implementation, and especially hard work that make the difference.

Second, he points out how ridiculous a scenario it is when everyone "owns" the ideas they came up with, and what it would lead to:

A closely related point is the astonishing lack of gratitude some programmers show for the hard work and sense of community that went into building the knowledge base with which they work. How about this? Anyone who thinks they have a unique idea that they want to "own" and milk for money can do so-but first they have to track down and appropriately compensate all the people who made possible the compilers, algorithms, programming courses, books, hardware, and so forth that put them in a position to have their brainstorm.

Put that way, it sounds like a silly idea, but the idea behind software patents is precisely that eventually everyone will own parts of our communal knowledge base, and that programming will become in large part a process of properly identifylng and compensating each and every owner of the techniques you use. All I can say is that if we do go down that path, I guarantee that it will be a poorer profession for all of us - except the patent attorneys, I guess.

Exactly. The only unfortunate bit in the piece is that he then talks about an encounter with the author Neal Stephenson, where the two talked about the importance of sharing ideas and using networks to spread cheap or free tools to unleash the next creative genius. I'm a fan of Stephenson's work, and I'm sure that he at times talks up such things, but recently Stephenson has gone over to the other side, working part-time at Intellectual Ventures, one of the worst of the worst in terms of companies that are really trying to build a world where ideas are owned and limited. It's a shame that someone like Stephenson would get involved in such a project.

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OLPC Discovers Economic Reality; Cuts Staff

from the but-the-dream-is-closer... dept

We've certainly been somewhat harsh on Nicholas Negroponte's OLPC program in the past -- not because we don't like the idea of helping underprivileged kids building technology skills, but because of the way Negroponte has run the project from the beginning. He's acted as if he were the only one who should be working towards that goal and any competition was seen as a betrayal. Also, he took a very top down Negroponte-knows-best approach to building the laptop, which has led to significant problems within the team and with the product not living up to expectations -- showing once again that ideas are easy, it's the execution that's difficult, and if you limit the execution to just one company, you're cutting off a lot of the opportunity.

So, it shouldn't come as much of a surprise that OLPC is now cutting its workforce in half, and slashing salaries for remaining employees. Negroponte blames the economy, but that seems like an especially weak excuse, given just how strongly small, inexpensive mini-laptops (netbooks) are selling these days. Clearly, there's tremendous demand out there for super cheap, small laptops. The problem is that Negroponte decided from the beginning that his product was only for kids in developing countries, and left a massive market underserved (the rather weak give one, get one program was hardly serving the market).

But, again, the point is clear: the overall market is doing a rather amazing job serving the market. They're providing all sorts of very cheap mini laptops at price points even below what the OLPC is going for. No, most netbooks don't have some of the bells and whistles of the OLPC that help it survive a rough environment, but it seems rather likely that used netbooks and newer cheaper netbooks will find their way into developing countries soon enough as well -- just as second hand mobile phones have made it. So, in the end, Negroponte's original vision may get served, but it will get served by the market and competition, rather than his own grand master plan.

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Self Plagiarism And The Creative Process

from the but-is-it-infringement? dept

Last year, we had a post looking at the question of joke "stealing" and if it should be seen as infringement. Basically, there are tons of comics who are known for "stealing" the jokes of other comics, and there's even been some questions about trying to copyright jokes. The whole thing seems ridiculous, frankly. The power of a joke is rarely in the joke itself, but the delivery -- and you can't copyright that. Plus, there seem to be social measures in place to deal with "joke theft." Comics who are regularly caught doing it may have their reputations damaged, as was the case with Carlos Mencia last year.

But there's even more to it than that. In an interesting post on his blog, Scott Adams writes about how he (not for the first time) was caught drawing a nearly identical Dilbert comic strip to one he had done in the past. He delves a bit into his creative process to explain how it works, noting that there are a ton of ideas flowing through his head at once and he just has to reach out and grab from that mass of ideas:

For me, ideas stream through my head at a frantic pace. I feel like a bear trying to grab a salmon. If my paw misses its target, that salmon is gone for good. I don't dwell on it. I just lunge for the next salmon. I think people who have fewer thoughts per hour have time to let them settle in and form memories. It's just a theory.

