Tag Archives: Amazon

Financial Times article slams US patent syst for business model bias

An article that appeared last week in the Financial Times calling into question the effectiveness of a U.S.  patent system dangerously weakened by bad legislation and a false narrative about patent “trolls,” has won praise for its accuracy and honesty.

In a rare instance of serious business reporting on intellectual property rights, award-winning journalist, Rana Foroohar, slammed Silicon Valley companies that have endeavored to impede patent licensing and diminish innovation challenges from companies they cannot control.

“Indeed, the only ones that seem not to be complaining about the current system are a handful of the biggest Silicon Valley companies — including Google, Apple, Intel and Cisco.” While they all have their own patents to protect, their business models, which involve products that include hundreds or even thousands of bits of IP, tend to do better when there are fewer patents to deal with.

“But small and mid-sized software and hardware suppliers as well as life sciences companies have very different business models — ones that live or die on the ability to protect a handful of patents, and thus monetise their years of investment. For many of these companies, the shifts in the system that began a decade ago have gone too far.”

Several small and large patent holders told IP CloseUp that the FT deserves praise for finally getting the patent story right, one calling it a “breath of fresh air.”  Many believe that the business press has failed to report accurately about the patent system, and has served to blow the patent “troll” narrative way out of proportion, especially for those outside of the IP industry.

FT allows subscriber access to the Foroohar article, Big Tech vs Big Pharma: the battle over US patent protection,” here. [Oddly, the title does not reflect the depth of the piece. Perhaps a more explicit one may have been too much for some readers or editors?]

For a free version of the article that ran on CNBC, go here.

Tech Titans

Much of Ms. Forhooar’s recent reporting in the FT has dealt with the rise of what she calls tech titans, many of which are attempting to maintain their dominance by keeping the patent playing field uneven and potential competitors at bay.

She has served as correspondent and reporter for CNN and Time, and spent 13 years at Newsweek, as an economic and foreign affairs editor and a foreign correspondent covering Europe and the Middle East. For a list of her recent articles, go here.

Forhooar has won many awards for her reporting and has received several journalism fellowships. She is a life-member of the Council on Foreign Relations and has written a book, Makers and Takers: The Rise of Finance and the Fall of American Business.

“Big Tech vs. Pharma” sets a sorely needed benchmark for the business press for reporting accurately on the intellectual property. Covering the impact that changes in the patent system have wrought, and who are the real beneficiaries, is both a challenge and an opportunity.

Image source: twitter.com; lovespace.co.uk

Automakers and tech giants are locked in a strange patent race

At time when patent certainty and value are under attack, global automobile manufacturers are competing with major technology companies for IP rights to the future, especially driverless cars. 

The race is reminiscent of the competition between financial institutions, bigtech and fintech start-ups to control innovations in transactions, including those that relate to blockchain.

The automakers, like the banks, have traditionally cross-licensed each other in an effort to maintain patent peace and keep their franchise exclusive. It has yet to be determined if those participating in new technologies will wish to be similarly collaborative. Businesses like Google, Apple and Amazon certainly have the resources  and leverage to enforce inventions, if they choose to, or even buy a competitor.

The WSJ reports that a large part of filing in the auto industry has been with regard to self driving and connected cars, with 65% of GM’s filed patents in this area. Toyota, with more than 3,000 patents filed is by far the leader, but does not appear to figure into the self-driving patent race, choosing to focus on other areas of innovation, like efficiency (see graph below).

“Companies like Google, Facebook, and Apple, are pouring enormous resources into a vision of mobility that focuses on the driver experience,” writes Forbes“— so much so that they have the potential to take away some of the limelight — and profits — from the automakers many presumed would dominate car connectivity and driverless technology.”

Irony

There is some irony in the auto industry and financial patent races, since the Alice decision made software patents difficult to obtain and even harder to enforce. What are they thinking?

