In the past two weeks, in addition to the grants of some intriguing patents highlighted below, I caught a thread of an argument about the relevance of patent protection. Instead of encouraging innovation, patents discourage it. More specifically, in the Internet age, IP (intellectual property) can be introduced into markets without patent protection because the historical reasons why patent protection was necessary have become irrelevant.
On May 12, I came across a blog in SAP’s online Business Innovation venue entitled “Patents Are Dead” written by Christopher Koch. He described how patents came into being to provide protection to inventors for a period of time that was considered necessary to allow for the costs of development and “go to market” be recouped. This protection fostered innovation because it incented the inventor to take on these costs knowing that he or she had the protection of law. The protection of law created an artificial condition of economic scarcity, meaning that if the patented product was desirable to consumers, the condition of scarcity (only one producer without competition) would allow pricing to be set as high as the market could bear, improving the likelihood that expenses could be recouped.
With the Internet Age, 3D printing, mass prototyping and production tools such as robotics, Koch’s argument is that the costs of development and “go to market” are approaching zero. He does clarify that some products such as new drugs will still require patent protection because of their massive development costs, the result of significant regulatory requirements.
His argument is based on a position paper published on March 24th of this year by Mark Lemley at the Stanford Law School. Entitled “IP in a World without Scarcity,” it covers in 55 pages considerable evidence to support his conclusion:
“The Internet is a harbinger of things to come–of a raft of new technologies that offer the promise of separating creativity from production and distribution, and reducing the cost of all three. Those technologies challenge the basis for our IP system, and indeed the basis for our economy as a whole. The lessons from the Internet experience are surprising and encouraging: people will create when given the opportunity to do so, even without effective IP protection. Those lessons will have relevance for patent and design patent as well as copyright as post-scarcity technologies remake more and more of our economy in the shape of the Internet.” (pg. 55)
I can see the merit in his argument, but, read the paper and draw your own conclusions. For what it is worth, IP’s value increasingly depends on speed to market, something that the present patent review process does not accommodate.
The blog we’ve just discussed was published in a “branded” venue, namely, SAP, which is a giant in the software application market. It goes head to head with the likes of Oracle, and is itself an aggressive patentee. It is also undergoing a change in leadership which is already shaking up the giant, forcing it to become cloud-focused, more agile, and especially more relevant to the infrastructure requirements, or ecosystem, of The Internet of Things. SAP was granted 35 patents in the past two weeks, mostly for software processes.
When you see a patent with just one name on it, most of the time you let it pass. There are still a lot of solitary inventors at work. But when the sole inventor’s name is Jeffrey P. Bezos and the assignee is Amazon Technologies, Inc., you sit up and take notice. Such is the case for Patent 8,725,838 (“Content Sharing,”) granted on May 13. The application was filed in late 2012, and covers content sharing across devices using audio signals. The first prior art citation stretches back to 1971 (Patent 3,609,752 “Simultaneous Data Encoder and Decoder,”) for a device that used frequency tones similar to touch tone phone tones. In the Background section of the new patent, there is a clear reference to finding a way to share ereader content when Wi-Fi and internet connectivity are not available.
WiTricity has been cited before, and week after week has at least one patent grant. I’d keep an eye on this company because it is working on bringing wireless energy transmission to market, and the grant it received on May 20 is particularly interesting. If you want a visual on what it is doing, here’s the CNN feature aired in March of this year. Have you considered capturing wireless energy for device recharging in a bag? Yes, a bag. Whether or not you have, you should at least look at the illustration of the charging bag in Patent 8,729,737 (“Wireless energy transfer using repeater resonators”). My mind flashed forward to luggage manufacturers that could offer an accessory bag designed for charging devices while you are sitting on a plane, or while enroute to the next appointment. And if this is not exciting enough for you, then consider that the first citation of prior art referenced in the new patent is Patent 645,576 (“System of Transmission of Electrical Energy,”) issued to the great Nicola Tesla on March 20 of 1900, just more 114 years ago. That it took more than a hundred years to turn his insight into marketable reality says much for the way winners preclude losers when competing technologies go to market. Edison and his concept of energy transmission beat out Tesla’s because Edison could get the financial backing to build the necessary infrastructure, and Tesla could not.
The minute I see a wireless charging bag appear on the market, I’ll report it to you. If you see it first, please drop me a line.
We talk about connected devices that offer wonderful new services, but rarely see the massive infrastructure that is needed to support that device and its applications. Here’s one that provides insight into the infrastructure that one device requires.
Patent 8,725,064 (“System and Method for Providing Event Spectators with Audio/Video Signals Pertaining to Remote Events”) was granted to Immersion Entertainment. On the company’s Website, click on “The Insider” under the “Concepts” button on the left side of the page and you will see a device which you can hold in your hands and slip around your neck to take along with you to a spectator event. The purpose of the device is to give you a means to view other content while at the event, perhaps a different baseball game when the one you are physically at gets boring.
Now, to understand just how this device can deliver this alternative content to you, look at the schematic in the patent for the infrastructure that the patent covers. You are looking at a significant number of connected devices that must exist to enable the connected device in your hands to work. When you see something of this magnitude of complexity, think of the iceberg analogy: What you see sticking up above the surface of the water is only 10% of the entire mass of the iceberg. Putting it another way, think of an ecosystem and its component parts. Every part of that ecosystem depends upon some other part, whether it be one or many, to exist and function according to its role. Pull one part out, and the system comes under stress, or collapses.
To be sure, what is covered in Immersion and WiTricity’s patents are costly to develop and deploy, which brings us back to where we started: the “Patent is Dead” argument. Would you undertake what these companies have developed and are deploying without patent protection?