View From The Bridge

A "Boulder Troll" View From The Bridge

I went a little deep on the whole "troll" thing, so when I saw this story today from nearby (and wacko) Boulder, I just had to post it. Particularly after a friend noted the connection with my posts, my blog title, and my geography.

Original link is here, but I just cut and pasted the sucker as it's too funny to make you click through...

Trolls On The Bridge!

Just a day after the public anguish surrounding the appearance (and subsequent arrests) of disrobed cyclists on World Naked Bike Day, Boulder has a new crisis on its hands: bridge trolls.

Fueled by a couple of tabs of LSD and brandishing broken golf clubs, 19-year-old Robert Hibbs, of Boulder, installed himself on the pedestrian bridge over Foothills Parkway and started demanding a dollar from each pedestrian and biker attempting to cross. When the police showed up, as they invariably do in such situations, Hibbs called himself a troll and insisted that he owned the bridge, according to Jeff Thomas, writing for YourHub.

According to Hibbs' fellow-troll Bradley Boville, the decision to commandeer the bridge arose from a dilemma we all find ourselves in from time to time: "The two had rolled a big joint," Thomas reported, "and found themselves without either a lighter or a dollar with which to buy a lighter."

PatentSmack.com - Crowdsourcing the patent application process

My previous post on how to potentially re-shape the patent application process has continued to chug along in background processing lately, and I'm increasingly convinced there is a big idea here trying to break out. It was with great fascination that I read the recent Jeff Howe article in Wired on Crowdsourcing (see also Jeff's blog), and a few more pieces clicked into place for me.

There has to be a way we can leverage the collective intelligence, viral networking, asynchronous notification, search and collaborative aspects of the web towards doing a better job at rejecting anticipated or obvious inventions. Crowdsourcing is an intriguing way to think about doing this. One might actually wonder if software patents would be an ideal place to start the experiment since (a) it's a long wait to the first office action, (b) it's the most problematic space right now (see various posts by Feld, Wilson, comments by McCall, etc.), and (c) there is great cultural and skills alignment between the leading edge of technology tools and software engineers/firms ensuring the best litmus test for all field classes.

I'm thinking I'm going to work up an outline of how the system could work and put up a wiki or some such web-editable document at patentsmack.com* in my spare time. Anyone interested in contributing can just edit the outline directly (assuming I can pull off the tech aspects of the job).

Here are a few of the latest puzzle pieces bouncing around in my head:

1) by publishing patents sooner, we can get a better read on the state of the art at the time the patent is filed. Makes searching more current and creates a reasonable window for the "comment period" before the examiner reviews the patent. It's almost like the comment period for government agency regulations. With product lifecycles acclerating, an 18-month confidentiality period is increasingly useless. And, this is entirely consistent with the reason for being with patents -- to advance the state of the art through disclosure. I know from the EIP perspective, I'd rather have a trial by fire and patent in 12-18 months vs. a game of cat and mouse and a possible (more likely?) patent in 36-48 months that a not insubstantial number of folks think they can blow up anyway in litigation.

2) if we add in an element of commerce to the prior art searching, we can increase the crowdsourcing beyond just those companies who may compete in the relevant field. What if, for example, the USPTO said: "if you pay an extra $1000 when submitting your patent, we will publish it in 6 months, post it on patentsmack.com, and guarantee review within 18 months." Then there's upside to the inventor (faster time to certainty) and there's the beginnings of an economic incentive for crowds to participate. Payouts to commentors would be a function of whether your comment/post was cited by the examiner in a final rejection letter.

3) what if we can ADD money to blow up a patent? That is, company A files for patent X. Company B learns of this patent app, and ups the ante by contributing $10,000 to anyone that can blow up the patent. Now the plot thickens -- we've introduced commerce to the equation and enabled weekend and late night individual contributors to the game. If cited in examiner's rejection, you get $$. If no new art on patentsmack.com is cited, money goes to USPTO. That increases their budget to increase the examiner payroll and to work down the backlog of patents.

