Cook Book by Innovative IP Owner is No Recipe for Success

March 20, 2011 by ipinsider1 |

Myhrvold’s ’Modernist Cuisine’ Inspires and Confounds

Over the past ten years much has been written about Intellectual Ventures, the IP acquisition and licensing business, and its enigmatic founder, Nathan Myhrvold.

A recent cover story in The New York Times Dining Section, of all places, may provide the clearest insight yet into IV and its CEO.

The article, The Conjurer,” (sic) looks at Modernist Cuisine, $625 ($467.62 on line), Myhrvold’s epic, six-volume team project intended to deconstruct food and food preparation and discover why ingredients and techniques work the want they do. Strangely, some of food reporter Michael Ruhlman’s frustrations about the book could be directed at IV:

“For nearly two weeks I lived with this extensively hyped work — immersion circulators humming on my counters, a pressure cooker hissing, food sealer and grinder hot from use beside them — and I remain frustrated that I lack so many tools and ingredients required to actually use this behemoth.

“I was left wondering how a book could be mind-crushingly boring, eye-bulgingly riveting, edifying, infuriating, frustrating, fascinating, all in the same moment. Every time I tore myself away from these stunning pages to emerge for air, I had to shake my head so hard my cheeks made Looney Tunes noises.”

Sound familiar?

Modernist Cuisine, equal parts science, artistry and bold perspective could be a work of genius or maybe just a very comprehensive work.

Blending Ingredients for Maxium Effect

Ironically, Myhrvold’s book research team shared the same 18,000 square foot laboratory built to conduct IV’s invention experiments.

It’s difficult to know if Myhrvold is just two chess moves ahead of us or really twenty-five. Is he as good as a Grandmaster, playing several related games simultaneously, or just one big one involving lot of pieces?

Modernist Cuisine, like Intellectual Ventures, may prove to be part of the oeuvre of a restless visionary not easily comprehended, or the grand design of a canny investor with the passion to turn turnips into soup.

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Pictured above: The Modernist Cuisine team with Martha Stewart
Illustration source: ModernistCuisine.com

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Patent War “Launched” by Billionaire Allen

August 29, 2010 by ipinsider1 | Edit

MSFT Founder Sues Over Web Rights

Microsoft co-founder Paul Allen is claiming in a suit filed in filed on Friday in Seattle that patents owned by a company that he once controlled, Interval Research, are being infringed by Google, Apple, Facebook and eBay and seven others, including Staples. (A link to a copy of the complaint can be found below.)

The patents cover substantial parts of basic Internet activity such as pop-up stock quotes and videos along the side of a screen. If the validity of these broad patents is upheld they are likely worth a fortune. However, it will not be easy.

The Wall Street Journal wrote on Saturday, on p.1, “Microsoft Founder Launches Patent War.” WSJ. com in the same story said “Microsoft Co-Founder Launches Patent War.” I wonder if Bill Gates’ representatives made a frantic call to Dow Jones to reassure them that he was not doing the suing this time.

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The timing is interesting. Allen, owner of  the Seattle Seahawks and Portland Trailblazers, was always an astute purveyor of patents through his investment arm, Vulcan, Inc..

Whether this action is merely a smart move from a billionaire investor having fun challenging Internet giants, or (once again) fundamental patents have been ignored by companies who think they’re too big or smart to pay license fees, except when they are forced to.

Seattle-based Microsoft and Amazon were not named in the suit.

It will be difficult for Forbes Four Hundred member Allen (37th at $13.5 billion)  to use the “poor inventor” defense because he lacked sufficient capital to develop his inventions.

The case isInterval Licensing LLC v. AOL Inc., 10cv1385, U.S. District Court for the Western District of Washington (Seattle).

Stay tuned for more on this. The fun has just begun.

Image source: wwwwery.com (Allen is the one on the right.)

