Punishing Success: Early Digital Music Player Inventor Wants In On iPod Profits

from the rewarding-failure dept

Wed, Apr 19th 2006 3:01pm — Mike Masnick

One of our complaints with the patent system is that some of the incentives are designed in a way to actually punish success and reward failure. In the RIM/NTP case, for example, the company that failed in the market place gets tons of cash while the company that actually figured out what the market really wanted gets punished. It's that aspect that we find troubling about the way the patent system currently works. Capitalism has great mechanisms for rewarding those who successfully innovate: it's called having people buy your product. However, it seems we're increasingly hearing stories of failed businesses that suddenly think they're entitled to some part of the profits of success stories, just because they were somehow "first" -- even if their implementation failed. Take, for example, the story of Kane Kramer, who this article generously describes as creating the first MP3 player. That's not really accurate, of course. He did build a very early digital music player (pre-MP3), but it couldn't store more than a few minutes of music. Various business factors kept the product from succeeding. Perhaps he was just a bit too early -- but that's the nature of business. Of course, now that Apple is so successful with the iPod, what's he doing? Calling the lawyers, of course: "Kramer is consulting lawyers to see whether he has any claim to the design and technology behind the MP3 player." Hopefully, the lawyers explain to him that he has no claim whatsoever. His patents have all expired and his company folded a decade and a half ago. It's unlikely his plan to hit up Apple for money will go anywhere -- but just the fact that he's trying says something about the type of behavior the system is encouraging these days.

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31 Comments

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ZOMG CENSORED, 19 Apr 2006 @ 4:36pm

I suck, gimme money
Just because someone cannot come through with a product they instantly try to hop on the money bandwagon and sue a successful company? Jesus, I wish I could be that inane and make a quick buck...
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WTO605 (profile), 19 Apr 2006 @ 5:00pm

Why Apple
As much as I hate apple I can't help noticing that this guy didn't even flinch when Creative commanded the entire MP3 player market (granted it was a niche) for almost 5 years before the iPod came out. Apparently their profits weren't enough to sue about?
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Joe T, 19 Apr 2006 @ 5:06pm

Patent applications should require a working prototype of the invention. That would slow the process down, sure, but it would also:

1. Prevent people from patenting ideas that are not products (such as "1 click purchasing").

2. Prevent people from patenting products that are too broad ("portable music player").

3. Prevent people from thinking up something that might be viable years from now and patenting it, with no intention to actually create it, hoping someone else will create it and they can they sue and cash in ("fuel based on wheat").
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MusicMan, 19 Apr 2006 @ 5:11pm

So we reward marketing over innovation?
Apple is making good money on the iPod, But they like many times before borrowed and existing idea and improved it and then marketed it well.
Patents aren't about protecting the strong, they are about protecting the innovative from being stomped on by the big and well funded.
The NTP patents were not new, so should not have been granted. The system fixed itself. The first version of an idea that creates a new industry may not be impressive, but it deserves a reward.
Without it, we would all be listening to MiniDiscs ..
Patents aren't perfect, but for gods sake lets not get mad when they do work.
Apple pay up... Some people need to realize in the MP3 market Apple is the stomping giant, not the sympathetic underdog it is with the Mac.
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MusicMan, 19 Apr 2006 @ 5:25pm

Joe T.. Think Again
Actually there is substancial design behind One-Click to make it work so people trust it and it doesn't create excessive returns etc. But many don't look at the system, they look at the button.

Portable Music Player (with memory) vs carrying a bunch disks with you is more specific than say the light bulb which covered tons of variations for years.

If you weren't just blowing hot air vs real experience, you would know that except for the Dot. Bust Bubble sometimes the patent is what gets you the funding to move forward.

Contrary to the media hype. The patent process is a slow methodical process. Mistakes are made.

Often what the problem is now that the the industry moves more quckly than when the system was set up and there is no reform.

Smart person A) thinks of a new idea submits patent
Company B) either builds on idea it sees, or is creator number 2
It can take 2 years before the application is even searchable. Then 3+ years before it is granted.

In the current world when finally the inventor is granted the protection. The world assumes, geee that is not a new idea.. what a scam. Mean while Company B gets rich on idea...

Smart Person either sues or sells patent to someone who can afford to sue, because Company B often does not want to honor patent.

Apple can pay the smart person... For his initial idea.
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Mike (profile), 19 Apr 2006 @ 5:33pm

Re: So we reward marketing over innovation?
Apple is making good money on the iPod, But they like many times before borrowed and existing idea and improved it and then marketed it well.

In other words, they were the ones who figured out how to successfully bring such a product to market. They deserve the rewards for that. Why should the guy who couldn't figure it out get rewarded?

Apple pay up...

