Behind the Apple Award.

Yesterday, like most genuine innovation geeks, I was glued to my electronic device waiting to hear the verdict in the Apple v. Samsung patent infringement case in California. 

By now everyone has heard that the award was either $1.5 billion or $1.05 billion. One of the news reports is wrong. I believe the award was $1.05 billion.  

How do I know?

I was digitally connected to a person in the court room and via streaming tweets, I was kept current as the jury read each part of a multi-part verdict. I received updates every 30 seconds. It was a reporting innovation not possible only a few years ago.

I knew the verdict before it was reported in the AP alert.

The impact of this reporting made me realize how unnecessary AP reporters may become. 

Everyone with an iPhone, there is no equivalent now per the jury verdict, is a reporter. 

The newspapers have already taken a big hit with the Internet. For example,  I do not know of any one under 30 that reads the newspapers anymore, but now the news reporters may be replaced by on-the-spot reports from interested observers. That is innovation.

Regulations trump innovations.

More than 40 years ago, I published an article on Innovation Incentives in Civil Engineering magazine  The essence of the article was that Innovation had been killed by government regulations that prevented the patent holder from charging license fees that enabled the inventor to receive a reasonable return on investment. 

The premise for the article was that if a company patented an innovative process, the government required the patent holder to license it to a competitor, at a obscenely low fee, so the government could get competitive bids on the patented concept. The government typically requires competitive bids so a patented product must be licensed to a competitor to accommodate the government's bidding regulations. 

What the patent office giveth, other regulations taketh away. 

America's founders provided in the constitution a strong motivation to innovate. That incentive is being eroded by government regulations.

Do you have a similar situation in your business? Let me know.

Digestible Microchips-Innovation

The US Food and Drug Administration (FDA) has approved the first ingestible sensor. The Ingestion Event Marker (IEM), by Proteus Health, represents a new category of medical device: It is made entirely of ingredients found in food and is activated on ingestion.

The sensor resembles a grain of sand in size, is made primarily of silicon, and can be integrated into an inert pill or any other ingestible object (such as a pharmaceutical). 

A disposable patch is worn on the body to capture and relay the body's physiological response and behaviors. In addition to recording information from the sensor, the patch records heart rate, temperature, activity, and rest patterns. The patch lasts approximately 7 days and is operated by a battery, which also lasts approximately 7 days.

A mobile device is then carried in the pocket or purse to display data in context and support care.

The sensor can be used to detect the exact time medication is taken, as well as the unique identity of the medication. The information is controlled by the patient.

The IEM does not contain a battery. Instead, the fluids in the stomach power the sensor, and the body transmits the digital signal generated by the sensor. The IEM is the only ingestible sensor that is powered by the body. The sensor passes through the body similar to fiber.

You can read the full article at this link
  http://www.medscape.com/viewarticle/768665 

PARC is Innovation.. American style.

PARC, whose four-letter acronym stands for Palo Alto (Calif.) Research Center, celebrated its 40th birthday Sept. 23, 2010, with a half-day event at its San Francisco Bay area foothills campus. Now, in 2012, PARC is celebrating another milestone: the 10-year anniversary of becoming incorporated as a wholly owned yet independent subsidiary of Xerox. Currently, PARC has a long list of customers, but it still does most of its business with its parent company and government agencies. Its annual revenue is estimated at around $80 million. You may already know that many familiar IT standards were developed at PARC, including the graphical user interface for computers, laser printing, computer programming languages, Ethernet networking and VLSI circuit design. There also has been a lot of recent innovation at PARC of which you might not be aware. 

Google PARC and take a look.

Above article is courtesy of eWeek.com

A must read for the innovator.

Another dagger in Innovation's Heart.

There is a false belief that, the first innovator in, the real innovator, wins. As I recall, this was MBA dogma of the Boston Consulting Group and Morgan Stanley applied it to IPOs 20-30 years ago. 

Between 1970 to 1980, Morgan Stanley prided itself on only taking the first company in an industry public. Also, the first company often has a great idea, but takes the wrong road. See Buffalo in picture.