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Part II of Patent Performance Discussion is Out

August 9, 2010 by ipinsider1 | Edit

Better Measures

The conclusion of my chat with Apple, IBM, Microsoft and H-P heads of IP business about how they measure success (the Intangible Investor 43), “Measures of Success, II,” is running in the Sept-Oct IAM. Below is the executive, executive summary:

Understanding patents starts with a business’ ability to identify needs, establish expectations and measure performance. It’s easier said than done, say three experts.

Berman: Many high-tech companies believe that improving their patent portfolio through acquisition, in-license or sale is like admitting defeat. This would seem counter to IAM best-practices?

[Irving] Rappaport [Apple, Medtronic, National Semiconductor]: That’s a very narrow view of ROI. If the acquired rights help the company’s overall business strategy, it should be seen as a win-win, particularly if it would take a long period of time for the company to develop its own rights in the acquired technologies. The terms of the deal also are important.

[Joe] Beyers [H-P]: Defeat may not be the proper term. It is more like “anger” that they now have to pay a third-party, perhaps, a competitor, to execute their business strategy. Compounding the problem is that this cost was likely not forecasted in the financial model/budget. Surprise expenses are the worst kind of costs to an operating company or division.

[Marshall] Phelps [IBM, Microsoft]: Forward-thinking companies don’t believe that in-licensing or patent acquisitions are weaknesses.

*     *     *

Companies have different IP needs at different points in their evolution. It’s nice for an operating company to say “No thank you. We have all of the IP we need.” But that level of self-sufficiency would be rare for most innovation dependent businesses, ever mindful of R&D costs, filing fees and litigation risk.

Image sources: baltimoresun.com, gottabemobile.com

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Part I: Former Chief Patent Execs Speak Out

June 10, 2010 by ipinsider1 | Edit

Defining Performance: No Simple Matter

Former heads of intellectual property at Apple, IBM, H-P and Microsoft agree that using patents successfully is more elusive than many business executives and investors think.

In my latest Intangible Investor column, Measure of Success, currently running in IAM, I asked three esteemed former heads of IP at Fortune 500 companies, Joe Beyers, Irv Rappaport and Marshall Phelps, how they measured patent performance, and also how they communicated it to non-IP professional.  The answers were both predictable and surprising.

Excerpts from the column:

Peter Drucker, the great management consultant and writer, said that “What you can’t measure you can’t manage.”

One of IP’s greatest challenges revolves around measuring what many believe can not be reliably counted, patent performance. Patent performance is so frustrating a challenge that otherwise courageous companies avoid doing it or simply say that it can not be done.

IP value means different things to different holders at a given point in time. Patents, especially, are informed by context, and context changes over time.

For some businesses patent performance is about royalties, for others, freedom to sell a product unencumbered by law suits or the ability to mitigate risk, for still others, performance is tied to establishing and maintaining market share for a particular products or profit margin.

“Everyone understands the importance of revenues,” said Marshall Phelps, former IP business and strategy head of IBM and Microsoft. “If you build financial expectations for IP into the business unit plans (or licensing targets or whatever), then you have allies in reaching those targets.

“If you have the CEO in line with the IP goals and targets, it helps persuade management in general as well as those lower down in the organization.”

For the complete column and additional comments from Phelps of IBM and Microsoft,  H-P’s Beyers and Apple’s Rappaport visit IAM. Part-two will appear in the Sept-Oct issue.

Photo: IP Review

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Interview – Joe Beyers

February 13, 2010 by ipinsider1 | Edit

The Ocean Liner and the Speed Boat

Joe Beyers headed IP business at H-P where for decades he helped to monetize thousands of patents and other innovation rights in dozens of different ways. Chief IP Executive in name if not title, Joe reported to the CTO and Board of Directors before it became fashionable to do so.

Over a 34 year career at H-P  he headed other divisions, including areas of M&A and contributed inventions of his own. Today, Joe leads Ambature, a smart energy start up www.ambature.com. IP Insider caught up with Joe recently.

IPI: You worked for one of the largest and most successful technology companies for most of your career. What has it been like making the transition to a venture funded start-up like Ambature?

