At Conglomerate today, I posted this note about Stanford’s Institute for Design, or “d.school.” Founder of corporate design shop IDEO and co-founder of the d.school David Kelley says:
For any given project, multidisciplinary teams are formed that have a cross-section of students drawn from engineering, education, humanities, business and/or medicine. This innovative approach has allowed us to work on incredibly interesting projects. This year, we offered a unique class on how design can enrich the lives of autistic children and another using design to help subsistence farmers in India collect and distribute water to irrigate their backyard farms. Our industry project this year was with Electronic Arts on shaping the future of gaming.
A taste of my reaction:
Aren’t they missing a discipline? Where are the law students? Where are the law faculty? As one (non-law) colleague responded when I described my paper on the role of law in constructing “things”: well, law is design. Sometimes that means that lawyers tell designers what not to do. Sometimes it means that lawyers can tell designers what they might try. Either way, law is inevitably in the room, along with business development, finance, engineering, marketing, history, and behavioral psychology. At Pittsburgh, I’m in no position to tell David Kelley and his d.school colleagues what to do, but really, Stanford has some very smart people on the law faculty, and they should be connected with this enterprise somehow.
As to the “intellectual property” contribution from lawyers, Kelley might not have high regard. In the book “The Art of Innovation,” Tom Kelley does confront the patent infringement issue, what to do with “a competitor who seems to have a whole product category locked up through a bevy of patents?” The answer was a story of how an IDEO employee, Rickson Sun, sifted through an intimidating stack of patents with over 600 claims, wasn’t impressed, came up with a better idea and patented it. Similarly, Douglas Baird, in analyzing the success of Henry Ford, concluded that a competitor could easily have designed around Ford’s patents.
Of the faculty remark, some of the IP faculty at Stanford are not that technically oriented.
You’re right about the technical orientation of some of Stanford’s IP faculty, but if I were David Kelley, I wouldn’t be looking to lawyers for technical contributions. The non-technically-oriented lawyer sometimes sees how law and design complement one another. Your IDEO anecdote confirms the point; even good (technically oriented) patent lawyers sometimes mistake patents and patentability for business models.
I suspect that in most cases patent lawyers, certainly outside counsel and in many cases inhouse, are not informed of what the business model is. In such cases it would be difficult to mistake the patent for something the patent lawyer didn’t see. Typically, the patent lawyer receives an invention disclosure from the inventor which describes the scope of the technical issues, but rarely if ever suggests how money would be made.
Your overall point goes to a current sub-theme in the patent reform discussion of 2005. Certain legal academics suggest that the patent system has failed to promote innovation. The job of the patent system is to promote disclosure of information that meets the requirement of patent law (utility, novelty, nonobviousness and so on). The job of the patent system is not to determine which inventions will be successful in the marketplace. Businessmen should do that. It is absolutely correct that a wise businessman would ensure that his patent lawyer directs claims to meet a viable business model. The saga of Xerox PARC shows that does not always happen.
Of the Stanford law faculty, I find it ironic that a Stanford professor (in view of Shockley’s role, among other things) would persistently write that Bell Labs, at the time of patent application, thought the transistor was only good for hearing aids. If one can’t even master history, it’s hard to see how a non-technically trained lawyer/professor is going to give many useful suggestions.
For complete disclosure, I have a Ph.D from Stanford, and my feelings about some of the stuff from Stanford Law are akin to those of some MIT grads about the Lemelson matter.
Interesting. Let’s set aside the Bell case; there’s a lot of non-Stanford-generated writing out there that sticks to Bell for lack of foresight, and it’s not so important to my point. Which is:
The idea that “the ip lawyer” and “the business person” inhabit completely distinct domains may be true much of the time in the patent world. I don’t know whether this is in fact true; my experience with patent lawyers, especially in-house patent lawyers, suggests otherwise. I know that it isn’t true most of the time in the ip and tech worlds that I knew as a lawyer. Given what we have learned about technology law from some non-technically-oriented lawyers, and policymakers, I think that this blending is a good thing; it can lead to better patents and better business models. If it doesn’t happen now, it should be happening more.
The idea that the patent system should be designed to promote (technological) innovation is a pretty sound one. Innovation and commercialization, however, aren’t one and the same.
I have to ask: what have we learned about technology law from some non-technically-oriented lawyers? This seems to be your predicate for “blending is a good thing” and better patents and business models.
