Tag Archives: Forbes

EFF’s narrow position on university tech transfer is “wildly misguided”

The Electronic Frontier Foundation (EFF) is attempting to paint a scarlet letter on universities with public funding who benefit from sharing discoveries with those best-equipped to monetize them.

The organization’s suggested sanctions for those schools that out-license research has been described as “preposterous,” and its condemnation of licensing specialists “wildly misguided.”

This is according to Richard Epstein, a highly respected professor of Law at NYU, senior fellow at the Hoover Institution, and senior lecturer at the University of Chicago Law School, in a recent Forbes piece.

Epstein say that the EFF equates all non-practicing entities (NPEs) with so-called patent “trolls” looking to game the system. In fact, a relatively small percentage of NPE suits are filed by those “black hat” businesses with a18063d135cfa169c2f96cce4d167ccdquestionable patents seeking a nuisance settlement.

Recently, the Electronic Frontier Foundation published an extraordinary request to research universities as part of its “Reclaim Invention” campaign: please stop putting your patents into the hands of insidious patent trolls.

EFF, writes Epstein, seeks to put teeth in its proposals by asking state legislatures to enact statutes “to bar state-funded universities from transferring patents to patent-assertion entities, broadly defined and branded as trolls”.  It proposes that these transfers be null and void if they do not meet statutory criteria, and suggest that the universities in question be punished by a forfeiture of research funding and student financial assistance.

In the eyes of the EFF, universities should exercise a higher sense of social responsibility and only sell or license their patents to those companies that “will actually do something with them.”  In its view, universities should resist the temptation to license their patents to the highest bidder. Really?

Its manifesto linking patents and NPEs with important research that is less likely to be shared for the logo_fullbenefit of the community can be found here. EFF sees patents and those who choose to share them through licensing as roadblocks, not bridges.

Blunt Condemnation

Epstein is blunt in his condemnation of the EFF’s proposal: “The first error lies in EFF’s over broad claim that equates NPEs with patent trolls; the second error is to assume that universities have some particular expertise in licensing these patents to potential end users; and the third in its wholesale condemnation of patent enforcement through litigation.”

The Forbes piece can be found here; the EFF “reclaim invention” proposal here. Both are worth reading.

The path of innovation is complex. A short-sighted position regarding who should benefit most from public research funding is self-deafting.

Image source: forbes.com; eff.org

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

Taylor Swift assists recording artists, Apple Music, and (even) herself

Taylor Swift, a pop star with sufficient power to move mountains, succeeded in moving an equally resolute object last year: Apple Music’s position on paying royalties to recording artists. 

A year later it is unclear if was the musicians, Apple, or Swift who benefited the most.

A Wall Street Journal op-ed last week reminded us that there are more important things to cover other than Kardashian/West war of words that the combatants and media are jointly milking.

In Support of Taylor Swift, Economist, Hong Kong based op-ed writer David Feith says,”Never mind the feud with Kanye West, the pop star has waged more important fights defending the value of intellectual property.”

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The Top Earner

Forbes ranks Swift as the number one celebrity artist in 2016 with $170M in earnings. According to the magazine she is in the top 100 of self-made women and power women.

Swift has sought to champion the IP rights of recording artists by using her star power to assure that they (not she) are paid. That’s admirable, for sure, as the streaming services, Pandora, Spotify and YouTube, to name a few, have built valuable businesses without paying their fare share of artists royalties. (YouTube has been valued by Bank of America at $80 billion.)

But maybe Swift was at least somewhat motivated by dollars, not sense.

After outing Apple Music for refusing to pay artist royalties in a now infamous tumblr post, Swift wound up receiving not one but two spots from the company, promoting their new streaming service. I guess they were more interested in thanking her for the exposure than punishing her for the dis. Both ads went viral generating huge attention for Apple Music and her. Good timing, I guess.

Here is the latest Taylor Swift Apple Music ad, which generated more hits than most TV series (via Fortune).

Below is the original tumblr piece in which Swift challenged Apple – and the stream industry – to change their music rights policy. Swift won more than the argument, and so did Apple. The argument is well-stated:

 Free-riders come in many shapes and sizes

“This may be the ‘information wants to be free’ era, when online content is glibly swiped by millions who would never dream of shoplifting,” said WSJ’s Feith, “but Ms. Swift has a deep appreciation for the profit motive and the fruits it bestows on society.

