Free Prize Inside (Book Review)

I recently read Seth Godin’s Free Prize Inside.  The publisher had actually sent me a review copy back in 2004 when I was reviewing books for American Lawyer Media’s Patent Strategy & Management.  At the time, I didn’t really give much thought to reading it because I thought of Seth Godin as a marketing guy and I wasn’t all that interested in marketing books.  As it turns out, the publisher knew what they were doing when they sent it to me.  It is really an innovation book that happens to be by a marketing guru.  So, I am a bit late getting to it.  My apologies to Seth Godin.

While it is very much an innovation book, the author states in several different places that it is not about patents or that kind of innovation.  He positions the book as being about “Soft innovations” that anyone can do in any market.  And, he specifically tries to distance such work from difficult technical innovation that you might file patents on.  I found this interesting for two reasons. First, even as he was writing it, people were pushing more and more software and business method patents that were pretty “Soft” through the Patent Office and more and more companies were looking for patentable inventions throughout their organizations, not just from R&D teams.  Second, the real focus of the book was about championing innovations and getting them taken seriously within an organization, which applies equally regardless of whether there is a patent involved or not.  I suspect that the “no patents required” positioning had more to do with being approachable to non-technical innovators (who are a much larger market of readers) than anything to do with patents.  This is all a very long way of saying that the book has very useful lessons for patent owners and managers and is worth reading if you are interested in how new projects and innovations can happen in your company.

The bid idea in the book is that historical big bet innovation strategies are not cost-effective.  Both big advertising and big R&D are too risky when you figure in how much more money you need to make to really profit from them.  Big approaches drive up your expenses, so making money with them is difficult.  Small innovations that provide unique customer value are really where it’s at.  He then provides interesting frameworks for both championing your innovation and for finding really good ones.  Both of these frameworks are well worth the read.

The book is short.  Seth Godin is an entertaining writer.  I am still mulling over how to use some of the ideas from his frameworks to help organizations gather and assess new ideas for features, products, and patents.  If you share my interest in encouraging innovation in your company, I hope you will read the book and share your thoughts on what it means for patent management.

Incidentally, the author defines a “Free Prize” as an innovation that creates revenue far greater than its cost of implementation.  Under that definition, what business executive doesn’t want to create more free prizes for their company?

Where Good Ideas Come From (Book Review)

Does the environment in your company, industry, and society foster innovation?

Here are some concepts to help you answer the question for your business.

Where Good Ideas Come From, The Natural History of Innovation

Author: Steven Johnson
Published: 2010 Riverhead Books (Penguin Group)

I loved this book and would recommend it to anyone interested in innovation and how to make a more innovation friendly environment.  If you are a technology executive interested in making your company, industry, or society more innovative, this book will give you some great places to start.  On top of that, it is simply well-written, full of great stories, and a fun read for fans of science and technology.  Since it is a New York Times Bestseller and Economist Best Book of the Year with positive reviews from major newspapers and magazines across the country, it hardly needs my endorsement, but I give it none-the-less.

The big idea in the book is that there are innovation patterns that can be seen in nature, history, and modern business.  By identifying and naming those patterns, then looking for ways to cultivate them, we can make our environments more innovative.

I don’t want to steal the author’s thunder by sharing all of the patterns here, but I do want to discuss one, since it is near and dear to the patent world, The Adjacent Possible.  The notion will be familiar to most, that all new innovations build on what has been rendered possible by the innovations that came before it.  It is embodied in many famous quotes, such as Isaac Newton’s statement about “standing on the shoulders of giants.”  The author not only describes the concept in stories, but also provides a wonderful metaphor of a magical house where each door you open leads to a new room with more doors that were not available before.  This metaphor is very useful for people dealing with new invention.

In patent terms, The Adjacent Possible is the concept that every new invention is based on prior art and the legal fiction that the inventor knows everything that has come before.  The inventor is assumed to have a map of the magical house as it exists before his or her invention.  And the invention can’t already be in the house.  It has to involve opening a new door–that is the novelty requirement.  So, think about and use this metaphor when talking to your technical staff about new ideas and evaluating whether you should consider patent protection.  Did you just open a door to The Adjacent Possible or are you just rearranging the furniture in a room that was already there?

While I am on the patent topic, I think it is interesting that patents get very little mention in Where Good Ideas Come From.  I suspect it was an area that was unnecessary to the author’s point and tends to be a bit divisive among innovation people.  The patent system features in two major places in the book: 1) as a footnote on page 124 (of the trade paperback edition) about the complexity of the relationship between patents and innovation (particularly open networks) and 2) through a historical story and letter from Thomas Jefferson on pages 240-242 regarding the patent system and the difficulty of making ideas the subject of property.  The sum of these sections is really that the relationship between innovation and patents is complicated and our current policies probably do not serve all aspects of the innovation ecosystem.

Rendering the patent system as a footnote and a historical anecdote seems entirely appropriate to me.  Patents are a footnote to the larger question of what makes an environment innovative.  Our current patent system is more a historic and political accident than a well-developed catalyst for innovation, which leads to much of the debate about whether patents are good or bad.  Whether you believe in the patent system as an encouragement to innovation or something that innovators have to overcome, the reality is that innovation is natural process and a human drive.  Innovation will happen with or without patents, the question is how to best establish and use a patent system to improve the quantity, quality, and sustainability of the innovation in your company, industry, or society.

In Where Good Ideas Come From Steven Johnson has provided a conceptual starting point for evaluating innovative environments that we can use to improve our businesses, guide our industry, and rethink our policies, including the role and structure of patent systems and their use.