I worked for one of those companies so I know the story first hand. The rational was that the first company into a market space was the genuine innovator and would always dominate. In those days, we were the first in and Morgan Stanley did take us public. Poppycock now for sure. Now, the second or third entry into the market is typically the winner. 

You can research these on your own, but before MS DOS, there was CPM. Before Excel, there was Visicalc.  Before Windows, there was Apple. Before Apple, there was PARC . Before Google, there was Overture. Before many of the other tech giants, there was Bell Labs.

I could make a more extensive list, or you could, but you will find that the first mover principle has been replaced by the second or third mover, which enters the market place and forces the first mover to move over and get out of the way. 

The reasons for this are perhaps obvious to all. It is simply easier to copy things, then invent them, and when you copy things you can also improve them more economically. You can come up with some reasons on your own. The impact on innovation is negative. 

It is cheaper to be the watcher then the watchee. 

2-4-6-8 can America still innovate?

If you are genuinely interested in examining the slow demise of American  innovation and are not seduced by romanticizing the role of companies, or drawn into the unsupported cheer leading role shouting 2-4-6-8 Americans can still innovate, then you need to understand the following patent development metamorphosis.

Yes, my friends, the patent application process has morphed and not into a butterfly, but into a giant preying mantis which can devour the innovations of the unsuspecting inventor in a single bite. Here is the explanation.

Do you remember the phrase patent pending?

The phrase was placed on everything from games to pharmaceuticals to electronic devices. Companies that applied for patent protection for innovations placed the phrase there while they waited for their patent to issue. And guess what? While a patent application was pending, no one, but the patent department and the applicant could see the patent. The patent application was confidential. Rogue companies who might want to steal the patent information or look for opportunities to develop work around solutions to the patent, were denied this opportunity.

That was a good thing. And that good thing has changed.

When you apply for a patent today, within a few months anyone with a computer and access to the Internet can view the patent application. The United States Patent and Trademark Office opens their books, and your patent application to your competitors and anyone else who is mining information from the USPTO. Every technology company in the world examines this information in detail. It is a big business.

Of course America can still innovate, but the patent application information is transparent to our competitors around the world, before the patent is even issued.

Patent pending has been replaced by patent application viewing. And to you readers who missed the point, yes of course when the patent is issued everyone can see it too. But that takes several years and by that time, competitors have learned from the patent and likely improved the process. The inventor may get the patent, but it's too late to practically protect it, all theoretical legal arguments aside.

If you are in the innovation business and you do not understand the strategic import of this change, then you need to switch businesses.

Apple Patents, Samsung and Innovation.

This image is a single slide from a comprehensive slide presentation in the Apple Samsung courtroom battle. It enumerates just a few of the patents that Apple claims Samsung infringed.

There are more slides with more patent lists and more claims of infringement. It is a patent war of monumental proportions. And what is at stake is more than the issue of  who infringed who, but also the issue of American innovation in general. What price innovation, if the defense of such innovation is monstrous? Who can afford it? How many companies have the financial muscle and legal weapons to wage a legitimate defense?

As I understand it, the Apple presentation was a detailed look at Apple's portfolio of more than 3,500 patents and its focus on Google as the primary target. The 90 page presentation of which the slide shown above is only a single slide, lists 75 patents that Apple claims the Android OS infringes on.

Do not think for a moment that this level of patent litigation does not have a negative effect on innovation.The price, scale and future of American innovation is being fought in the courts. It is a worldwide battle between giant companies that have more cash than many countries. 

The battle is something to watch. If you are not following this battle as it unfolds, then you are on the innovation sidelines.

An Innovation Venue Tip.

I do not feel very innovative today. It is because I am sitting at my desk. 

I work at my desk. I am innovative in other places. 


Many people get their best ideas in the shower. I get mine when I am doing something not remotely associated with work. If I wish to go innovative, I go visit a museum. I visit an art gallery. I sit in a public library and feel historical words waft through the air. I read a patent. I watch a Will Farrel comedy routine. 


These actions vaporize the cobwebs of my brain and take me to spiritual innovation venues. I can not go innovative by desire.  For me, it is an event that naturally occurs when I release my brain from doing the daily drudgery of routine work. I change my venue and I change my thoughts. A walk in the park will often do it.