JB: HP was not always the largest nor the most successful technology company.  It had to struggle like any other company to achieve its current position in the market place. At a personal level, when I worked for HP I attempted to create an entrepreneurial environment in my organizations

When I started the IP licensing function in HP I had to build it up from the ground up starting with just me. There are published reports that the IP income for HP grew by over 10X during my tenure.  Probably, the key difference with my role in Ambature is that in addition to being the Chairman and CEO, I am also the acting CFO, HR manager etc.

IPI: Are there any similarities between the two companies?

JB:I guess it would be like comparing an ocean liner to a speedboat.   They both float on water and are powered by energy sources.  One can weather a hurricane and the other can’t.  One can go faster and turn quicker but the other one can go farther without refueling.

IPI: You were strongly anti-troll when you were head of the IP businesses at H-P. What’s your perspective now?

JB: The industry seems to be continuing to confuse the topic by:

a) Merging the concept of merging NPE’s (non-practicing entities} with companies whose primary business model is to acquire IP to assert against other companies (my definition of a patent troll). I was on a panel at an LES conference last week.  One of the panelists on a separate panel accused Stanford of being a patent troll.  The Stanford representative claimed that Stanford was not even an NPE. And

b) Linking the “troll” concept with deceptive (marginally ethical) patent assertion tactics. Such deceptive practices are a function of an individual’s or a company’s engagement ethics and can be independent of their actual business model

My view when at HP and today is that people should be able to obtain fair value for their intellectual property.  This has not changed. Now that I am the Chairman and CEO of a company that is developing technology that we intend to license, and not build actual products using this technology, then by some definitions I  am now the head of an NPE.

I and my stakeholders are taking a risk in developing this technology and should be properly rewarded if we are successful.  In the past I have argued that the uncertainty in the current judicial system as it relates to patents enables patent trolls to obtain an unfair value for their IP.  Recent court cases that decrease the likelihood of an injunction and increase the risk of a declaratory injunction for a patent assertion have improved this situation. Further, changes/refinements are possible, but at this point I might question whether such further actions might impair the ability of a small NPE to actually obtain its fair value for its inventions.

Ambature is developing technology that could significantly impact  people across the planet.  I believe that my engagement with the company will have a significant impact on the success of the company. If the patent judicial system was further changed to the point that it is extremely difficult for a small NPE to obtain fair value for its IP, I have often asked myself the question of whether I would have taken the personal risk to join the company. It is this dilemma that has given me pause in my thinking.

IPI: You, Marshall Phelps at MSFT, Rudd Peters at Philips and to some extent Dave Kappos at IBM might all be considered Chief IP Officers (CIPOs). You reported to CTOs, CEOs or even the Board of Directors. Why do you think the pendulum has swung back to the legal department?

JB: IP is a strategic business asset. It should be managed accordingly. Monetizing IP involves risk. One of the many contributions of a legal department in a large company is to help advise/manage/control enterprise risk.  A key factor in the choice of the model for an IP monetization function is the level of risk that a company is willing to take relative to the benefits. I am not so sure that “the pendulum” has swung, as that the risk profile in some of the companies with high visibility IP monetization programs has shifted.

IPI: What advice would you give to today’s IP executive?

JB:

a) Work with your key executives to get alignment on the company’s IP strategy.

b) Make sure that you have in place an agreed-upon set of success metrics.

c) Stay aligned with the key business units on strategies and key execution tactics.

d) Keep testing all of the above to watch for unexpected changes in views.

e) Be innovative in developing ways to accomplish these objectives.

IPI: Are you still active with the Boy Scouts?

JB: Yes, I have been an adult leader for 16 years and I continue to be the Scoutmaster of the Troop.  I have two boys who became Eagles and a third who is one rank away from Eagle.

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More iPeople coming soon!

One Response to “”

  1. Joe is certainly one of the key thought leaders in IP and had such a great stint at HP.
    Very good article and I look forward to success from Joe’s company.
    brian

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