It remains to be seen how successful tech giants and disruptive banking and auto tech upstarts will be in competing with established players for innovation and rights – and if and how they will be able to deploy them. (With patents, sometimes leverage is more powerful than revenue.)

Two things are for certain: the source, ownership and importance of transportation inventions are changing; and the desire to secure meaningful patents that can be licensed will increase.

Image source: WIPO, Oliver Wyman; WSJ

Amazon’s controversial ‘1-Click’ patent will expire September 12

This year’s 9/11 remembrance will be followed but an anniversary of a different sort.

September 12 marks the day that Amazon’s controversial “1-Click” patent is set to expire and the invention placed in the public domain.

One-click has generated significant profits and market share for Amazon over the past eighteen years, but its expiration is expected to have minimal impact on the giant online retailer, whether or not other sites adopt similar transaction practices after the patent expires.

Amazon first applied for a patent on 1-Click in 1997, and it was granted in 1999 in the heart of the Christmas selling season. The core of the invention revolves around storing customers’ payment and address details, so only single click or tap on a smartphone in required to fulfill an order. This means that there are fewer steps to ordering, which is less time-consuming and more seamless.

In 2015, Amazon launched the “Dash” Button, a proprietary method for quick ordering. “Dash Button devices are WiFi-connected devices to place in your kitchen, pantry, or anywhere in your home you use your favorite Prime-eligible products,” says Amazon. “Simply press the button to reorder when you’re running low, and your products are on their way.”

Virtual Dash Buttons, introduced in 2017, are shortcuts to that make it easier to find and reorder favorite products on Amazon’s mobile app and website, and are available for free for millions of products that ship with Prime.

$2.4 Billion

The website Rejoiner says that the 1-Click patent has been worth as much at $2.4 billion to Amazon over the years. Amazon, which licensed the patent to Apple in 2000 for an undisclosed amount, has never been able to secure a patent for one-click for online retail in Europe.

 

Google is already working on a one-click payments system for its Chrome browser, and other browser companies are expected to follow.

Payments.com says that Google’s version of one-click payments will provide customers with a drop-down menu of stored shipping addresses and credit cards when shopping on a participating merchant’s website. The customer can click on the address and card to be used, enter the three-digit security code on the card and hit “pay now.” Other browser companies may choose to use a fingerprint instead of the security code.

Question: Would Amazon, or for that matter an independent inventor, be able to secure and defend a patent on one-click transactions today? It’s highly doubtful.

“Amazon may be prepared to lose its one-click payments advantage,” reports Business Insider, “as it looks to build an edge in other corners of the e-commerce market. For example, it has spent billions to strengthen its logistics and fulfillment operations to position itself as a leader in faster delivery.

“And as consumers increasingly demand speedier shipping, Amazon should benefit from its early investment in this area. Moves like this one indicate that the company is focused on carving out new advantages as the e-commerce space evolves.”

Brand Loyalty 

Amazon was recently issued a patent on a system for an “on demand apparel manufacturing system,” which can quickly fill online orders for made-to-order suits, dresses and other garments. Go here to see how it works. It’s clear that Amazon has not given up on trying to dominate the e-commerce space with inventions that are timely and which it can defend.

Amazon is all about brand loyalty and delivering a wide range of goods, at the best price, quickly. Prime and other customers are unlikely to go elsewhere just because other online stores have the same single button to make purchases easier. With a growing patent portfolio, Amazon is likely thinking of new e-commerce solutions that generate more profits and command more customers.

A good question is would Amazon, or for that matter an independent inventor, be able to secure and defend a U.S. patent on one-click online retail transactions today? It’s highly doubtful.

“Amazon has many different ‘one-click’ patents,” write Rolf Claessen, German IP attorney on Quora. “Which one do you mean? Do you mean all of them? Many also have been invalidated or not even granted – at least in Europe.

“In other countries like Australia, Amazon also could not successfully enforce the patent(see ZDNet). It seems that since about 2011, Amazon no longer tries to enforce the patents to collect royalties. I am not aware of any court action, where Amazon was successful enforcing any of these patents.”

