Hats off to IBM Marketing
IBM is perhaps the most sophisticated marketing company in the computer ecosystem.
Being able to sway public and market opinion has always been an IBM
strength.
way to sell against other computer makers? Who invented “sell the
secretary, not the machine” to sell the Selectric? Who funded the
mainstreaming of the personal computer, with Charlie Chaplin ads on
national TV, and a country-wide network of money-losing but
market-developing IBM retail stores that evangalised personal computers
in business–and cleansed the hippy image of the industry?
Hats off to IBM’s patent licensing business
IBM is also the world’s largest holder of issued US patents.
IBM is the largest patent troll–that is, patent licensing company-on the planet.
per year. IBM is well-known for its “file first, search later” approach, which floods the patent office with claims. IBM licenses its intellectual property for about a billion
dollars a year.
So forgive me for being cynical about IBM’s initiatives in “patent reform” when they seek to raise the bar for new patents being issued by the patent office by calling into question the “quality” of the patent office process and the “quality” of issued patents.
Hats off to IBM when it uses its marketing prowess and almost unlimited funds to promote radical change in the US patent system? I don’t think so.
Brad Feld just sent me a link to the following document funded by IBM on the question of patent quality.
This document reflects exactly the sort
of promotional activity that IBM has long done for its strategic
initiatives.
Pardon me for becoming immediately suspicious when something is so polished. It means someone spent a lot of money on presentation. Hmmm. (see my admittedly snarky review of IBM’s “open” marketing campaign in note # 1 below).
But getting beyond slickness, consider the substance:
At first reading, it is hard to fault this IBM intellectual property initiative. Apple pie and motherhood.
The IBM initiative references the need to create new institutions to help make the market for intellectual property more effective. This is something I am committed to.
The IBM initiative also acknowledges that intellectual property IS property–something I think is fundamental to promoting innnovation and supporting inventors.
IBM argues for patent quality–something I believe is important. Both Brad and I agree patents should be granted for true innovations–important problems solved in novel ways.
IBM’s red herring, “patent quality”
The problem with IBM’s initiative is that while it pretends to be systematic, balanced and comprehensive, it is not.
Instead, IBM focuses attention on only one small aspect of the patent and intellectual property marketplace challenge.
IBM positions patent quality as the major problem with the patent system–and then proposes a “solution” that transparently favors IBM.
IBM’s careful framing of the “patent quality problem” is a deliberate red herring.
Patent quality as an output of the patent office is good. Patent quality as an output of the entire patent value chain is excellent. Licensed patents, those that matter, are an output of the entire end-to-end patent process–from
submissions, to patent office actions including challenges, to routine
licensing as an element of, say, chips or hardware or services–which
is most of the market, to notification of potential infringers, to
negotiation among parties disputing particular property rights, to
settlements, and to the rare but vital-to-the-total process referrals
to courts of law.
“Patent quality” as IBM defines it is NOT a problem. While one can
always find examples of dumb patents–out of thousands granted–I have
never in my business experience been stopped or slowed by a stupid
patent. Never. Irritated, inconvenienced, but never stopped. Dumb
patents, as an issue, is a gnat.
We must not allow ourselves to be steamrolled by IBM into making
radical changes in the patent system to address a non-issue. Dumb
patents are irritating, but are not worth profoundly changing the
patent system to protect against. People argue that Sarbanes is a radical solution that is too expensive for the problem it solves: Enron. Well, at least Enron-like accounting scandals are a real, recognized problem that has cost investors billions of dollars of lost capital. Can you say that about “patent quality?” No. “Patent quality” is a made up issue, promoted by IBM and other big companies, supported by a small number of academics who are on the pay (employees or grantees) of the large companies.
The real problem is invention theft
Invention theft: A real, pressing, day-to-day challenge
While I have never been more than inconvenienced by stupid patents, I have had extensive experience with invention theft. As recently as two months ago a young entrepreneur took an invention to a company I am invested in, negotiated to sell or license the invention. After many meetings the CEO told this person that the company had decided it could just copy the invention. At the next meeting the CEO said that he had just discovered that his company had, unbeknownst to him, “been working on just the same invention for several months before” negotiations had begun with the young entrepreneur. This seemed rather incredible, but what was the young man to do?
Theft of legitimate inventions, original innovations, is a day-to-day occurrence in the technology ecosystem. This is the elephant on the table in discussions of patents. What is needed by true innovators, by creative people, is better protection, not weaker protection.
Honestly, I am angry about this situation. I am saddened by the stories of young people and young companies whose inventions are stolen by those with the money and the market power to capitalize on these inventions.
IBM seeks to distract us from the much bigger and more immediate problem of theft of intellectual
property by large companies like IBM and Microsoft. IBM wants us to look away from the terribly
high cost of patent enforcement against infringers such as the
self-same IBM and Microsoft.