“Ms. Swift’s most ambitious [IP] crusade may be in China,” writes WSJ’s Feith, “where she has launched branded clothing lines with special anti-piracy mechanisms to combat rampant counterfeiting on e-commerce sites like Alibaba’s Taobao.”

Swift has been known to trademark not song or titles, but phrases from songs which can be used to build her brands and fashion portfolio.

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I hope that Taylor Swift invents something soon, so she can bring her loyal following and keen business instincts to patents and patent holders. They sure could use them. 

Image source: appadvice.com 

 

Fintech patent competition: fierce, diverse, growing

Among the most watched areas for new patent value is financial technology, covering inventions in areas like authentication, mobile payments and wealth management.

Fintech is among the few bright spots in the patent landscape, with leading banks like JP Morgan, Bank of American and Wells Fargo, and credit card companies like Visa, MasterCard and American Express deeply involved and competing with a broad range of new entrants, including:

• Traditional banking industry vendors such as Fiserve and IBM

• Scores of venture funded start-ups, some supported by former banking executives

• Established technology players such as Apple, Google and Amazon looking to capitalize on their   consumer recognition by expanding into banking and payments.

Close behind is leading Korean bank Shinhan and Bizmodeline Co., Ltd, a Korean company with a total of 2700 patents, 1000 patents related to Financial and Billing, 1400 patents related to Mobile, Ubiquitous, RFID and NFC, 300 patents related to authentication and other technologies. A host of Japanese companies, like HitachiToshiba, Sony and NEC, have become more active in identifying and developing inventions in the transaction space; Microsoft, too.

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“Start-ups, big tech and… banks,” in the current IAM magazine, The Intangible Investor, looks at the diverse competition in this space. (Subscribers can find the piece, which I wrote, here.)

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For more good background, “FinTech: An IP Perspective,” is a comprehensive report from IP research firm, Releclura. It outlines the players in the space and details the patents they have accumulated and in which areas of banking or transaction. The report can be found here.

A summary of the Relecura research compiled by IP consulting firm Aistemos, with charts and graphs, can be found here.

Execs Poised to Profit

According to The Financial Times, former banking executives are all over fintech startups, hoping for a big payout. See “Former Wall Street titans shake-up banking with fintech investments.” 

In the Wall Street Journal, “Banks and Fintech Firms’ Relationship Status: It’s Complicated,” discusses how disrupters and big lenders, often seen as rivals, are finding some success playing together.

Top holders

Fintech upstarts have attracted more than $50 billion in investments on the premise that they will disrupt banking and finance the way Uber or Airbnb have the taxi and hotel industries. But despite a decade of stumbling the banking industry has proven a tougher business to crack than some had thought. The American Banker speculates that the fintech sector may be overheating.

“’It’s too simple to say all these banks are stupid,’” says Qasar Younis, a partner at the Silicon Valley seed fund Y Combinator.

Like Big Pharma

The banks, much like some of the pharmaceutical companies, are smart enough to know that they will not be able to come up with all of the technology solutions they need to succeed, and that they have the capital, markets and regulatory savvy that others need.

For more information, Forbes’ top fintech stories for 2015, go here; their “Fintech 50” also provides a good overview of the up-and-comers, here.

Image source: americanbanker.com; CB Insights; Relecura 

 

Poor ROI from top R&D companies is a red flag, says Forbes columnist

Which companies are truly (disruptively) innovative and which are merely using their R&D to maintain a low-growth franchise has become the subject of worthy debate.

Forbes columnist Alan Hartung, believes that some of the largest tech companies – not coincidentally some of the biggest R&D spenders and patent holders – are the worst investments for shareholders. And he has data to back it up.

In a compelling column here Hartung argues that big companies want to spend to keep themselves in business, not to break new ground and grow significantly. Companies best suited for that are sometimes spending their R&D dollars more wisely.

Moribund tech leaders try invest in startups, Google and even many others do, or buy companies through M&A like Pharma companies do, but they tend to wait to secure others’ success rather than initiate their own, similar to when they were start-ups. .