I worked with Mickey Slaughter an executive with the Kaufmann Foundation. He often said, he could not think strategically unless he was in the mountains.


Where do you think best? Plan? Innovate?

The GUTE of American Innovation

American taxpayers invest billions of dollars every year in federally funded research and development with little investment return. This book describes governmental policies, corporate and individual actions that can increase the benefits of these investments and renew the American innovation machine. The sale of the research bonds in California, while controversial in nature, is an innovative example of how targeted renewal can take place. While World War II was financed by savings bonds, the book argues for policies like innovation bonds to finance the fix of The Great Broken American Innovation Machine.


The book offers a Grand Unifying Theory and Explanation (GUTE) of extraordinary current events such as, the worlds largest and most successful computer company’s sale (IBM) of its laptop computer business to a small Chinese computer company, the annual creation of two million jobs by small businesses and the annual reduction of more than one million jobs by Fortune 500 companies. This book will help the reader understand the threats to continued American innovation in a global economy where the rule of law is the exception rather than the rule, and will provide specific methods where businesses can take advantage of gaps in the technology development process.

The book explains the rational for the coexistence of governmental policies supporting the economic benefits of job outsourcing and manufacturing by American companies in other countries with policies that could launch a renewal of the American innovation machine. The golden rule, that who has the gold rules, is true; and never truer than in the rise and fall of the American innovation machine. This book presents a compelling story laced with history, current facts and trends that affect you and your business.

This book explains how some companies, and in fact some countries, economically access billions of dollars in research and product development activities and how these companies are developing great products with razor thin product development budgets. Governmental regulations typically reward the follower and penalize the innovator. No doubt your company faces innovative gridlock. New products are expensive to develop, more expensive to defend in court and usually easier to copy than develop. The monopolies granted by the patent department are excised by the courts or by the anti-trust department. The book offers the reader suggestions how to use these facts to make the best decisions.


Contact me if you wish a copy of my book.

European Innovation.

If you wish to know why you do not want a society like Europe, take a look at the attached article on Innovation in Europe and America. 


Europe stagnates. 


America still innovates. 


But Europe could happen to us.



http://www.economist.com/node/21559618?fsrc=nlw%7Chig%7C7-26-2012%7C2899296%7C37582838%7C

Innovation. Apple or Samsung?

In a suit headed to trial next week, Apple will ask for $2.5 billion on claims that Samsung copied features of the iPad and iPhone in some of its Galaxy products. 

The thought of these two corporate gladiators clashing in a legal coliseum, and Apple with more than $100 billion in cash, is enough to make innovators reluctant to innovate. Either gladiator could crush a business with legal briefs.  Never forget the nominal price of innovation must include the phenomenal price to protect it. 

My view is that this litigation is not so much about iPhones or iPads, it is about TVs. Apple wants into the TV market, dominated by Samsung, and wants Samsung to let them in without litigation. 

Apple and Samsung will ultimately split the smartphone market and the TV market too.

Watch for this litigation to be settled about the same time Apple starts selling TVs.

Needed. A Big Harry Audacious Goal.

Innovation is usually sparked by a goal. 


Or at least by solving problems that prevent us from reaching a goal. Landing a person on the moon and bringing that person safely home in a decade was a goal that sparked innovation because there were so many problems that had to be solved to reach that goal. 


American innovation needs a Big Harry Audacious Goal. Cure Cancer. Feed the world, or at least America. A national wireless communication system that enables Internet access anywhere, anytime and by anyone. An online educational institution that brings the best teachers to a student in the most remote part of the world anytime of the day. Webcams that allow Americans to visit our national parks anytime of the day.


The goal should have a time element and be measurable - two critical components of a goal. 


Do you have a BHAG in mind? Please let me know.

Innovation is outdated.

Everyone is jumping on the innovation bandwagon. From government to the CEOs of major corporations, the new feel good management concept is innovation. Innovate or  die is the mantra of the elite. The road to riches is through the holy grail of disruptive innovation. Disrupt or be disrupted so the mantra goes.


Poppycock, I say. 


