You Can't Introduce Any Decently Cool Product These Days Without Some Sore Loser Claiming Patent Infringement

Patents

from the nokia-edition dept

Google has been getting some buzz for the announcement of the Nexus 7 tablet device, built by Asus. At the Google I/O developer conference, they gave out the device to all attendees. As a press attendee I received a loaner version which I have to return, but in playing around with it for a few days, it seems like a well-designed device and I’m thinking of buying one when they’re officially available. But, of course, as with pretty much anything cool or useful these days, some sore loser has to whine about how it’s infringing on their patents. This time, it’s Nokia bitching about how neither Asus nor Google have licensed its patent portfolio.

Here’s the thing: if Nokia invented a device like this, then sell the damn device. If it’s better than the Nexus 7 then it will sell better than the Nexus 7. Whining about patent infringement when you can’t compete just makes you look like a sore loser. If what Nokia “invented” and patented was so important, bring the product to market and let the market decide. Bitching about how someone made a better product than you and demanding that they pay you money is just pure sour grapes. It may be legal, based on the idiocy of today’s patent system, but it sure makes it clear to me why I’d never buy another Nokia product.

Filed Under: competition, nexus 7, tablet
Companies: asus, google, nokia

Chinese Companies Again Using Patents To Punish Foreign Competitors: Apple Sued Over Siri In Shanghai

Patents

from the had-to-expect-this dept

For many years, US companies and government officials complained publicly and privately that China just didn’t “respect” patents. They would point to how various Chinese companies were famous for making knockoffs of various products as evidence of this, and they’d put strong diplomatic pressure on China to both “respect” foreign patents more and beef up its own patent system. Of course, for years, we’ve been warning about just how stupid this is. China recognizes that patents are really a protectionist tool, and is using them as such. It has certainly increased its patenting effort… but nearly every single major patent lawsuit in China has been about punishing foreign companies and blocking competition to domestic Chinese companies.

So it should come as little surprise to find out that a company in Shanghai, Zhi Zhen Internet Technology, is now suing Apple, claiming that voice-controlled virtual assistant Siri violates its patents. No one seems to know specifically what’s in the patent, but I do wonder if it matters. Like so many Chinese patent lawsuits this one just seems likely to end up with a foreign competitor being kept out of the market in favor of the domestic version.

And yet… American companies and politicians will still continue to insist that China needs to “strengthen” its patent system, even as Chinese companies and politicians must be laughing at just how self-defeating the Americans are. We’re literally urging them to set up a system that helps Chinese companies block American companies from their market.

Filed Under: china, knockoffs, shanghai
Companies: apple, zhi zhen internet technology

How Not To Innovate: Trying To Create An Exact Replica Of Another Service

Innovation

from the gotta-go-beyond-that dept

We’ve talked in the past about the importance of copying what other companies do as a business strategy (and just how common it is throughout history, despite the pejorative terms associated with it). But one of the key factors in making “copying” a successful strategy is in knowing how to improve upon what you copy. It’s why Apple has been so successful over the years. Yes, it builds on the ideas of others, but does so in a way that improves them and makes them more usable.

Yet, we always hear of people fearing companies copying one another (sometimes mistakenly calling them “thieves” or decrying their unoriginality). And yet, it seems pointless to worry about such things. Even as people always seem to be afraid of big companies with big budgets copying others, history has shown time and time again that this almost never works. That’s because merely copying what someone is doing not only takes you “where the puck has been” rather than “where the puck is going,” but also has you focused solely on the outward, superficial aspects of what makes another product or service successful. What’s missing is an awful lot of details in the background — the knowledge of why certain things work and don’t work, as well as how users and customers actually interact with the product. Such copying almost inevitably fails.

With that said, it seems like Samsung’s plan to make its own Facebook, using the rather telling code name “Samsung Facebook” seems destined to fail for exactly that reason. The very fact that they’re internally calling it “Samsung Facebook” shows that they’re already aiming at a target in the past, rather than the future. It’s the exact wrong approach and almost guarantees that whatever comes out of it will be seen as pointless by the time it launches. Learning from what others do is a useful strategy. Copying what others do can be a very important business strategy — but it has to be done with the goal of exceeding where those others are heading, not in replicating what they’ve already done. That’s a recipe for expensive failures.

Filed Under: copying, innovation
Companies: facebook, samsung

New Study Shows Patent Laws Spur Patents; Report's Authors Pretend This Means Innovation

Studies

from the they're-not-the-same dept

Slashdot points us to an article about a new research report, commissioned by a biotech trade group that argues the evidence shows that patents spur innovation, rather than hinder it. However, as some quickly noticed, the report has severe methodological flaws, starting with the fact that it seems to use patent activity as a proxy for innovation. So, it argues that stronger patent law creates more patents (or more funding of patents or more sales/licensing of patents) — and then claims that clearly there’s more innovation. But we already knew that patent laws spur patents. The question — not answered in the report — is about the actual impact on innovation.

