Patents for Entrepreneurs – Crown Jewels or Shiny Objects? -- MITEF-NYC Panel NYC 11/19

“If you don’t have a patent, you don’t have a prayer on Shark Tank,” as John Oliver began his diatribe on the problems with patents.  Black humor with questionable substance, but never has there been such widespread and deep confusion about patents, from the man on the street, to the press, the courts, Congress, the Supreme Court, and President Obama.  Joking aside, how should entrepreneurs view patents?

That is the subject of this MIT Enterprise Forum of NYC panel session on 11/19 that I am co-organizing:  Patents for Entrepreneurs – Crown Jewels or Shiny Objects?

We assemble a panel of entrepreneurs who have successfully navigated these issues and shepherded companies through the life-cycle of seeking and using patents -- working with investors and licensees.  We bolster that with patent lawyers who can update us on the fundamental legal turmoil that bears on this.

This is not Patents 101 -- it is aimed at a strategic perspective for entrepreneurs and those investing in their companies.

The John Oliver bit is very funny, but does a disservice to the real issues of why the patent system is valuable. For a perspective on the harder reality, check out this post on a respected IP blog, A toxic concoction of myth, media and money is killing the patent system.

But this is also not a debate on IP policy -- the focus will be on understanding the current landscape, directions, and uncertainties for good or bad, to address the strategic questions of whether and how young companies should seek patents.

(My personal view is that while there should be an important place for patents, those trying to fix the system have broken it so badly that the value of patents for many kinds of innovation is now highly doubtful -- at least until the pendulum swings back a bit. I did well as an inventor with patents in the past, but am no longer spending much time on that now.)

A New Age in Patent Liquidity -- NYC 2/15 -- MIT Enterprise Forum Panel Session

This is a panel that should be very relevant to all entrepreneurs who have an interest in getting and monetizing patents, as well as those who work with them. "A New Age in Patent Liquidity: New Opportunities for Entrepreneurs," is presented by MIT Enterprise Forum of NYC.

I will be on the panel to present the perspective of an entrepreneur/inventor who has successfully navigated the Kafkaesque world of patents, which can be rewarding, but also hugely frustrating, costly, and risky.  I described some of the twists and turns of my adventures in a 2008 blog post "'The Six Phases of a Technology Flop' ...Patents, and Plan B." The theme was how I started seeking to build a software/services business, but also sought patents as a hedge to protect my investment -- a "Plan B." When the business failed to keep up with better-connected competitors with deeper pockets, I turned to the patents to try to capture value for my innovations.  Working with partners who brought the expertise and funding needed to do that, and eventually to undertake a patent suit, I went part way through infringement cases against Microsoft and Apple.  Some additional background on that is in last year's post that tells how Intellectual Ventures changed the game with a very creative, win-win deal.

I also expect to touch on my 2008 sale of another portfolio of patents to another very innovative company, RPX, as well as my ongoing work developing other patents.  I am pleased that Kevin Barhydt, VP, Head of Acquisitions for RPX (and formerly at IV) will also be on the panel.

From my perspective, IV, RPX, and others are making a real difference is offering inventors and other patent owners a way to monetize their IP for reasonable compensation -- in a market that is rational, and has a middle ground between "take a hike" and the nuclear option of litigation, with its huge costs in money, time, and disruption.

It is a pleasure to be a panelist and organizer for this event, especially given that I was the moderator and an organizer of MITEF's well-received 2000 panel session  "Patents for Dot-coms," which had an equally distinguished panel.

The Necessity of Steve Jobs: ...Inventor? ...or Necessitor?

The recent comparisons of Steve Jobs to Edison and Ford brought me back to an important point: Invention is the mother of necessity. We don't realize we need something until an "inventor" shows us what it can be, and what it can do for us.

Which came first? Is necessity the mother of invention? (as the saying goes) ...or is invention the mother of necessity? Is inventing unrecognized necessities the real heart of inventing? As Jobs famously said: "It’s not the consumers’ job to know what they want.”

Jobs was more important as a necessitor, than as an inventor.  It struck me that the point some have raised -- that Jobs did not invent the technologies he popularized -- has some validity, but fails to balance the picture with this important point.  It is true that the mouse, the "drag-and-drop" graphical user interface, hypertext, music downloads, MP3 players,smartphones, tablets, touchscreens, computer animation, and many more key "inventions" applied by Jobs were not invented by him.  It seems widely recognized that Jobs' key contribution was that he saw how such things could be put to use in new configurations, and to serve needs that others did not see or saw less clearly (and also that he had the drive and resources to realize his visions...)

This resonated with me, because I have often felt that my own history as an inventor has a similar focus (even if hardly on the scale of Jobs').  The contribution is not so much in solving a recognized technical problem, but in seeing what technical problems should be solved, and why, and what else that would mean.  (That is why the theme of this blog is "user-centered media" -- that is pretty much the theme of much of my work.)