That's likely true for many creative folks, including stand-up comics. As such, the ideas that you have in your head, and the ones that you hear and see from others end up getting mixed up in that mass of "idea salmon." As such, it shouldn't be surprising or scandalous or bad when someone ends up coming up with a similar (or even almost identical) joke or idea to someone else. It's just part of the creative process at work. It's not "stealing" and it's not "infringement." It's just a recognition of the creative process that involves a large number of ideas flowing around that a content creator tries to bring together in some sort of useful or interesting manner.

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Will Nicholas Negroponte Ever Understand That Competition Isn't About Killing OLPC?

from the get-over-it dept

We've never quite understood Nicholas Negroponte's position when it comes to the $100 Laptop/OLPC/XO (whatever it's called these days). While the idea behind creating a super cheap, super durable useful computer for children in developing nations is good, Negroponte has always approached the idea as one where only he should be allowed to see that vision through. When other companies decided it might be a good idea and wanted to target that market themselves, Negroponte flipped out and started attacking them for trying to undermine his project.

Sorry, Nicholas, but competition isn't undermining.

In fact, competition is generally what drives all parties to be better at what they do, in order to fend off the competition. Yet, somehow, the UK's Times Online has bought into Negroponte's side of the story and written up an article bashing Microsoft and Intel for trying to "kill" the OLPC. The article is riddled with factual errors and opinion substituting as fact, but the worst is in the central point of the article. The author mistakes companies all aiming for the same market as a nefarious attempt to "kill off" Negroponte's pet project -- as if he has some universal right to the market that no one else can attempt to enter. It also brushes over some simple facts, like the one where many countries have looked at the OLPC and realized it doesn't really serve their needs just yet. That, if anything, should be even more reason why competition is necessary. It helps create better products that actually serve the needs of people in those markets, rather than just what Negroponte decides they must want in his top-down manner.

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OLPC Learning That Ideas Are Easy, Execution Is Hard

from the competition dept

Business Week has an in-depth write-up about the One Laptop Per Child project's first deployments in developing countries. The original plan called for building 150 million laptops by the end of 2008; it now looks like they'll be lucky to ship a million before the end of the year. It appears that a big part of the problem is that Nicholas Negroponte and his team underestimated the support requirements for the laptops. Getting laptops into the hands of poor children is good, but it's a lot better if the laptops come with training for teachers and support personnel on how to use them effectively. OLPC may have hoped to build a laptop that was so easy to use that little support was required, but the countries writing the checks don't appear to have bought the argument. Nigeria, for example, backed out of a previous commitment to buy a million laptops from OLPC, opting for Intel's Classmate PC instead. Intel's superior support was cited as the major reason for the decision.

This highlights what was so ridiculous about Negroponte's demand that other companies stop offering competing low-cost laptops. Negroponte deserves credit for pioneering the concept of producing cheap laptops for poor children, but coming up with the idea is, relatively speaking, the easy part. What's far more difficult is the execution. Technical wizardry is an important part of that, to be sure, but probably even more important are the logistical details: keeping the project on time and under budget and ensuring that the shipping project has adequate support. There are a million ways for things to go wrong, which is why it's a good to have a bunch of different organizations working on the problem in parallel. By his own admission, Negroponte is more a visionary than a strong manager, which is precisely why he should have welcomed the entry of a company with Intel's logistical prowess into the market. It may not be as personally satisfying for him to have a for-profit company finish the job he started, but if the goal is to help poor children, then he should be happy to see them being offered more options.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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ConnectU Wants Out Of Its Settlement With Facebook; Wants To Sue Again

from the oh-come-on dept

Earlier this year, we were disappointed to see Facebook agree to settle with ConnectU. ConnectU was another wannabe social network that Mark Zuckerberg worked for briefly before going off to found Facebook. The brothers behind ConnectU were unsuccessful in doing much with ConnectU, but it wasn't because Zuckerberg "stole their idea." It was because he executed much better. The "idea" itself was hardly novel at the time, as there were already a number of social networks out there. While it may have made economic sense in the short term for Facebook to settle with ConnectU (just to get the lawsuit hassle out of the way), that sort of settlement leads to more people claiming credit for something they have no real rights over.

Yet, if you thought the case was now over, you'd be wrong. Apparently the brothers behind ConnectU suddenly claim that they've come up with a "smoking gun" and they want to cancel the settlement and get back to the lawsuit. This is clearly a pure moneygrab at this point. Even if the brothers could prove that every bit of Facebook is based on code that Zuckerberg directly copied from ConnectU, it wouldn't change the reality of the situation -- which was that Zuckerberg created a service people wanted to use, and the ConnectU guys did not. They're basically demanding money to pay for their own failure to execute well. In this society, we want to reward the winners in the marketplace, not the losers.