Just as an example, the report provides some case studies from different countries. In one of them, it talks about how Taiwan basically took the US’ Bayh-Dole Act, which encourages the locking up of university research… and shows there was much more patenting afterwards. The report discusses how “impressive” this is:

A 2010 study of the effects of this legislation on university patenting activity provides a concrete and detailed example of the positive effect the introduction of technology transfer mechanisms can have. The study examines patents granted to 174 Taiwanese universities during the period of 2004 to 2009 and compares this to the period preceding it. Strikingly, the study finds a sharp and sustained increase in university’s patenting activity: patenting increased from 446 patents in 2004 to 1,581 by 2009. This is an impressive increase of 354%. As importantly, apart from a slight drop in 2007, this growth has been progressive and sustained year after year.

Yup. So patent laws that expand the coverage of what’s patentable and provide incentives for more patents… increase the number patents. What does that say about innovation? Abso-freaking-lutely nothing. And, in fact, if you look at the actual research on the impact of Bayh-Dole in the US, while it similarly increased patent activity, it didn’t increase research, and actually held it back. This is because university research is meant to be shared and meant to be discussed and to have others work on it. That’s how great research is done: with lots of sharing of information and ideas to spark new thinking. But the Bayh-Dole Act basically told researchers to shut up, keep things secret, and patent the results. Because of that there are a lot more patents, but a lot fewer real breakthroughs, because you no longer have the same information sharing, discussion and openness that created true innovation in the past.

Filed Under: bayh-dole act, licensing, patents, taiwan

Every Successful New Technology Has Created Panic From Those It Disrupts

Innovation

from the well-said dept

Jeffrey Tucker has an all around fantastic essay on capitalists who fear change — discussing how companies and industries in an otherwise capitalist/free market society freak out when they face competition from disruptive innovation. They go to amazing lengths to claim that it’s not real competition or innovation they face, but something that must be illegal, immoral, unethical or the death of all things good and holy. The technopanics set in with alarming frequency, and in the end, they are always wrong. The end result ends up being bigger and better than ever before, even if some of those legacy players don’t make it through. Tucker tells the story wonderfully:

Through our long history of improvement, every upgrade and every shift from old to new inspired panic. The biggest panic typically comes from the producers themselves who resent the way the market process destabilizes their business model.

It was said that the radio would end live performance. No one would learn music anymore. Everything would be performed one time, and recorded for all time, and that would be the end.

Of course that didn’t happen. Then there was another panic when records came out, on the belief that this would destroy radio. Then tapes were next and everyone predicted doom for recorded music since music could be so easily duplicated (“Home Taping is Killing Music”). It was the same with digital music: surely this would be the death of all music!

And think back to the mass ownership of books in the 19th century. Many people predicted that these would destroy new authors because people would just buy books by old authors that were cheap and affordable. New authors would starve and no one would write anymore.

There is a pattern here. Every new technology that becomes profitable causes people to scream about the plight of existing producers. Then it turns out over time that the sector itself thrives as never before but in ways that no one really expected.

Tucker includes other examples, but then explains the reality of innovation and profits. Profits are a temporary thing: because copycats do come along. But that’s a good thing, because it forces greater innovation, as others seek to collect profits. You profit by being unique and different, and you encourage that to continue by letting others copy. That leads to more incentives to keep innovating and keeping make the world a better place. But, of course, that’s hard, and companies want to keep their profits. So they move away from free market capitalism, towards crony capitalism:

This is why business is always running to government for protection. Kill this crazy new technology! Stop these imports! Raise the costs on the competition! Give us a patent so that we can clobber the other guys! Impose antitrust law! Protect me with a copyright! Regulate the newcomers out of existence! Give us a bailout!

And, of course, the public often accepts the moral panic story. Hell, I’d bet that even the companies making those claims — completely out of self-interest — believe the horrible things they’re predicting from these new technologies. Jack Valenti was being sincere when he thought the VCR would destroy Hollywood. He was wrong. They’re always wrong.

Here is a striking fact about the human mind: we have great difficulty imagining solutions that have yet to present themselves. It doesn’t matter how often the market resolves seemingly intractable problems, we still can’t become accustomed to this reality. Our minds think in terms of existing conditions, and then we predict all kinds of doom. We too often fail to consistently expect the unexpected.

This poses a serious problem for the market economy, which is all about the ability of the system to inspire discovery of new ideas and new solutions to prevailing the problems. The problems posed by change are obvious enough; but the solutions are “crowd sourced” and emerge from places, people, and institutions that cannot be seen in advance.

Capitalism is not for wimps who don’t want to improve. If you want guaranteed profits for the few rather than prosperity and abundance for the many, socialism and fascism really are better systems.

The full piece is absolutely worth reading.