As to the goal of promoting innovation, I think the bigger point is that “disclosure of invention” (the goal of the patent system) is not the same thing as promoting innovation. Whether the 90%+ of the patents that are not commercialized promote innovation can be questioned, but it is does seem clear that disclosure occurred. The numerous patents that cite to, and distinguish from, earlier patents is some evidence.
I am interested in “there’s a lot of non-Stanford-[or Stanford] generated writing out there that sticks to Bell for lack of foresight.” Bell Labs fully understood the transistor as amplifier (AT&T finished a phone relay system based on the transistor about the same time the transistor-based hearing aid was commercialized) and Bell Labs fully understood the transistor as switch (the first airplane-based computer was built by Bell Labs under government contract in the 1950’s). AT&T was not in the consumer-electronics business, but certainly licensed to those who were. What lack of foresight?
Of knowledge of business models by lawyers, big companies are going with mass production of patent applications, throwing up the “wall of patents” horror story. I doubt if the patent scribe in Bangalore or Mumbai has been briefed on business plans. Similarly, I doubt if the US drafter working for 2 to 5K per app is melding business plan into claims.
1. There is an enormous amount of economically-motivated literature about platforms and networks built out of IP. Little of this is produced by or motivated by technologists in law, and judging only from what I hear in conversations with patent practitioners I know, relatively little of it has penetrated the patent bar.
2. In the long run, I think that the policy of the law both is and should be that disclosure exists to support innovation. If innovation isn’t the eventual result of disclosure, then why encourage disclosure?
The same answer holds outside of the patent system, where disclosure-to-aid-innovation is also a norm. Innovation occurs in the lab and on the bench just as much as it occurs in the marketplace, and innovation-via-disclosure occurs through non-patent disclosure mechanisms, such as scientific publishing. I don’t think that we are disagreeing with one another here.
3. I was referring merely to a quick read of articles about the history of Bell Labs that came up on a quick Google search. None of these that I found were written by Stanford or Stanford Law faculty, and they reflected a range of opinions — from (paraphrasing) “Bell foresaw vast potential for the transistor in the context of telephone technology and consciously asked for low licensing fees in order to get the invention into the hands of those who could commercialize it” to “Bell’s failure to recognize the potential of the transistor in the non-telephone based consumer technology market, which led to Bell’s demanding a foolishly low license fee from Morita.” I’m in no position to judge the truth; it looks to me, however, like both accounts are plausible. From what I’ve read, histories of technology are rarely straightforward; much depends on the point of view, on underlying assumptions about the nature of science and technology, and about the relative importance of the science itself, social and economic conditions, and personalities.
4. This depends on the nature of the industry and the nature of patenting practice. At a very low level, it is certainly right that patenting and business strategy are only tenuously connected, if they’re connected at all. Not all patent practice works that way, not all patent lawyers practice that way, and not all firms look at patents only from a defensive “build a portfolio” perspective. For companies that do, there’s no reason to bring patent lawyers into business planning; for that matter, there’s likely little reason to use patent *lawyers* at all (as you note). But not all companies (or investors in patent-driven companies) look at patents that way. I also have the luxury of concluding that building a defensive patent portfolio is socially wasteful, for the company and for the Patent Office, even if I recognize that it’s a pragmatic necessity in today’s business climate. For firms and investors that look at the world as I do, blending patent practice and business strategy offers cost savings and profit advantages.
Frankly, though I can see why business strategists would want to avoid patent lawyers (patent lawyers generally aren’t trained to deal in “business” terms — though they could be), I can’t see why patent lawyers — at least patent lawyers who aren’t mere scriveners — would want to avoid the business people. Other things being equal, more knowledge should lead to better patents; better patents means happier clients, and more royalty income (or less licensing fees paid), and (in a perfect world) less litigation.
1. I would be interested in some specific examples of what have we learned about technology law from some non-technically-oriented lawyers? Citations to articles, perhaps.
2. The constitutional mandate is to promote the progress. People were motivated to disclose in patents long before scientific publication in journals was a big deal. The disclosure of patents sets baselines of where technology is/was at a given time. Again, 90% of issued patents aren’t commercialized, and, in and of themselves aren’t innovations in the business school sense of the word. That does not mean that such patents didn’t promote progress. US patent law has never had a requirement of economic advance over the prior art. It has required utility and novelty.