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When Ideas Are Easy And Execution Is Hard... It Makes Sense To Share Your Ideas

from the be-open,-be-good dept

We've been hitting on the theme that ideas are easy, while execution is hard for a while now -- and a friend pointed me to a worthwhile blog post by Brad Burnham, an experienced venture capitalist, now a partner with Union Square Ventures. Burnham muses that the successful entrepreneurs he's backed tended to be the ones who were the most open about their ideas, not just with him, but with everyone. What it really comes back to is this idea that ideas are easy and execution is difficult. The entrepreneur who is living and breathing the idea (and has probably already tested out a bunch of different related ideas) is likely to gain a lot more from the conversation with an outsider (even a potential competitor) than that other person is going to gain from talking to the entrepreneur. While there is an old-school mentality that you need to keep things secret, history has shown that that tends not to be the best way to grow a successful business. When you do that, you end up making all sorts of mistakes that a few conversations may have helped you avoid.

An interesting parallel to this debate is the discussion we had last year about noncompetes. What the research there has shown is that a big part of the reason for Silicon Valley's success is the fact that noncompete agreements are unenforceable in California. What happened, then, was much more job-hopping, and a much faster dispersion not just of ideas, but of problem solving and innovation across the industry. In AnnaLee Saxenian's book that kicked off this debate, she noted that Silicon Valley culture was such that many engineers here spent plenty of time discussing their biggest challenges with direct competitors, just to get better ideas -- believing that solving the big problems would work out better in the end for everyone, and that holding back ideas didn't solve anything. Amusingly, in that case, Burnham's partner at Union Square Ventures, Fred Wilson, took the other side: favoring noncompetes (though, I get the feeling Wilson's changing his mind as the evidence has been presented).

This also, by the way, goes completely against the theory (chiefly propagated by supporters of a stronger patent system) that without patents, the world would devolve into an innovation-free zone where trade secrecy ruled. That seems unlikely to happen, based on exactly what Burnham and others have noticed. Keeping an idea secret not only is unlikely to be effective, it can often stifle the necessary development. Thus, it will be the companies that are more open and free with their ideas that dominate the market. The key reason why, of course, goes back to what we talked about at the beginning. Ideas are certainly important, but it's execution that's the key to success -- and being more free in sharing your ideas will often help you execute better.

Burnham also asks about whether or not it's possible to "model" this openness -- and I think it is. In fact, in many ways it matches the infinite goods economic model we've been discussing, with the ideas representing the infinite goods, and the execution being the main scarcity. So, in the same way that freeing up music helps expand the opportunities for every other area of the music business, opening up your idea is likely to open up many huge new opportunities for the entrepreneur in how to execute successfully. If you really want to model it mathematically, you could probably build something based on the economic models that made Paul Romer famous (and should eventually net him a Nobel prize), but that might be overkill for what Burnham is looking for. However, if you're familiar with Romer's work, applying it to this scenario should make you see how much more powerful sharing ideas can be vs. keeping them secret. It's not just a small edge -- it can be a huge difference. I've been working on a few simpler models myself that I'm hoping to share (openly and freely!) soon enough, in the hopes that others can improve on them.

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Myhrvold's Myth: Invention Capital

from the cute-phrase,-dumb-idea dept

Nathan Myhrvold may have a way with words, but it doesn't mean that what he's doing with Intellectual Ventures makes any sense. At the D: conference yesterday, Myrhvold tried to position his company as being in the "invention capital" business, talking about how he's creating a model to fund inventions, and even comparing himself to Thomas Edison (while dancing around several questions that tried to get him to point out what the company has actually done other than hoard patents). This is a modification on the easily debunked claim he made a couple weeks ago about how owning a patent and not using it to build a product was the same as investing in a company and not working there.

But, the real problem goes right back to the core issue that was brought out in Malcolm Gladwell's profile of Myhrvold. Ideas are popping up everywhere. It's the execution that matters. Lots of folks are having similar ideas at about the same time, but those ideas are meaningless without the corresponding execution (at which point many people often realize the original idea wasn't that interesting in the first place). So, with ideas being plentiful and execution being scarce, it doesn't make sense to "invest" in ideas separate from the execution. The only way that it would make sense is if you then were taking those ideas and artificially trying to limit their usefulness -- which is exactly what Myhrvold is doing with IV. He's artificially trying to limit the use of ideas, and make it more expensive for anyone to execute on those ideas. The very concept of what he's doing is to hold back innovation and progress. That's the exact opposite of what the patent system was intended to do.