Uh. Why? What does Apple owe this guy? Especially since his patents are expired...
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Dosquatch, 19 Apr 2006 @ 5:35pm

Re:
Joe T wrote: Patent applications should require a working prototype of the invention.
Assuming I've RTFA correctly, Kane had a working prototype.
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MusicMan, 19 Apr 2006 @ 6:24pm

Why Honor Patents
Because the company with the Biggest pockets is not always the one that changes the world.

I didn't realize we had so many screw the little guy give control to big corporations on this site.

The Guy did the work, because he isn't rich its OK to steal his idea to get richer...

I assume since all the Apple fans are fair, Given this idea.. Taiwan should start making Mac clones because they can do it cheaper and Apple shouldn't be able sue or block the shipments... Yea Cheap Macs!!!
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angry dude, 19 Apr 2006 @ 6:26pm

Re: Re: So we reward marketing over innovation?
Mike, you are either a fucking clueless idiot or a corporate stooge..

No more comments
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Susheel Daswani, 19 Apr 2006 @ 6:31pm

Re: Re: Prototype
An patent application must have a working prototype, actually, except it has to be a written description of how to build that prototype. Specifically, 35 USC 112 states (in part):

"The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same,"
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Anonymous Coward, 19 Apr 2006 @ 6:33pm

Tell the Truth
OK, you are a regular Joe, and something hapens to you, maybe you spill hot coffee on yourself, maybe you invent something but you can't bring it to market, later on in life, a lawyer comes to you and tells you that at no cost to you he will file a lawsuit and try to get you a couple of million dollars.

Tell the truth, would you tell him to take a hike? I seriously doubt that.
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Tyshaun, 19 Apr 2006 @ 6:58pm

patents protect inventions not marketing/market sh
The point of the patent system is to protect the original invention, not the one who made money on it. As was said time and time again, iPod wasn't the first MP player, just a well implemented/marked one. However, if the true "originator" of the idea of an MP player (which I think is more than unique enough to patent) wants to come forward for their cut, so be it. Apples legal team should have been smart enough to get permission and *gasp* check the patents before launching iPod. ISn't this how the system supposed to work?
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Mike (profile), 19 Apr 2006 @ 7:05pm

Re: Why Honor Patents
Because the company with the Biggest pockets is not always the one that changes the world.

I never said that. In fact, I've said repeatedly (and I believe it) that smaller companies can quite often outrun and out innovate bigger companies with deeper pockets.

If you really think money is all it takes to win, then you're not innovating enough.

My point of view, actually, is that smaller companies have a much better chance to succeed without worrying about patents. It's the big companies who will be caught unaware because they're much slower to act.

The Guy did the work, because he isn't rich its OK to steal his idea to get richer...

Uh. NOWHERE is it said that Apple "stole" this guy's idea. Apple didn't steal his idea. They came out with a better product and made it successful.

Why should we reward this guy for failing in the marketplace?

I assume since all the Apple fans are fair, Given this idea.. Taiwan should start making Mac clones because they can do it cheaper and Apple shouldn't be able sue or block the shipments... Yea Cheap Macs!!!

I have no idea what this has to do with the discussion.
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Mike (profile), 19 Apr 2006 @ 7:06pm

Re: Re: Re: So we reward marketing over innovation
Mike, you are either a fucking clueless idiot or a corporate stooge..

Angry Dude, you keep saying stuff like this, but for once I'd like you to back it up. Why do you think I'm a "corporate stooge"?

Most companies I know don't agree with my views on patent reform at all... so this comment makes no sense to me.
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Mike (profile), 19 Apr 2006 @ 7:11pm

Re: patents protect inventions not marketing/marke
Tyshaun,

The point of the patent system is to protect the original invention, not the one who made money on it.

This is false. The point of the patent system is to promote innovation (NOT invention).

As was said time and time again, iPod wasn't the first MP player, just a well implemented/marked one. However, if the true "originator" of the idea of an MP player (which I think is more than unique enough to patent) wants to come forward for their cut, so be it.

Uh. Why? Implementing and marketing right is what innovation is about. It's about finding the right product to satisfy what the market needs. Apple did it. This guy did not. Why do we want to reward the guy who failed?

Apples legal team should have been smart enough to get permission and *gasp* check the patents before launching iPod. ISn't this how the system supposed to work?

So, you can't innovate without first doing a patent search? That seems silly. Also, this guy's patents expired over a decade and a half ago. Funny how so many people talk about how one of the benefits of the patent system is that it's for a "limited time" but as soon as that limited time is over, suddenly you think it should be extended?