Filed Under: capitalism, competition, disruption, monopolies, technology

EFF Launches 'Defend Innovation' Site In An Attempt To Fix Software Patents

Patents

from the will-it-work? dept

The folks over at EFF have launched a new site called DefendInnovation.org that seeks to get people to speak up about fixing the patent system, specifically around software patents. It puts forth a series of key suggestions:

1. A patent covering software should be shorter: no more than five years from the application date.
2. If the patent is invalid or there’s no infringement, the trolls should have to pay the legal fees.
3. Patent applicants should be required to provide an example of running software code for each claim in the patent.
4. Infringers should avoid liability if they independently arrive at the patented invention.
5. Patents and licenses should be public right away. Patent owners should be required to keep their public records up-to-date.
6. The law should limit damages so that a patent owner can’t collect millions if the patent represented only a tiny fraction of a defendant’s product.
7. Congress should commission a study and hold hearings to examine whether software patents actually benefit our economy at all.

To me, number four is the key one and would fix a large number of issues with the patent system. I’ve been arguing for an independent invention defense for years. In fact, I’d take it slightly further. Since patents are only supposed to be granted on ideas that are non-obvious to those who are skilled in the art, the fact that there is independent invention suggests evidence that it is obvious to those skilled in the art, because multiple “skilled in the art” practitioners are arriving at the same obvious conclusion. Thus, such patents should be invalid, beyond just allowing the independent inventor a defense.

Some don’t think the EFF is going far enough. Tim Lee put together a petition, asking the EFF to go even further and oppose software patents altogether. You could argue that point number seven gets towards that. In fact, you could argue that point number seven should be the whole ballgame here. The fact that we don’t have any evidence that software patents benefit the economy should make the whole system a mockery. Either way, the EFF’s response to the whole “abolish software patents” issue, is that there needs to be a first step:

Regardless of whether you think software patents should be abolished altogether or just reformed, the first step is recognizing that a one-size-fits-all patents system doesn’t make sense and that we need to treat software patents differently from other types of patents. Without that, no effort – whether reform or abolition – can be successful.

To be honest, as bad as software patents can be, I still do worry about hardware patents as well. So I don’t think we should lose sight of the independent invention defense (or independent invention as evidence of obviousness) as a useful tool to fix many of the larger problems with the system. There are some other potential fixes out there as well, including something akin to an anti-SLAPP law for patents — where it’s clear that the lawsuit is an abuse of the patent system, just to try to get a company actually producing a product to pay. A big part of the problem today is how expensive a patent lawsuit is, and how difficult it is to get one dismissed without first having to spend upwards of a million dollars (no joke). That leads many companies to settle. This is, obviously, what point number 2 in the Defend Innovation campaign is about, but getting faster, anti-SLAPP-like dismissals would be a big help as well, as no company wants a big expensive lawsuit hanging over them.

Either way, it’s good to see renewed emphasis on the problems of the patent system, especially after Congress and President Obama pretended that they’d “fixed” everything last summer with the patent reform bill that did very little (and probably made some things worse).

Filed Under: defend innovation, eff, software patents

The Chilling Effects On Innovation Caused By Bad Copyright Law

Studies

from the it's-feeling-frosty-in-here dept

We’ve talked a few times about how attacks on new innovations in the name of protecting copyright can create massive chilling effects. For example, the increasingly questionable arguments against Megaupload have created a real chill for online cloud storage providers. That was likely manifest last week in the news that Dropbox was killing off its “public folders” feature in deference to its link feature, basically making the product less useful.

Matt Schruers, from CCIA has an interesting blog post up which ties actions like those done by Dropbox here with a new study showing how the chilling effects of bad copyright law can impact innovation. The full study (pdf) is actually something of a follow up to an earlier study we wrote about, which showed how good judicial rulings on copyright which allowed for greater innovation (such as the Cablevision ruling, which allowed cloud-based DVRs to exist) contributed directly to greater funding of innovation.

This new study, also by Harvard professor Josh Lerner, highlights the unfortunate opposite impact: the chilling effects on investment in innovation that comes as a result of anti-innovation judicial rulings. In this case, Lerner looked at specific rulings in the EU:

We analyze the effects of a court ruling in France and several court rulings in Germany on VC investment in cloud computing firms in these countries. These court rulings were seen as negatively affecting the development of cloud computing, and our findings confirm this view by showing that these rulings regarding the scope of copyrights had significant, negative impacts on investment. Specifically, we find that VC investment in cloud computing firms declined in Germany and France, relative to the rest of the EU, after the French and German rulings. Our results suggest that these rulings led to an average reduction in VC investment in French and German cloud computing firms of $4.6 and $2.8 million per quarter, respectively. This implies a total decrease in French and German VC investment of $87 million over an approximately three year period. When paired with the findings of the enhanced effects of VC investment relative to corporate investment, this may be the equivalent of $269.7 million in traditional R&D investment.

Combine these two studies and you can see how these chilling effects can be quite massive in terms of investment in innovation. Of course, investment alone is not the sole determinant of the pace or success of innovation, but it is a key factor. And scaring investors away from innovations can have a major impact on the public and the economy.

Filed Under: chilling effects, european union, investment
Companies: cablevision, dropbox