I've gotta get back to my day job, but I do think there's something here...

* note: patentsmack.com is purely illustrative. I have no interest or desire to build a business around this concept and do not intend the above to be an advertisement or trial balloon in any way.

** Brad Feld, Fred Wilson and Matt McCall, you guys really should incubate a company like patentsmack.com... I'll even contribute the domain for 1 preferred share :)

Size the Opportunity - Cheat Sheet

Matt McCall, an investor in EIP and good friend (and fellow Kellogg MBA alum!), recently wrote a great blog about how VC's look at businesses to invest in. See Scalability -- P*Q

We run into exactly the same thing at EIP -- how well does a product concept scale? And we recently updated all our product submission and public speaking decks to reflect how we evaluate market sizes for products. We see a lot of inventors that believe their product will take 1% of a big market and is therefore a huge idea. As Matt says, top-down models don't work.

In our world, we ultimately take Matt's model of P*Q down a layer and view it this way: target market size * awareness * distribution * trial * price + [repurchase rate]. That is, how many people are in your target, are aware your product exists, can buy it somewhere, and what % of people indicate that they'll buy it when you do some surveys with random consumers (never trust your friends and relatives). Then we factor in repurchase rates for products that are consumable. This can get highly complex and folks like AcuPoll and BASES will do a wonderful job making highly accurate forecasts.

But, I'm going to give every budding inventor a cheatsheet here. We can simplify the above to X * R * 0.04 where X = number of customers that you think are target customers (US only) and R = price point of your product at the store times the number of times a year the consumer buys it.

I won't bore you with the math, but trust me when I say it works surprisingly well (feel free to email me and I'll send you the details). Using this model, if you can get over $30m a year, we're definitely interested, as is almost any branded manufacturer...

RSS, Web 2.0 & Patent Reform?

My brain has been wrapped around how to improve the patent process to minimize "bad" patents and solve for the mess that we've gotten ourselves into lately with nuisance patent lawsuits and overall frustration with the patent process (not the least of which is the 5+ year delay in many cases).

And I was struck by a thought: Could RSS and some of the new Web 2.0 technologies hold a key?

Here's the angle: most patent frustration revolves around when people file for (and receive) patents on what many folks think is obvious technology (or, alternately, is already disclosed in the prior art). The problem is proving obviousness/anticipation after the patent issues -- not a cheap proposition and time-consuming. As well intentioned as patent examiners are (and often times they're quite skilled despite criticism), they simply can't know everything.

What if we (the US) changed the rules on patent publication such that they are published after 6 or 9 months rather than today's 18 month wait? And what if we (someone) builds a RSS feed with keyword capabilities as well as a mini-Digg-like service where users can "nominate" a patent for obviousness and prior art to highlight it to a broader community so it can get blown up? Under this scenario one can easily "monitor" patent publications for fields, words, products, capabilities, etc. that map to one's particular area of interest and expertise. Think of it almost like Wikipedia for patents...

And what if we add to this by enabling anyone to put comments in the record of the pending patent pointing to additional prior art, making obviousness arguments, etc.? Of course registration would be required prior to enabling commenting to eliminate spam (and perhaps we'd need to use lawyers/patent agents to do the actual posting if stupid commenting got out of hand), but just think if by the time the patent examiner had a chance to review the patent the global community had an opportunity to present additional information to the patent office? Wouldn't they be in position to make a much better determination of novelty and non-obviousness with the broader comments? The patentee would have the opportunity to respond to all the comments and have that much more confidence that their patent isn't going to get blown up after issuance if they really have something novel.

Hey all you Web 2.0 & RSS companies and venture capitalists out there, I'd love to hear what you think...

In Defense of the Trolls - Part 4 (Final)

This is my last post in the series, and my objective will be to demonstrate why I think trolls are a good thing, provided that we (collectively) can clean up the issuance of bad patents.