Also, this is NOT how the system is supposed to work. The system is supposed to encourage innovation -- which is 100% about getting products to market, not just coming up with ideas. Why should we punish those who succeed and reward those who fail? What social benefit does that have?
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Amazed again at mike, 19 Apr 2006 @ 9:53pm

Mike...really now
"One of our complaints with the patent system is that some of the incentives are designed in a way to actually punish success and reward failure. In the RIM/NTP case, for example, the company that failed in the market place gets tons of cash while the company that actually figured out what the market really wanted gets punished. "

What a crock of horse shit. So now you're promoting stealing other peoples ideas with the justification that they didn't make it big enough so it's ok to steal?

Mike, really, I seriously question your motives in these posts. Get a clue.
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Mike (profile), 19 Apr 2006 @ 10:04pm

Re: Mike...really now
So now you're promoting stealing other peoples ideas with the justification that they didn't make it big enough so it's ok to steal?

Not at all. Please don't put words in my mouth that I didn't say.

It's not about "theft" at all. After all how do you "steal" an idea? You tell me to get a clue, but do you say the same thing to Thomas Jefferson, who made the same point (much more elegantly than I do, of course):

"If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of everyone, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density at any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property." - Thomas Jefferson

My point is simple. An "idea" is not the final product. The best thing for society is for better and better final products. If the original idea creator is truly innovative he or she should be able to continue innovating and outrun anyone who copies their idea. In fact, anyone who copies the idea should lead to greater innovation, as multiple parties will compete to improve on the idea, and better serve customers.

If your entire business is based on the fact that you need a monopoly to survive, then you have a problem.

Do you have a problem when a Burger King opens up across from a McDonald's? After all, that's one company "stealing" the idea of another -- according to you. Back here in the world I live in, that's called competition, and it's what drives the economy.
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Anonymous Coward, 19 Apr 2006 @ 10:10pm

Welcome to capitalism, it isn't about what retard made the product, its about who can make people want it. Who gives a horse's ass if some guy made a personal media player that holds 3 songs? Unless somehow Apple managed to make an exact copy of whatever this retard made, why should they have to pay? They applied the technology better than he did, and made loads of cash off of it. Unless they somehow prevented him from doing just that, he doesn't deserve anything. Also, if his patents have expired then WHERE IS THE QUESTION? HIS PATENTS DON'T COUNT ANYMORE, THEY'RE EXPIRED!!!
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Laughing, 19 Apr 2006 @ 10:29pm

Re: Re: Re: Re: So we reward marketing over innova
It's hard for him to make sense when he's writing from an asylum....
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Laughing, 19 Apr 2006 @ 10:40pm

Re: Mike...really now
And maybe you should learn to read... Those patents are over, by about 15 years actually, so quite possibly you need to read the whole thing instead of selectivly reading what you want....
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J, 19 Apr 2006 @ 10:49pm

B.Y.O.P.
Everyone seems to have missed the fact that his patents expired. Not only expired but expired a long time ago. Not only expired a long time ago but expred before every other MP3 player came out before iPod. I had a Lyra at least a year before iPod came out, but I don't see this guy trying to sue RCA. The point of patents are to promote inovation by giving the inventor a limited time to produce and sell his inovation before anybody else can copy said idea. This way people say "if I invent this thing that people want to use I can get rich." and because they can get rich they have the motivation required to actually invent it. The reason patents expire is so after the inventor has been given a reasonable amount of time to get rich from his invention then other people can take the idea and improve upon it with out having to ask permission or pay money to the inventor. He made his patent. He had his time to get rich. His patent expired and so now everyone, even you, has the ability to take the idea of the MP3 player and try to improve upon it. It's the way the system was designed to work and if this guy succeeds with his suit then it's all the proof that we need that the system has to be torn down and a new one built in it's place because it's obviously not strong enough to stand up anymore.
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Louis, 20 Apr 2006 @ 4:45am

Mellow Mike
Mike, you are either a fucking clueless idiot or a corporate stooge..

Angry Dude, you keep saying stuff like this, but for once I'd like you to back it up. Why do you think I'm a "corporate stooge"?

Most companies I know don't agree with my views on patent reform at all... so this comment makes no sense to me.

Haha Mike! Kudos for being so mellow and taking the time to debate these issues. You rule dude!
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tk., 20 Apr 2006 @ 6:49am

Wait, WTF?
I PATENTED THE INTERNET.

I'm currently in talks with my lawyers about how much I'm suing Al Gore for...

seriously though... I had a working MP1, 2, 3, & 4 player before this dude.

I'm going to be the richest man in the world. I'll be bigger than Bill Gates.

Who wants to be my friend?
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Daniel Barbalace, 20 Apr 2006 @ 7:19am

Clarification of Wait, WTF?
I know your being sarcastic, but at least use accurate sarcasm as many people will start believing incorrect things.