A Google search on innovation produces millions and millions of results. Everyone is writing about it, talking about it and testifying about it. I am only waiting for the POTUS candidates to make innovation a part of their political platform. In their case, innovation might take the form of debating the issues rather than debating out of context text.


And for the most part. The innovative innovation experts focus on technology innovation. However, the economy cries out for innovation in supplying food and shelter to those who need it. Innovation in providing food and housing is not as fascinating as a smartphone that knows where you are, knows what you want before you want it, pays for it when you have no money and sends it to you.


Real innovation for me is supplying food to the foodless and providing shelter to the shelterless at costs that decrease every year just like laptops. We need an innovative Moore's law that allows the farmer to supply twice as much food at half the cost every 5 years. We still make steaks the same way too. The same for housing. We could sure use some innovative financial tools to solve that problem.


We need to redirect innovation back to the basic parts of life. Despite rhetoric to the contrary, I can get along without my smartphone, but I still need food and shelter.

American Innovation and Education

The education system is defunct.

The teaching unions have caused large cracks in the American Innovation Machine. Teachers seldom get fired, and there is no correlation between producing good students and teacher compensation.  Our state representatives allocate millions of dollars to build state of the art educational buildings, then pay teachers less than a McDonalds manager. 

Our colleges pay athletic directors more than $1 million per year and our top math instructors less than $80,000. No other country has this situation. In many countries, great national prestige is accompanied with the title professor. In this country, the position is maligned with quotes like the “Professors live in an ivory tower”, or “Those that can do work, those that can not teach.” 

The teacher's union bear the full responsibility for a  decline in education in our schools.  A brand new teacher with no experience has a staring salary of $30,000 per year. A teacher with 30 years experience makes $48,000  per year, which represents and annual increase in salary of less than 1% per year. Bad teachers and good teachers make the same salary. Teachers who grade papers at home make the same salary as teachers who do not. The teaching unions while making great noise over accountability really have none and pay is based on time in place rather than the production of great student And here is the final rub. 

The unions in most states are so strong that a person with 20 years of mathematics experience in a business environment, of giving seminars on math to hundreds of people is barred from teaching math in high school because he/she does not have a teaching certificate. The teaching union is not unlike the unions of the 30’s and 40’s—they did a great job for awhile.

The teaching unions are a barrier to providing the best teachers for our students. When was the last time you heard someone say they wished to grow up to be a teacher. Even the TV shows about teachers depict most of the typical teacher’s day “ Babysitting” rather than teaching.

Innovation PARC Bell Labs

I have been thinking about innovation more than usual. Is it really an individual activity as we typically think, in the spirit of Steve Jobs or Edison?  Is the government responsible as Obama has been accused of believing? I have another non-partisan view.

There was a time when American had two great idea machines-Bell Labs and the Palo Alto Research Corporation, better known as PARC. Bell Labs was in the East and PARC was in the west. One or the other of these two genius factories were behind most every innovation I can imagine in the last 40 years. There are already some great books on the subject detailing the innovative products from these two marvelous innovation machines. From the Internet to Computers, it started in these places. Apple made the money from the graphical user interface, GUI as it is called, but the concept was developed at PARC.

PARC was funded by Xerox. Bell Labs was funded by the original, pre-split-up, Ma Bell company. The culture of innovation at these places has never been duplicated and they do not exist in their original form anymore.

And with their demise, American innovation is looking for another place to spawn.

Have some fun. Google PARC and Bell Labs.

American Innovation is Broken.

       Our founding fathers spawned a constitution that recognized and rewarded innovation. From the isolated plains of America, they gave birth to the great American innovation machine.  The machine has worked like the proverbial Swiss watch providing a seemingly timeless environment for the innovative capabilities of Henry Ford, Thomas Edison, Thomas Watson and Benjamin Franklin to name a popular few. The American innovation machine has created more jobs and wealth than the combined totals of 50 other countries of the world. For two hundred thirty years, it has kept the correct time. We could always depend on the American initiative. Every President has told us so. From the building of a vast transportation system which was the best in the world, from JFK inspiring us to go to the moon, it has worked. But just like the Swiss watch the innovation machine has been passed by. The machine is broken.