When Patents Attack! Review

Back in July of last year, NPR ran an episode of This American Life about patents.  I found out about it after it inspired an infographic on FrugalDad.  It’s an enjoyable listen and popular coverage of patents is important to consider when you are managing a patent portfolio and the invention culture within a company.  Here is the link if you missed it:

It opens with the classic tale of a startup that is the victim of a patent shakedown.  After that, it is pretty much investigative reporting about Intellectual Ventures and the implications of their business model and that of Patent Trolls/NPEs.  Even as a patent expert who knows all of the caveats about the fundamental value of the system and the unfairness of anecdotal analysis, the report left me feeling bad about the patent industry and where it is at this moment in history.

If you are responsible for patents in your company, you need to understand this perspective.  It is also worth investigating Intellectual Ventures.  As a patent aggregator, they can be an appealing route for monetizing unused patents.  If you believe in the value of your patents and what they have contributed to the state of the art, then there should be no shame or hesitation in using an agent to license others to productize your invention.  But there is a sense that it isn’t what IV or other Patent Trolls are really doing.

The Problem with Patents (Infographic) Review

If you have any interest in managing patents for your business, it is important to be aware of popular perception of patents and how the world thinks and communicates about patents.  I posted “The Problem with Patents (Infographic)” from FrugalDad on Monday.   Here are my thoughts on why it is amazing.

First, I am amazed that a blog on “Insights on Money, Career, and Coupons” would actually produce such a thing.  The money in patents is isolated to a pretty small group and the careers even more so.  I’m not aware of any patent coupons (though there have been some fairly striking patents and lawsuits related to domination of online patents–but that is old news).  The infographic isn’t entirely accurate, but it fairly represents a perception of the patent system and patents more generally.

Even more amazing to me was that it was actually inspired by an NPR piece.  Now while I realize that NPR is probably not the most popular media outlet in the world–it is big, influential, and has great reach among certain demographics.  That NPR would do a patent exposé was intriguing.  My plan is to review that piece next, but back to the infographic.  So, what does the infographic actually communicate?

The title says it.  Patents are a problem.  I think it would be more accurate to say the U.S. patent system and the business of patents are a problem, but can forgive the desire to simplify.  Taken point-by-point:

#1. There are a lot of patents.  The infomercial demonstration is pretty cool, though suggesting the one patent per product fallacy.  In the end, the real point being made is that there is a lot of waste in patents.  The MCAM quote on 30% redundancy is a nice tidbit.  I have worked with the MCAM folks and their analytical technology is interesting.  They don’t detect actual redundancy, but there is a legitimate claim to conceptual overlap.  By most analysis, the level of waste is much higher than 30%, probably closer to 80%.

#2. Patents cover fundamental technologies (particularly online).  The seems to be intended as an indictment, but why? There is little doubt that the internet is the biggest source of innovation in the last decade or two and, if you think something is worth patenting, it really should be fundamental.  But the point that it is now a huge problem for companies to navigate the intenet patent thicket is well taken.

#3. Intellectual Ventures is big, scary and of ambiguous intent and value.  There is a lot that is pretty damning about the way IV operates and it exposes many of the problems with the patent business.

#4. Patent lawsuits are big, expensive, and growing and they favor non-practicing entities.  Profit destruction may be an unfair characterization of patent judgements, unless they really are all shakedowns, which they aren’t.

#5. The Selfless Inventor is an interesting close.  Is the point that we would be better off without any patent system at all?  I think a more appropriate point would be that inventors have a choice about how they protect and commercialize their invention.  Giving it away is an option and, as the open source movement shows, can have its benefits.  But it doesn’t work for everything.

So, what should tech executives take away from this?  First, that the pain of dealing with patent risk is known and widely shared.  Second, that even within your company there is likely to be some hostility to patents and how they are used.  Make sure that your use of patents is for the right reason–to support innovation and the delivery of products to market.

Patent Strategy & Management

One resource you may find in your searches for information on patent strategy, tactics, and management is a newsletter called Patent Strategy & Management, published by American Lawyer Media.

I had the good fortune of working with its founder, Sam Vermont, about 10 years ago in Washington, D.C.  I wrote a number of articles for it and was on the Board of Editors for some time.  In fact, I may still be on the Board of Editors in name, I haven’t checked recently.  But I haven’t actively participated in it for a while.  Sam’s concept of a monthly publication with articles focused on strategic and management topics for patent owners was sound.  While he was editor, he also managed the relationships to keep a queue of solid content that allowed some selection of what would go in it.  But, as it got less of his focus and he eventually left the leadership role, it became more of a typical outlet for patent attorneys looking to get articles published.  It had to publish whatever came in the door.  ALM didn’t pay contributors for their articles, so they were only submitted by people who were looking to use the publication for marketing purposes.  Most of the submissions came from patent attorneys working in law firms and looking for resume builders and referral sources–I was one of those.  There were a few IP Consultants and academics who were regular contributors as well.  Overall, it managed to attract solid content every month, but it seemed to lose its “strategy and management” focus and just published things that attorneys and consultants like to write about the topics of the day.  Many articles were very worthwhile and I wouldn’t discourage patent managers from seeking it out, but I think there are many other outlets with similar content.

So, if you are considering subscribing, it could be a nice source of monthly articles on patent topics.  It is another source for information about patent law and you may find some topics insightful and helpful.  Are there other resources you like for articles on patent topics?  If so, please post a comment so people can check them out.