In a sense, this relates to innovation at the level of "systems thinking."  The necessitor does not just solve a problem, but creates a whole new system, within the larger system of people, technology, economics, and culture.  Jobs saw that what was missing in the music business was a new model for aggregated, simplified sales of music, and integration of an e-commerce system (the iTunes store) with a user agent (iTunes) and a device (iPod).  Once people saw that, they needed it.  No one created the wholistic vision that enabled that necessity to be recognized and acted on until Jobs did.

Similarly, some argue that Edison's real impact was not the light bulb, but the electric distribution system and related infrastructure that he recognized as needed to make the light bulb broadly useful.  It is perhaps more apparent that Ford was not so much an inventor of cars and mass production, but a necessitor, who realized that we needed simple black cars, and lots of them.  Often such cases are not simple inventions, but whole systems of invention.  One necessity/invention leads to other necessities/inventions, to whole ecologies of inventions.

So which came first? the necessity or the invention?  I suggest, as in most things, the answer is a non-dualistic "yes, both."  It is hard to separate the two.  Our patent system seems to think of inventions as the thing that matters.  The constitution defines patents to be for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvements thereof."  This has always seemed to me a limited view of what inventors do.

I suggest an equal form of "invention" is what Robert Kennedy spoke of:  "I dream of things that never were, and ask why not?"  Once we take that step, we may need to invent some technology, but often what we need to do is take the vision, understand all that it entails, and assemble a whole system from technologies that may have previously existed, but not been combined and adapted in the right way.  This kind of systems thinking, is on a much different level than the more commonly recognized engineering tasks of solving the technical problems to meet a previously recognized need.

...This also has led me to questions about the place for such contributions in the patent system.  It seems to me that such contributions may be equally deserving of some kind of patent protection, to reward the creative thinking that advances our "useful arts" and our civilization in general.  Just as with more narrow senses of technical invention, this takes not just inspiration, but perspiration (to paraphrase Edison).  But just how this kind of invention of necessity fits (or could be fit) with our current patent system seems a bit unclear.

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[Should anyone know of any good thinking by others on this theme, I would welcome references.]

My Intellectual Ventures Inventor Profile

Recently I had the pleasure of being interviewed by Intellectual Ventures for a story about my work as an inventor. I have been looking forward to seeing it posted in their new Inventor Spotlight area. Unfortunately, I still have to wait a bit. My story was one of the first to be written, but my deal was fairly complex, and they want to work up to that. So, while I wait for them to present the story, here is a teaser.

For those of you who have not been paying attention, Intellectual Ventures is remaking the patent business. They have gradually become less secretive -- having raised $5 billion to acquire over 30,000 patents since 2000, they are having a huge effect, much of it yet to be seen, and are still viewed with awe by some, and fear by others. Their story has been covered extensively in the press.

As an inventor, and a believer in what technology can enable, I think they are changing things very much for the better.

Some of my history as an inventor -- my twelve year struggle from conception to monetization of my first patented invention -- was outlined in a 2008 blog post. That did not get into how I partnered with others to develop my patents, leading to a sale for $35 million. I faced most of the challenges of the lone inventor, unable to get large companies to a reasonable deal without litigation, even with professional partners to lead and fund the effort. I always viewed litigation as a very unpleasant and wasteful prospect, and two years into a hugely expensive and draining case (even with other people's money), I was eager to end it as soon as possible.

That is where the market came to the rescue. The IV case study will give more details, but, in brief, I saw them change the game from a brutal, zero-sum battle (attractive only to lawyers) to a win-win business proposition that was beneficial to all. They brought unique insight into the market forces, great cleverness in structuring deals that I understand to have been first of their kind, and mastery in moving the warring sides to a deal quickly, overcoming many stumbling blocks.

The deal provided my company, Teleshuttle, with the resources to let me focus on my work as an inventor, which is the work I love and do best.*

I look forward to seeing the story of this landmark deal on IV's Web site, and to IV's contribution to developing the market becoming more widely known and understood. IV deserves credit for leading the way toward a world in which invention is more sensibly valued, rewarded, and stimulated -- to make life better for all of us.

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*For example, there is my current work on the FairPay pricing process, described extensively on [the FairPayZone**] blog: I have patent filings related to this, but they may or may not ever have any value. Nevertheless, because some of my patents have brought in funds, I can develop FairPay essentially as a pro-bono project, just because I think it is an idea the world will benefit from.

There is a parallel here: Just as IV found a way to arrange a fair value exchange between me as innovator and those who benefit from my ideas, I put forth FairPay as a way to arrange a fair value exchange between those who create content/services and those who benefit from that.

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[**This post was originally posted on the FairPayZone blog on 4/27/11, but has been moved here as more fitting. 

Comments:  a few comments can be found on the original posting at FairPayZone.com]