The "3" in MP3 does NOT refer to MP version 3. It refers to MPEG Layer 3. MP3 files are MPEG-2 Layer 3 or MPEG-4 Layer 3 files. Unfortunately the file extension was badly chosen and people think it is a version number.

The MPEG standard is divided into independent layers, each of which can be implemented without regard for the other layers. Layer 3 refers to high bit rate audio.
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Who Cares?, 20 Apr 2006 @ 7:58am

Re: Clarification of Wait, WTF?
Thank you, Mr. Science.

Next week on WTFC; origin of the phrase "all your base are belong to us" as clarified by an ex-somethingawful.com writer.
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Moogle, 20 Apr 2006 @ 8:45am

Missing the issue
Let's forget for a moment that his patents are so stale they make they crypt keeper feel young.

Let's further assume (whether it's true or not) this guy made the first music player that loaded songs into memory instead of disks.

He thought it up, created it, brought it to market, and tanked horribly because memory was still to0 expensive. His only failure was that he was WAY too damned early.

So Apple, years later, puts out the same product with sex appeal, just the right ammount of space, sound quality, and cost, and makes tons and tons of buckets of money.

(Yeah moogle, we know all this, get on with it) So the real question is the test of obviousness. Would apple have thought to make the iPod if this guy hadn't made his first?

If it isn't obvious, then they owe all their millions to his previous example in the market. Whether or not he was a direct influence or if they developed it independantly, his product was in the world, spreading ideas, and would have had to affect Apple's behavior.

If it IS obvious, then everyone knew it was a good idea, but this guy was first because everyone else realized that memory was too expensive and lossy compression sound quality wasn't as advanced. He was first to market because he's a moron, and Apple simply sold an obvious idea on hard work from marketing, design, and development.

Either one of these are valid viewpoints. One of them is (subjectively) wrong.

I think any reasonable person would argue that a music player without disks is pretty damned obvious and this guy had no case even if his patents hadn't expired.

(Note: This might not actually have been 'obvious' at the time, and thus could have been a valid patent, because no one else might have thought that memory would be cheap enough to make this idea feasible. By the time Apple joined the market, there were already numerous players on the market, so I don't understand why someone should be allowed to choose the company that marketed it the best rather than the first, or all the players.)

Sadly, no one will read my comment because I posted so late. Cry.
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voodoo, 20 Apr 2006 @ 11:00am

Re: Missing the issue
I read the quote. Well written.
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jess, 20 Apr 2006 @ 9:13pm

Are we being serious?
The point is not who had the idea first, unless you're talking about who had the idea to invent a player that works on unique technology and design and that plays a unique format of music. Because, if those are the standards you're using, then it was Apple that did that. This guy's player didn't have the same technology, didn't have the same capabilities, and didn't play the same format. What's to steal. NOT TO MENTION THAT THE PATENT HAD RUN OUT! Some of the people on this forum would probably advocate the descdendants of Thag, the homo erectus, go sue firestone for unlicensed use of the wheel concept. Give me a break. Right is right, and just because a side is championed by a big corporation doesn't automatically make it wrong.
But just in case I'm wrong, I'm going to go patent a flying car tomorrow, so that, when and if someone makes it possible, I can get rich, too.
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tk., 21 Apr 2006 @ 5:20am

Re: Clarification of Wait, WTF?
The "3" in MP3 does NOT refer to MP version 3. It refers to MPEG Layer 3. MP3 files are MPEG-2 Layer 3 or MPEG-4 Layer 3 files. Unfortunately the file extension was badly chosen and people think it is a version number.

Whew, I'm glad I didn't waste my time learning this stuff at school.

What's next mp4, isn't really the technologically correct term? Maybe it's divx?

Some people just don't appreciate other's sarcasm...

Whatever the case, I made the Internet (version 1.0).

I may not have had the money to patent it, but I had the idea first!

I need to get the same lawyers this guy has.
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Tony, 24 Apr 2006 @ 2:03pm

inventor should be rewarded
This guy invented the process of downloading music on to a crystal chip, its as simple as that. His 80's design for 1X1 bears an uncanny resemblance to the current ipod.( See Mail on Sunday ) Although the technology of his invention fell into the public domain,he still has the copyright to his original design. Could be interesting, as it seems Apple sue anyone who comes too close to their design
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Ross, 24 Oct 2006 @ 5:46am

ipod is special case
Does the ipod example really back up the views in the article? The idea of a portable duke box (Kane) is not equivalent to the practical construction of one, which is any use(Creative/Apple). It is like saying, "I have thought up the idea of a flying car, if anyone in future manages to make one that works, I will sue them." It would be different, however, if the invention was truly original, for example, the transistor.
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