3. Just because research by Google tends to produce conflicting results does not mean there really are conflicts. AT&T fully understood the need for a more reliable amplifier (than tubes), deliberately set out to create a solid state amplifier, and immediately implemented it. AT&T was a regulated monopoly that was not in the consumer electronics business. As a monopoly, AT&T did not want antitrust issues arising from market areas in which they had no business; hence, the 25K license fee. If you look at their initial demos in 1948 (and their earlier briefing of the Army), you will readily see that they understood the potential impact.
4. I don’t think the “wall of patents” strategy is necessarily defensive. It forces licensing, as IBM has illustrated.
Curiously, some of the worst “offenders” in the “write the patent quickly and cheaply” school that I have seen are from smaller companies, exactly those who one might think need the good patent. However, claim construction being what it is (ca. 50% reversal rate), no one is ever quite sure about the scope of claims. Further, it’s not even clear what is prior art (in Eolas, the district court applied 102(g) abandonment principles to what was 102(a)/102(b) art). With this level of uncertainty, there seem to be many who take the money and run before sloppy work is uncovered.
Patent lawyers don’t “avoid” business people. Patent lawyers get the invention disclosure of the technical person. If they are lucky, they talk to the technical person. Business people are not in the loop. Business people, for whatever reason, don’t typically seek out patent lawyers. In Exxon v. US over Fischer-Tropsch catalysts there was monumental litigation, but when the smoke cleared, damages were only a few thousand dollars. Similarly, there are lots of patents on oil shale conversion, with basically zero likelihood that they would ever be economically worthwhile. On the flipside, certain businesses have invested in BlackLight’s hydrino technology. Jaffe and Lerner sure didn’t seek out patent lawyers in accepting the 85% patent grant rate argument.
If business people were really involved in patent decisions, one hopes that more than 10% of issued patents would generate some money.
To focus on one point [“Bell’s failure to recognize the potential of the transistor in the non-telephone based consumer technology market, which led to Bell’s demanding a foolishly low license fee from Morita.†I’m in no position to judge the truth; it looks to me, however, like both accounts are plausible. From what I’ve read, histories of technology are rarely straightforward; much depends on the point of view, on underlying assumptions about the nature of science and technology, and about the relative importance of the science itself, social and economic conditions, and personalities.]
one notes
1. Bell Labs had a flat fee for licensing the transistor patents. It was $25,000. It was the same for Morita (Sony) as it was for Texas Instruments. It did not depend on field of use.
2. The transistor patents were royalty free for the field of use of hearing aids. Even Stanford professors acknowledge that the inventors of the transistor foresaw the hearing aid application. The argument that because Bell Labs charged a ridiculously low royalty (free) indicates they did not see the use is wrong for hearing aids, and wrong for the other applications.
3. Because both accounts are “plausible” does not mean both are right. To some (including Stanford professors), both possibilities in selecting the door in the “Let’s Make a Deal” problem are equally plausible, but they are not.
4. While historians may take different points of view on technology (a recent book elevates the contribution of Glenn Curtiss over the Wright Brothers), the scope of understanding of the inventors of the transistor is something that can be objectively assessed. We have earlier discussed the disclosure function of the patent document. Here, one notes that the Bardeen/Brattain and Shockley patents mention the amplifier function of the transistor, but never mention the words “hearing aid.” If it were true that the only application they foresaw was hearing aids, that is a very odd situation.
To be honest, I really think that we don’t disagree much on the merits, but we simply talk in very different vocabularies. We do disagree on some history (scientific publishing largely preceded the patent system) and some historiography (I’m more skeptical of our ability “objectively” to assess what was known at some point in time), but I don’t regard either point as fundamental. I’ll have to sign off with the following:
Seeing the relevance of economic research to IP requires only a cursory examination of the Current Index to Legal Periodicals over the last decade, or, if you prefer, a search for research on network effects and institutional economics on JSTOR. Bell did charge a $25,000 flat license, to Sony and others; I didn’t suggest otherwise. And “Google results” shouldn’t be taken disparagingly, even though I don’t have time to give cites and sources; I was looking at e-copies of journal articles — from the technical literature, not the legal literature. Patent lawyers, at least most of the patent lawyers that I talk to, are indeed frustrated by not having sufficient access to the inventors, but they have little interest in talking to the business people. But finger-pointing is not the point; the point is that if both disciplines spent more time talking to and learning from one another, both clients and the patent system would be better off.
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