A few folks have sent in variations on the news that Apple and AT&T have been sued for patent infringement over the fact that the music recognition service Shazam can be used on the iPhone. The patent in question covers a music recognition system that certainly does sound like Shazam's. While it's lame that the patent holder is going after third parties like Apple and AT&T, this lawsuit really highlights how silly the patent system is. Shazam has been around for ages. I remember meeting up with some folks from Shazam many, many years ago, soon after they had started. They had a music recognition system at the time, but it didn't work all that great, and there was no real market for it. So they spent many years continually tinkering with and improving the system, and adapting to the market as it changed -- and finally had a hit when the iPhone app store came out. That is the process of innovation. The idea was a useful starting point, but it was meaningless until the idea could be implemented in a way that the market wanted. And, yet, some guy who had the same idea, but didn't go through the trials and tribulations of actually making it work for the market, suddenly gets to demand tons of money for it? That's an economic and societal waste.

Reader David Kopp writes in to point us to a story in the Boston Globe that yet again highlights the difference between innovation and invention -- this time in the virtual musician video game space. While we've already seen that Konami has sued over the video game Rock Band, claiming that it had patented the concept of virtual musician games, the Globe story highlights a Massachusetts startup that appears to have come up with a similar idea much earlier. The game was slightly different, but had many of the same elements -- including a virtual guitar (that had actual strings in this case) and involved playing along with music on the screen. The band Aerosmith played a big part in the game, predating all the bands suddenly jumping on the Guitar Hero and Rock Band bandwagons of today.

The game was moderately successful, but was clearly ahead of its time in a variety of ways. The game was way too expensive, first of all, as the virtual guitar added an extra $100 to the $50 game price. The company also had trouble figuring out how to properly market the game, especially with the extra guitar. Also, since it was a PC game, it was less convenient than today's console games, which are mostly played around a big television. These were all issues that were later worked out, but not in time for the folks at Virtual Music Entertainment, who had already sold out for a decent, but not enormous, payout in 2000. Still, it's nice to see they're not bitter or threatening to sue:

"Whether they stole it or not, it was a good idea. They were at the right place at the right time, and they executed it really well."

And that's exactly the point. Executing and getting it right is difficult, but that's what the market is designed to reward, and that's what really drives innovation.

Business Week's Steve Hamm has a short post talking about the "sudden" success of "netbooks," those mini-laptops that are suddenly selling like crazy. As he notes, smaller laptops are not a new idea, and have been tried for many years in varying formats without much success. But, for some reason, after so many different experiments, it seems that the sweet spot in terms of size, usability and price have all been found.

This actually highlights something quite common in technology innovation: the difference between the idea, the invention and the actual innovation. Just the idea alone wasn't enough to actually make the product valuable. Finding that real sweetspot is a challenge for just about any product, and it involves an awful lot of experimentation to make it work. I've been reading about the early days of a number of inventions lately, and you see this story over and over again, where the initial versions really have no market, and it's a later, totally minor tweak that suddenly makes it valuable. And, of course, the best way to get that tweak to happen quickly (and thus expand a market, and improve the overall economy) is to let a lot of different players experiment to throw a lot of ideas at the market to see what actually does hit that sweet spot. Tragically, with a patent system that grants monopoly protection at the invention stage, this is often a lot more difficult, slowing down the attempts to actually hit that sweetspot.

Two and a half years ago, we wrote about the claims of Kane Kramer, a guy who claimed to have invented the iPod thirty years ago, and was talking to lawyers to see if he had a case against Apple. As we explained at the time, Kramer did not invent the iPod at all. He created a very early digital music player, that had much less functionality that couldn't store more than a few minutes of music, which never got anywhere in the marketplace, and for which all of his patents had long expired. To say that he had invented the iPod would be like saying that the first guy who threw a block of ice in a box "invented" the air conditioner.

Yet, here we go again, as the DailyMail in the UK is claiming that Apple has admitted that this guy did, in fact, invent the iPod. However, again, that's not true at all. What happened was that Apple had him provide some evidence in its dispute with Burst.com (which was eventually settled). Basically, what Apple was doing wasn't admitting that Kramer "invented the iPod" but was showing that there was plenty of prior art (including Kramers) that predated Burst's highly questionable patents.

That doesn't mean that Kramer invented the iPod. It just means that his work predated Burst's claim of a monopoly on some specific technology that it claimed Apple infringed. That's a long way from "inventing the iPod." Besides, there were plenty of digital music players prior to the iPod. In fact, the real revolution around the iPod wasn't the fact that it was a digital player, but that it was the first digital player that had significant storage and could carry large collections of music at once -- something that Kramer's player never could do. So, please, can we stop repeating this myth that he somehow invented the iPod. He didn't.

For years, plenty of people have pointed out the difference between innovation and invention, with a popular quote (attributed to way too many different people over the years) being that "invention is turning money into ideas; innovation is turning ideas into money." Basically, invention is coming up with a new idea -- innovation is successfully bringing a product to market in a way that people want. Where some people disagree is how important each of these stages are. Our position has been that innovation is a lot more important than invention. Successfully bringing a product to market is what makes the world a better place -- because it satisfies needs in the market and expands the economy. There were music players before the iPod, but Apple innovated the iPod into more of a "must have" device. There were cars before Ford, but he innovated to make it affordable for the average person. This is one of the reasons why we have such trouble with the patent system as it's currently designed. It rewards invention, but makes innovation more difficult and expensive.

A new study supports this point by showing that in most companies executives are a lot more worried about innovation than invention, saying that they're overwhelmed with ideas. It's successfully executing and putting those ideas into practice in a way that makes money that's so difficult. The study found only 17% of companies where execs were worried about not having the necessary ideas. Instead, most companies were greatly worried with taking those ideas and actually being able to bring them to market successfully. So once again, we're seeing that it's innovation that's the bigger challenge than invention. In fact, it seems that many companies feel that there are too many ideas going around -- and the real challenge is in executing and bringing those ideas successfully to market. So, why is it that our public policy is focused on just the invention process (of which there appears to be too much) while making it more expensive and difficult to execute and bring products to market (which is the real challenge companies are facing)?