       The last 40 years have witnessed an unprecedented decline in American innovation, often explained by characterizing the decline as a natural expansion of the global economy. In retrospect the decline is indisputably visible, but along the way the decline has been camouflaged by many other public policy matters. Scientists have concluded that the grand canyon was created by water weathering away rock, the evidence is indisputable. However, I have stood on the Grand Canyon floor for several hours and never noticed any difference. The decline and fall of the great American innovation machine is just like that - imperceptible changes in foresight, but indisputable damage in hindsight. 

       The great American innovation machine is broken. We have regulated, cajoled and rationalized ourselves into innovation oblivion. We are in taxi-cab gridlock in New York City in Times Square at 5PM Friday afternoon trying to get home to Connecticut. We are moving, but we are not going anywhere, nor will we get there on time. And like the Swiss watch, innovation has passed us by so swiftly, so silently that we did not see the movement. 

       Follow this blog. And I will explain what needs to be done to fix it.

Innovation and America

Where have all the buffalo gone?

Wake up, get up, wise up, do something. If your eyes are open, then you have seen the results of the great American innovation machine. From cars to planes, trains to computers, vacuum cleaners to washing machines, microwave ovens to toys, from polio vaccines to band-aids--no one, but no one has gone untouched by the great American innovation machine. We used to make it all. We certainly thought up most of it. Thousands of books and hundreds of movies have chronicled the innovation machine for the last 50 years. World leaders have heralded our successes and labeled us the innovation giant.

       But wake up and wise up because it just ain’t so anymore. Like the Buffalo, the innovation machine has silently slipped into a myopic memory icon. We know the Buffalo were here we just do not know exactly what happened to them. Pick up the latest toy or electronic game and we don’t make it, we don’t even think it up. Somebody else does. And by the way more power to the innovators what ever country they live in. 

       The issue of the great broken innovation machine is not where the least expensive labor or materials are located, the issue is why we are not innovating things that create industries any more. Of course, the skeptics will all launch their anecdotal missile exceptions like Google or Microsoft, but keen observers will not be misdirected by this sleight of hand and adsorb the larger picture. McDonalds is one of our nations largest employers. So is the government. One out of every 10 people are employed by a local, state or federal government. The last time I checked the government does not make anything and innovation is not one of its skills either.

       But make no mistake about it the government’s role in the creation of the great American innovation machine is awesome and pervasive. Its role in breaking the machine is not without evidence also. But do not think for a moment that I am going to join the popular position that the government, whoever that is, is the real culprit because the last time we checked this situation too; we, that is you and I, elected these public officials ourselves. There is no corner to hide in and escape the blame.

It is up to us to reclaim the great American Innovation machine too.

American Innovation and Bayh-Dole Act

The 1980 Bayh-Dole Act launched numerous technology commercialization programs at American universities.  According to the Association of University Technology Research, more than 225 universities receive approximately $30 billion in federal grants and receive more than $2 billion in royalties from more than 3,000 patents or other intellectual property licensing agreements. 

Unfortunately, despite this activity and setting aside academic arguments for basic research needs and indirect spin-off jobs in the private sector, a $2 billion return from a $30 billion tax payer investment is a ticket to bankruptcy by most corporate financial benchmarks.  Further, despite dramatic changes in the innovation landscape, there have been no significant modifications in the Bayh-Dole act in 30 years targeted at improving these results.

     Additional financial returns are “roadblocked” because there is no effective/efficient method for private sector businesses to match university research with business’s commercialization potential. For example, a business in Pocatello, Idaho has no way of knowing that a federally funded university research project at the University of Florida in Gainsville, Florida has developed a technology that matches the needs of the Pocatello, Idaho business’s needs. 
     A national research data base Internet accessible by small and large businesses would break this “roadblock” and release the full commercialization potential and intent of the Bayh-Dole Act. This initiative would solve several problems that currently face universities that are trying to commercialize technology. There have been several attempts to establish just such a network but no well funded national program has evolved.

    The Bayh-Dole Act should be amended and $100 million allocated to establish a comprehensive program to accelerate the commercialization of university technology. To do less is to keep sending $30 billion of taxpayer research into empty space.