Why is IBM so keen to do this? Because IBM’s traditional business model cannot survive in the Web 2.0 ecosystem as that ecosystem is evolving
IBM’s business is toast unless it can freely source inventions from Web 2.0 entrepreneurs
What terrifies IBM is that it no longer is a primary source of world innovation. It must beg, borrow, buy or steal inventions in order to continue in business.
The community of Web 2.0 developers is the major source of innovation in the ecosystem. One can argue that this or that Web 2.0 innovation is not of high enough quality to warrent a patent, but one cannot argue with the collective innovation of the Web 2.0 community. There is no argument that the worldwide Web 2.0 movement, the Web 2.0 swarm, is vastly out-innovating IBM and similar large companies. And as millions and millions of new inventors come online, in India, China, Africa, the Americas, Russia, the swarm is expanding.
The swarm will kill IBM if it cannot get ready and continuous access to the inventions born of the swarm.
The problem for the Web 2.0 innovators and companies is how to be fairly paid for their innovations. Other than being acquired for relative pennies by Google, or Microsoft, or Yahoo, or Murdock, or IBM, Web 2.0 companies have found few ways to make money beyond serving Adsense ads.
During the next few years the biggest issue facing the Web 2.0 community will be how to retain its rightful ownership over its valid, high-quality inventions. The biggest issue facing the Web 2.0 community, and the individuals with the community, will be how to keep their innovations from being freely appropriated–stolen–by large companies like IBM.
The sad news for IBM, and the good news for the community, is that there are a number of law firms and private equity firms that will now help entrepreneurs secure their property rights and enforce them against infringers. The Web 2.0 ecosystem is becoming sophisticated about property rights. IBM calls these law firms and investors “trolls” because they represent people like you and me against the likes of IBM. IBM does not like such firms.
The biggest strategic issue facing IBM
The biggest strategic issue facing IBM is how not to overpay for the community-created inventions upon which it is now dependent.
Now do you understand why IBM is spending millions to promote its own version of the open source movement? To give it preferencial access to community inventions. “Free software” AS IN “free beer,” for IBM.
Once Web 2.0 inventors wake up to the value of what they are inventing, and once Web 2.0 inventors realize how relatively easy it is to file patents and protect their property, look out IBM. IBM, now mainly an integrator of other people’s technology, knows and fears this.
The slick look of the IBM anti-patent initiative is directly proportional to the fear you can see in IBM’s eyes. The funding by IBM of EFF and other so-called “patent reformers” is a direct reflection of the threat of Web 2.0 to the IBM core business.
IBM is campaigning as aggressively as it knows how. Its survival is at stake. IBM is determined to raise the bar for new patents, and especially for patents filed by small companies and independent inventors.
IBM fears the Web 2.0 ecosystem. IBM fears the Web 2.0 developers.
What IBM fears most is that the Web 2.0 developers will soon wake up and claim their rights to the fruits of their hard work. What IBM fears most is that it will no longer be able to create a business based on being a fast-follower, technology-marketer and systems integrator of other people’s inventions.
So let us rise to the call! Let us band together and claim the fruits of our labors!
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Note #1:
Hats off to the best public relations money can buy
The IBM document is slick, with terrific graphics and a cool orange
color–the “RSS Orange” to be exact. IBM gave it a terrific title,
“Building a New IP Markeplace.” Hard to argue with that.
The document is credited in the page notes not to IBM, but to a project called “A Global Innovation
Outlook, 2.0 Report.” The GIO is an IBM-funded, IBM-led lookalike to the World Economic Forum. Not that IBM would copy another’s invention, but the similarity is striking.
>
- >
- >The future of the enterprise
- >Energy and the environment
- >Transportation and mobility
>Rather than thinking of these topics in terms of
established sectors or vertical markets, the deep dive sessions
approached them as broad, horizontal issues that could affect virtually
every enterprise and organization on the planet.
>
>
>The fascinating insights from these discussions will be
released in March 2006 at two GIO Innovations Salons in New York City
and San Francisco.
>
>
>This initiative represents something that is uniquely
IBM: A combination of world-class technology leadership and deep
expertise in business and industry. Deep relationships with a broad
range of clients, governments, universities and other ecosystem members
around the world. A willingness to elevate the dialogue around
important issues and examine the broad implications for the world.
>
Can you believe it! Fifteen, count ‘em, “deep dive” sessions!
The booklet opens with a full-page quote in bold, by Jean-Babtiste Sourfron, of the Wikemedia Foundation.
Street cred. Check.
The IBM document references a fifty-person,
IBM-funded advisory committee. Log rolling?
The mouse print under the list of participants reads:
expressed and participation in this project reflect the individual
opinions of the participants and not necessarily their organizations.
Participation in this project does not necessarily reflect endorsement
of the conclusions published in this booklet.”
Good to know. 8 of them are from IBM itself, by the way.