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Ideas Are Easy... Execution Is Difficult

from the so-why-do-we-protect-the-ideas? dept

It's an ongoing theme around here, but ideas are everywhere. The real trick to making something great often has extremely little to do with the idea, and much more to do with the execution. That's where the real innovation occurs -- in taking an idea and trying to figure out how to make it useful. It's that process that's important, much more than the original idea. As nearly anyone who has brought a product from conception to market will tell you, what eventually succeeds in the market is almost always radically different than the original "idea." That's part of the reason why patents are so often harmful to innovation. The patent is for that core idea, which is rarely the key in making something successful. But by limiting who can innovate off of the idea (or just by making it much more expensive) you're limiting that process of innovation.

Some people disagree with this, but the failure of Cambrian House, once again seems to demonstrate the vast gap between ideas and execution. Cambrian House was a well-hyped company that tried to "crowdsource" new companies and products. I've paid attention to them for a while, since their business model had some similarities to what we do with the Techdirt Insight Community. However, as the founder of Cambrian House admitted in explaining the company's changing plans, it wasn't difficult to get people to come up with all sorts of interesting and exciting ideas -- but where the company failed was in getting anyone to actually execute on any of those ideas. Ideas are a starting point -- but it's high time that we stopped worshipping the idea, and started recognizing how much more important execution is in driving innovation.

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Ideas Are Everywhere... So Why Do We Limit Them?

from the gladwell-missing-the-point dept

Malcolm Gladwell is a truly fantastic writer. However, sometimes he gets so interested in making a story sound good that he misses the real point. His latest piece for the New Yorker starts out as a puff piece on Nathan Myhrvold's Intellectual Ventures (which gets way too many puff pieces), but then turns into a much more interesting article about how just about every major invention or scientific or mathematical discovery came from multiple, entirely independent people at almost exactly the same time. As Gladwell points out -- rarely is it about "genius," but about the fact that all of the previous work in the field naturally leads to this end result -- and if it wasn't one person discovering it, someone else would. The article lists out big name invention after invention that all have "multiples" -- multiple entirely independent individuals who came up with the same thing at the same time. Not only that, but almost always the person who gets credit for the discovery isn't actually the person who discovered it. In fact, someone even coined a term for it: Stigler's Law: "No scientific discovery is named after its original discoverer."

Gladwell uses this to talk up what Myhrvold is doing, suggesting that Intellectual Ventures is really about continuing that process, getting those ideas out there -- but he misses the much bigger point: if these ideas are the natural progression, almost guaranteed to be discovered by someone sooner or later, why do we give a monopoly on these ideas to a single discoverer? Myhrvold's whole business model is about monopolizing all of these ideas and charging others (who may have discovered them totally independently) to actually do something with them. Yet, if Gladwell's premise is correct (and there's plenty of evidence included in the article), then Myhrvold's efforts shouldn't be seen as a big deal. After all, if it wasn't Myhrvold and his friends doing it, others would very likely come up with the same thing sooner or later.

This is especially highlighted in one anecdote in the article, of Myhrvold holding a dinner with a bunch of smart people... and an attorney. The group spent dinner talking about a bunch of different random ideas, with no real goal or purpose -- just "chewing the rag" as one participant put it. But the next day the attorney approached them with a typewritten description of 36 different inventions that were potentially patentable out of the dinner. When a random "chewing the rag" conversation turns up 36 monopolies, something is wrong. Those aren't inventions that deserve a monopoly.

What Gladwell misses (though others have discussed it in detail) is that while ideas may be a dime a dozen, executing on those ideas is what's difficult. Innovation isn't idea generation. Innovation is taking an idea and making it do something useful. Yet, in giving monopoly rights to Myhrvold and his friends, we make it much more difficult for others (even those who discovered the same things totally independently) to help actually make them useful.

In the end, the Gladwell article inadvertently makes the best case against Myhrvold's Intellectual Ventures, while hyping up the company at the same time. It's a strange disconnect, and it's too bad that Gladwell, like so many others, fell so under Myhrvold's spell, that he missed the real story he held in his hands.

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