What if we fast forward and ask "what's the world like without patent trolls?" I think we will all be unhappy with the result. It's a world where the only way to profit from your invention is to practice it yourself and build a business. Because in the absence of trolls, BigCos will happily ignore your patent and copy your invention all day long -- it's all upside to them as (a) they don't have to pay a license fee, and (b) they know you can't compete against their scale, relationships, etc. Game-set-match to BigCo; the really smart ones will let you start to build a business and prove the market exists, then crush you when they enter. And without a patent troll on your side, too bad for you -- them's just the breaks small guy.

Pareto Optimality and the more general theme of economic efficiency throw up all over this required linkage between the inventor and the business that makes/sells it. If I simply suck at building and operating a business, shouldn't I still be rewarded for my contribution of the invention? If I'm particularly good at inventing things, and you're particularly good at making/selling them, a troll exists to make sure that the leverage in a negotiation is appropriate to the value of the idea. Those that wish for the elimination of trolls will get a world where the inability to profit from issued patents chills and shrinks the invention and innovation pool and gives existing companies way too much leverage and strength.

The trolls keep everyone honest. If you are late to the innovation party, you have to pay the price of copying other's inventions. You get the benefits of being a fast follower, but you have to pay up for that benefit. For trolls act as free-market police against bad actors who just steal or ignore the rights afforded in a patent. It really is as simple as that.

Do the trolls play a nuisance game? Of course they do. And I'll be as angry and pissed off when I'm subject to a nuisance suit as I am sanguine about my macro view of the importance of trolls. But if you play out the game of chess, I submit that trying to eliminate trolls has a much higher long-term consequence that is negative than finding ways to limit their game to true invention that is worthy of a patent...

I admit that I've stayed at the 50,000 foot view here, and there are some subtleties when you dig into enabling technology patents (where a patent covers a small step in a bigger process/system) and when you live in a world of software patents, which I think is a really challenging area right now. But the world is soooo much bigger than high tech, that we shouldn't let the high tech giants control the discourse on the very important issue of patent trolls...

I look forward to any comments on what I've missed or how to better solve for trolls without having negative long-term consequences for the individual inventor or small startup.

In Defense of the Trolls - Part 3

Now that I've thoroughly gone off the deep end by defending patent trolls and taking a detour through the world of product invention via the courts, it's time to return to my original thread. Recall my "Game Theory of Patents" where patents can only be insurance or threats? What if, in combination with additional intellectual property, a patent becomes the foundation of a viable business threat? I firmly believe that the reason we don't see more patents as business threats is because too often the patent stands alone as a property right and it's surrounded by all sorts of emotional utterances (e.g., "I just know this is going to be huge" or "everyone I ask would buy one" or "I don't know what it will cost to make it, but I'm sure the profits will be huge"). But there's no data to go along with the patent -- so there's no credible business threat. Standing alone as a patent, in the absence of infringers, there is neither a credible legal or a business threat; the patent is worth little more than the paper it's awarded on...

However, what if we combine the foundational patent with additional intellectual property? Such as real market research (e.g., concept/usage/volumetrics), real product design work including prototypes and CADs, some wickedly clever additional patent applications that expand the fence, and perhaps even some brand and packaging insight? Can we make the product opportunity a business threat?

If we succeed in our "commercialization steps" we create a sufficiently compelling business opportunity that is a credible business threat in the sense that now market entry is almost certain: BigCo A, BigCo B, DRTV/infomercial company C or startup D will launch this product because the economics are known, the manufacturing method is known, the consumers have said they'll buy it, etc. And, to top it off, the product opportunity as outlined in the patent and the additional intellectual capital will have both a time to market and a legal advantage over trying to compete against it.

At this point, the business threat combines with the greed factor (and ideally, the ease factor as less work is now required to bring it to market). If we can turn the product license sales pitch into what is essentially an M&A auction, we have dramatically shifted the odds towards a license transaction. We create urgency by shaping a product opportunity into a reality: someone is going to own this and bring it to market. Fast. And those who don't license it will be forced to design around it (which is generally do-able, but will slow you down and likely increase your COGS if we've done our job right).

So here's the business threat laid out there: "Will it be you or your competition?"