Amazon’s Custom Clothing Patent

 

Image source: forbes.com; nyt.com

Drops (& gains) in patent grants to top holders reflect changing times

Every picture tells a story. So does each increase or decrease in the number of U.S. patents major businesses receive over the prior year.

The recently published IPO Top 300 patent recipients for 2016 encourages scrutiny. While overall grants were up 1.6% over 2015, there were several unexpected swings, and a number of notable gainers and losers.

Only four of the top ten U.S. patent recipients in 2016 were foreign-based companies, down from 2011, when eight out of the top ten recipients were non-U.S. It is difficult to tell if that change reflects more filing on the part of U.S. companies or less interest on the part of foreign filers. Probably, the latter.

Those receiving fewer patents in 2016 over 2015 include Toshiba, -33.3%, GM Global Technology, -14.8%, Johnson & Johnson, -14.1%. Broadcom, -24.3%, Blackberry, -28.1%, and DuPont, -35.5%. ABB Ltd., down 142%, was still granted 317 patents. NXP Semiconductor, which was acquired by Qualcomm in the fourth quarter, was down 70.3% in U.S. patents received.

Multiple Factors

Depending on the company and industry the grant losses can be attributed to several factors, including reduced R&D budgets; a lower regard for the value of patents due to changes in the law and decisions in the courts; reduced concern over patent counts; and the desire on the part of more companies to obtain fewer, better quality patents.

“It is difficult to attribute reasons or trends as to why a company may have had more or less patents issued from one year to the next,” Brian Hinman, Chief IP Officer for Philips told IP CloseUp. “Patents issuing in 2015 may still be reflecting the impact of the patent application filing surge just prior to enactment of the AIA hence the decline in 2016.  

“We also may be seeing the impact of more companies deciding to maintain their innovation as trade secrets especially in light of enactment of the DTSA [Defend Trade Secrets Act].”

It should be noted that some companies choose to spread their patent grants among multiple entities, obscuring the actual number received. Companies which had been actively filing software and business method patents in previous years, are likely to be doing less of that, now that those types of patents are more difficult to obtain and uphold.

Notable Increases

On the upside, among the top 21 recipients, Intel was up 30.1%, Taiwan Semiconductor & Manufacturing, 28.6% and Ford Global Technologies, 27.6%.  Amazon, 15th on the overall patent recipient list for 2016 with 1,662 grants, was up 46.3 % over 2015. This may reflect a new seriousness about entering or acquiring other businesses.

Other notable gainers include Nokia, up 73.8%, GlobalFoundries, up 136.5% and Hyundai Motor Co., up 39.1%. (GlobalFoundries acquired IBM Microelectronics in 2015.)

Among financial institutions, Bank of America was up 20.8%, having received 279 patents.  Perennial annual U.S. patent leader IBM, was up 7.8%, receiving 8,023 patents, the most of any company.

For the complete list of top 300 patent recipients, go here 

For an interactive list of top 50 assignees, go here.

Image source: statista.com; wikepedia.com; public.tableau.com

New book: tech elites’ disregard for privacy & IP must be managed

Can Internet monopolies – adept at providing at providing information – be prevented from violating the rights of individuals, businesses and IP holders, and impeding innovation?

They can if they are regulated like utilities, says Jonathan Taplin in his new book, Move Fast and Break Things.

In 2009, Mark Zuckerberg told Business Insider publisher and former Wall Street analyst Henry Bloget, “Move fast and break things is Facebook’s prime directive to developers. Unless you are breaking stuff,” Zuckerberg said, “you are not moving fast enough.”

Eight years later, this Facebook mantra has taken on a darker meaning. A new book by Hollywood producer and former USC Annenberg Innovation Lab director, Taplin (Mean Streets, The Last Waltz), offers a portrait of technology giants without restraints, routinely violating the rights of creatives, consumers and innovators, and propping up their own shares at the expense of investing in the future.