“Most big R&D spenders are not really seeking innovations” says Hartung, a business growth expert.  They are spending money on historical programs, following historical patterns and trying to defend and extend the historical business.  In other words, they are spending vast sums attempting to sustain (or recapture) historical success.  And, as the list shows, largely doing a pretty lousy job of it.

A more effective formula for innovation/IP management today could be expressed something like this:

R&D + IP rights (+ M&A) = >ROI

Top R&D Spenders

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IP rights without the right timing and reliability do not mean much. It appears from Hartung’s timeless 2012 story that in most cases extraordinary R&D spending is no guarantee of success. In fact, he thinks it is an indication of weakness. The really great innovations are not necessarily about spending more. Besides, much of R&D is accounting anyway, with little R and a very big D when it comes to costs.

  • Microsoft is #5, spending $9 billion and nearly 13% of revenue,” write Hartung.  “For this massive investment customers and investors in 2012 received —- updates to the aging operating system and office automation software.  Updates which failed to register favorable reviews by industry gurus, and are considered clear updates – but far from innovative.  And Nokia, which is so floundering some consider it a likely bankruptcy candidate, is #7! Despite spending nearly $8 billion on R&D in 2011 Nokia is now completely reliant on Microsoft if it is to even survive.”

Innovation and IP Needs

It’s difficult to believe that a business today, no matter how smart or solvent, can fill all of its innovation and IP needs internally. Hartung is suggesting that companies that believe they can by outspend each other on R&D are effectively chasing their own tail. That’s why they are bad investments.

Image source: BusinessInsider.com

Rohrabacher to Congress: “Don’t let the ‘Innovation Act’ be a part of our legacy”

Not everyone agrees that another round of patent reform is necessary at this time.

Doubters believe that the Innovation Act, H.R. 9 in its current form, will not improve the United States patent system, but merely make it more acceptable to some of the businesses threatened by it.

Three recent articles make compelling arguments against the current bill, which is largely identical to the one (HR 3309) that passed the full House in late 2013 that died in the Senate

Thirteen-term Congressman Dana Rohrabacher, (R-Southern California), is not a supporter of this bill. His recent op-ed in The Washington Times is worth reading. It’s called “Patent ‘reform’ is killing the right to invent – How a congressional misstep could imperil creativity.”

“Just because a measure holds itself up as ‘tort reform’ should not mean it escapes the scrutiny of free-market Republicans. It should instead call for a skeptical second look, and then more throughout its progress. Guaranteed: Such close-eyed analyses of this bill will encourage deep suspicion…

“This Republican Congress must not allow this creativity-killing legislation to be a part of its legacy.”

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Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical 3_1_2015_b1-rora-patent-law-8201_s878x512subjects. He believes even more strongly than Congressman Rohrabacher that H.R. 9 is not the bill necessary to move the patent system forward.

In fact, its restrictions will move it back, and make the U.S. less competitive with other innovative economies.

“The situation is dangerous, says Epstein, because Goodlatte’s bill violates three fundamental rules of legislative reform,” Professor Epstein wrote recently in Forbes.

“It moves too quickly.  It develops a set of unneeded ad hoc rules for patent litigation.  And it has a multitude of costly but unnecessary procedural innovations.  Viewed as a whole, the Goodlatte bill combines dangerous rigidity with excessive discretion.”

The article is called Patent Law Gone Awry.”

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In a recent PatentlyO Ted Sichelman, of the Univeristy of San Diego School of Law, says the proposed Innovation Act’s “fee-shiftng is biased and against patent holders,” and that it will likely lead to increased PAE (patent assertion entity) activity, not less. 

“The upshot of these provisions,” says Sichelman, “is to massively skew fee-shifting against the interests of patent holders, leading to an asymmetric risk that would very likely cause risk-averse inventors and assignees to avoid directly enforcing their patents, sometimes even strong ones.” The article can be found here

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Congressman Rohrabacher’s and Professors Epstein’s and Sichelman’s recent pieces make for interesting reading, especially if you are among the many who are concerned about how new ideas get nurtured and shared.

 Image source: The Washington Times

Patent “War” Launched by Billionaire Allen

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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