Subtitled How Facebook, Google and Amazon Cornered Culture and Under-mined Democracy, Move Fast and Break Things dissects the inordinate power of a handful of the popular companies and their founders, and what it means for culture, innovation, and personal freedom.

What Taplin does best is connect the dots by distinguishing between true break-through ideas and the ability to provide and mine data, especially personal information, for profit and dominate markets. The confluence of vision, ego, and wealth is for Taplin a dangerous mix that needs to be carefully watched if not closely monitored. Copyright and patent holders need to be especially wary.

Don’t Ask Permission

“The co-founder of YouTube, Chad Hurley, was a PayPal alumnus, schooled in Peter Thiel’s philosophy,” writes Taplin. “He built his company on the same ‘don’t ask permission’ ethic the Larry Page had embraced… ‘Who will stop me?’ [A phrase which can be found in Ayn Rand’s controversial novel, The Fountainhead.] This became the center tenet of Internet disrupters, from Thiel’s PayPal right up to Travis Kalanick’s Uber.”

Taplin writes that Google, who championed the tagline for its corporate code of conduct, “Do no evil,” controls 88% of online searches and search advertising, while Facebook has 77% market share in social media and Amazon a 70% share of e-book sales. He does not consider Apple a monopoly because its main hardware business has many competitors.

“The tech elites jealous guarding of its own monopoly platforms,” says Taplin, “is built upon a blatant disregard for the artist’s intellectual property.”

“More people than ever are listening to music, reading books, and watching movies, but the revenue flowing to the creators of that content is decreasing while the revenue flowing to the big four platforms is increasing. Each of these platforms presents a different challenge for creators. Google and YouTube are ad-supported ‘free-riders’ driven by a permission-less philosophy.”

Permission-less free-riding, or “efficient infringement” in has also come to dominate other parts of the IP workplace, rendering simple patent licenses more arduous than ever.

Consent Decree

How does Taplin propose we prevent Internet monopolies from violating the rights of individuals, businesses and IP holders, and impeding innovation? You regulate them like utilities.

It would be very difficult for many people and businesses to live without Amazon, Google, YouTube and Facebook, but it is becoming impossible for many who produce intellectual property to live with them.

This is not something that their founders and shareholders want to hear, but it may be inevitable. Europe is more apt to regulate BigTech than the U.S. – and it is not mere jealousy. If Google, for example, is indeed a monopoly, Taplin, a former tour manager for Bob Dylan, asks, would a consent decree like the one that the government made Bell Labs enter into in 1956 work? He believes it would.

Easy Ride is Over

The Guardian, the British daily, said “Move Fast and Break Things is a timely and useful book because it provides an antidote to the self-serving narrative energetically cultivated by the digital monopolies. They have had an easy ride for too long and democracies will, sooner or later, have to rein them in.”

It would be very difficult for many people and businesses to live without Amazon, Google, YouTube and Facebook, but it is becoming virtually impossible for many who produce intellectual property to live with them.

My full review of Jonathan Taplin’s new book can be found here, on IP Watchdog.

For more information or to buy Move Fast and Break Things, go here.

For a free preview chapter (via Google), go here.

Image source: jontaplin.com

 

Top patent defendants have faced far fewer suits in 2016, so far

The size of businesses sued most frequently for patent infringement in 2016 were significantly larger than in 2015, when five little-known patent holders were among the top defendants. The amount of litigation also is much lower this year.

Pharmaceutical company Eli Lilly (341) is the top patent litigation defendant in 2016, with a ten-fold lead over number two Samsung (31). No doubt much of Lilly’s defense is the result of ANDA procedures brought by generic drug manufacturers against branded competitors to establish bio-equivalent drugs.

The rest of the list – Amazon, Actavis, AT&T Mobility I, Huawei Technologies, LG Electronics, AT&T, T Mobile USA and Motorola Mobility – all have 21 or fewer suits filed against them so far this year.

2016

This represents a significant drop over last year, according to data supplied by Patexia.com.

Actavis, which acquired Allergan in 2014, is another diversified pharmaceutical company. Actavis is based in Dublin, Ireland, and is a subsidiary of Teva, an Israeli company. Five of the top ten defendants this year are foreign companies. Absent from the 2016 list is Apple and Google, which owns Motorola Mobility.

More Suits Filed Against Unknowns

For the entire 2015, Lilly had 977 patent suits filed against it. That is in contrast with the 341 filed so far this year. Samsung was again number two last year, with 49 cases filed against it.

The rest of the top-ten defendants for 2015 had some less-known names, including: Spin Screed, Sandi Scales, Conlin Properties, Amneal Pharmaceuticals and Lupin Pharmaceuticals. Rounding out last year’s list was H-P, Actavis and Amazon. Only three companies, Samsung, H-P and Amazon, appear to be IT pure-plays.

The number of suits filed against Lilly last year was almost three times higher than 2016 to date, and those for companies in the two through ten spots were about two times higher.

2015

Response to Increased Risk?

The increase in litigation filings against more established patent holders may have to do with the greater likelihood of favorable settlement or payout of damages from them as opposed to smaller players.

It may also have to do with the changing economics of patent litigation which must anticipate the likelihood, time and costs associated with inter partes reviews.

For access to the top-ten patent litigation defendants and the number of suits filed against them from 2007-20016,  go here.

Image source: patexia.com

New measure of success challenges traditional brand valuations

Measures of a brand’s power can differ dramatically, depending on performance criteria.

A new success index believes that in an increasingly connected world, traditional measures of brand equity are outdated. Criteria like social media strength can be overlooked and under-rated.

The D100, a new brand index from a division of a global advertising agency, believes that some strong brands are less meaningful, while others are not receiving the recognition they deserve.

IPG Mediabrands, the media holding arm of Interpublic Group (NYSE:IPG), in partnership with Jonah Berger, Associate Professor, The Wharton School at The University of Pennsylvania and New York Times best-selling author of Contagious: Why Things Catch On, has launched the inaugural D100, ranking the 100 most dynamic companies in the world using new world metrics.

USA

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The D100 marks the first time that brand success is measured with “new world” metrics, specifically:

  • AGILITY: the degree to which brands adapt to changing market conditions.
  • RESPONSIVENESS: the degree to which a brand listens and responds to customer needs and feedback.
  • INNOVATION: the degree to which brands leverage new technology and creates innovative products and services
  • SOCIABILITY: How large and engaged a brand’s audience is on social media.

Global

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Counter-Intuitive 

There are some notable disconnects within the D100, whose ranking can be viewed nationally or globally. For example, Ben & Jerry’s ice cream, has a dynamic score of 59.89, ranking it 20 globally. Its USA score is just 94. Fitbit is 15 globally, with a 62.75 D rating, and just 62 in the USA.

BMW is ranked 7 globally, 16 in the USA and a lowly 99 in Germany.

Each one of these surprises raises questions about methodology and value.

Germany

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It is interesting to compare the D100 top 10 with InterBrand’s and Forbes’. They are somewhat similar with a few surprises. Those rankings focus more on value. When we get farther down the list we begin to see more significant disruption. Rather than focus on corporate brand, the D100 metrics places more emphasis on brand names associated with specific products.

A branded product may have greater performance value at a given point in time than say an established corporate brand, which may have a high financial valuation.

InterBrand

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To see the global D100, as well as some national rankings, go here. (Tap on the upper right of the screen to pull down the menu.)

UK-based InterBrand’s ranking valuation-oriented brand rankings can be seen here.

Forbes’ top 100 brand values can be found here.

Forbes Top 100

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1,200+ Brands Examined

To construct the D100, over 10,000 consumers were surveyed across four global regions in five major markets including the United States, United Kingdom, Germany, China, and India. Consumers were asked questions on both global brands and market specific brands; in total over 1,200 brands were examined.

Image source: various websites associated with indices


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