Lead Inventor On One Of The Patents Paul Allen Is Suing Over Worries About Litigation Over Innovation

from the not-supporting-innovation dept

We've been covering Paul Allen's move into patent trolling in which he's suing Google, Apple, AOL, eBay, Facebook, Netflix, Yahoo and others over a set of incredibly broad patents, covering things like "recommendations," "alerts" and popping up information in the corner of your screen. The EFF points out that Michael Naimark, the lead inventor on one of the patents, 6,757,682, on "alerting users to items of current interest," has put out a statement about the lawsuit.

He does note that he is contractually obligated to "defend intellectual property to which [he] contributed and to respect confidentiality," and he intends to live up to those obligations. However, he did not sign any kind of "no-speak" or "non-disparagement" agreement, and thus he's comfortable making a general statement expressing concern about how much money is focused on litigation instead of innovation these days:

I am also committed to fostering a vibrant creative culture. Long-term labs like Interval Research don't come along often, and I'm grateful for Paul Allen's support. But the stage is now set for enormous resources, from all sides, to support litigation over innovation. The creative community needs all the support it can muster, and it's a perplexing thought that the money at risk in this lawsuit will likely exceed the annual budget of the National Endowment for the Arts, possibly several times over. It could be hugely significant if all parties commit to something good for the creative community as an outcome.

While the statement is carefully worded and balanced, it's good to see him at least suggest there's a serious problem in how much litigation has taken over for actual innovation.

Filed Under: innovation, litigation, michael naimark, patents, paul allen

The State Of Innovation Is Not Defined By The State Of Our Patent Trolls

from the separating-out-the-realities dept

I had been debating whether or not it was worth actually writing anything about President Obama's State of the Union address earlier this week but had mostly decided to skip it. It was full of vague promises -- some of which sounded good, but most of which were woefully short on details. I was slightly surprised that President Obama did not make any real reference to intellectual property laws as being a key driver of innovation -- though, from his comments in the past, it appears he does believe that to be the case. The one time he mentioned any sort of intellectual property by name -- patents, in this case -- he did make a statement that made no sense and I debated writing up something on it.

However, as Dave H informs us, Matt Yglesias did the work for me, and wrote basically the post I would have written about why President Obama's line about patents in the State of the Union was misleading. It's the only mention of patents or copyrights at all, and the statement is simply:

"No country has more successful companies, or grants more patents to inventors and entrepreneurs."

This makes the same fundamental mistake that we discussed in which USPTO boss David Kappos seems to think that China deciding to get more patents means that it's being more innovative. Yglesias makes the point quite well:

The bigger issue is that the quantity of patents the government hands out to inventors and entrepreneurs is measuring two different things simultaneously. One is how many new ideas do inventors and entrepreneurs send in patent applications for. The other is how loosey goosey does the patent office get about what it deems patentable...

To offer an analogy that I actually think isn't stretched at all, but 21st century standards Isaac Newton should have patented calculus ("A Method For Using Fluxions To Determine Instantaneous Rate of Change") and then waited patiently until Leibniz published his superior method and then sued the pants off anyone who tried to take a derivative without coughing up a hefty license fee. But would that world have been a better place? The issue isn't really so much the rents that Newton would have thereby extracted (I'm not going to begrudge one of human history's greatest geniuses a fortune) but the barriers to entry that would have been created as a secondary consequence. A world in which smart people have access to the stock of existing human knowledge and are free to apply it in new ways is a world of competition and innovation. A world where you need to consult with an army of lawyers first isn't. If you ask the people who care most about promoting entrepreneurship in America about this they kind of shrug, concede that the patent system is hopelessly broken, and then confess to despair that it can or will be fixed.

In a broader sense, a lot of our politics is about symbolism. And symbolically intellectual property represents itself in the contemporary United States as a kind of property--it's right there in the name. But it's better thought of as a kind of regulation. Patents and copyrights are modeled, economically, the same as you would model any state-created monopoly.

Excellent point. The one thing I'd add is that if the number of patents is really being used as a metric for innovation or competitiveness, then that's easy to fix: just approve lots more patents (oops that's being done). Taken to a logical extreme, you just approve every application that comes in and you'll clearly have more patents than everyone else (and it will likely encourage even more people to "patent" stuff, knowing that they'll get such a monopoly, right?). So, under that scenario, you'll certainly have more patents than anyone else in the world... but would it make the economy more innovative? I don't think anyone could reasonably argue yes. The number of patents measures the number of patents. It does not measure innovation or competitiveness, and it's wrong, misleading and dangerous to imply otherwise.

Filed Under: innovation, patents, president obama

After Failed Lawsuit Against 'Copying Competitor' CEO Admits That The Competition Made Her Company Better

from the well,-duh dept

We've pointed out for years that, contrary to popular opinion, repeated studies have shown that things like intellectual property rarely drive innovation. Instead, the biggest drivers of innovation are things like need and competition. Competition is a big one, and intellectual property works against competition by limiting the competition, and thus potentially slowing down the pace of innovation. Of course, this message is often difficult for people to realize. DV Henkel-Wallace points us to a fascinating story by the CEO of an accounting software company, who had a falling out with her VP of sales, who immediately set up a nearly identical accounting software company. The reaction by the CEO was to take the typical "intellectual property mindset" approach, which meant hiring lawyers and suing. The whole legal situation turned out to be a mess:

I initially thought that litigation would be the most effective approach. We spent quite a bit of money building a lawsuit against her and finally initiated an intellectual property action against her.

[...]

We battled it out with lawyers for months and spent tens of thousands on legal fees, but neither of the lawsuits was resolved in the end. We learned that intellectual property suits are difficult to prove and our attorney said that ultimately our legal expenses could come to seven figures, with only a 50 percent chance that a court would rule in our favor. So we dropped the suit and went to mediation, but that didn't come to a satisfactory resolution either.

So after all that wasted time and money, she finally realized that she could just try to compete in the market place, and beat her former VP by out-innovating that competitor. And it worked:

Once I realized we were wasting valuable time, resources and money in court, I decided to focus all of that energy on outdoing our competitor instead. We vowed to differentiate ourselves by focusing closely on our clients' needs. Innovation became very important. When we started out we only offered a single software option. Now we have six tailor-made modules to meet the varying needs of companies of different sizes and industries. We might not have worked so hard to build out new tools if we hadn't had a competitor biting at our heels.

[...]

More than six years later, we still compete with her product, but we've enjoyed terrific success in that arena. As devastating an experience as this was at the time, it made BlackLine stronger in the end. We're on track for more than $10 million in revenue in 2010 and are growing steadily. Even better, our current clients are happy with our software, and they're spreading the word: We added 33 new clients just last quarter. We're confident that our client-focused approach has made us the leader in our field. Above all else, I've learned that it’s best to take the high road and commit all time and resources to being the best and -- not worrying about what other companies are doing.

Though my sales VP’s actions were devastating to me personally and to the company, she helped us in the long-run.

No matter how many times we make this point, people still go through the natural reaction to freak out about others copying them. And it is a natural, instinctive reaction. I can totally understand that. However, when you think through logically, the best strategy is rarely to focus on things like patents or copyright, but focus on simply out-innovating the competitor. If all they really did was copy your product, they probably don't understand it or your customers nearly as thoroughly as you do. Take advantage of that and become a leader in the market by innovating, rather than holding back innovation.

Filed Under: competition, innovation

How Facebook Used White Space To Crush Myspace

from the knowing-what-you-know-now dept

Mike talks a lot about disruptive innovation, about how -- despite all outward appearances -- newcomers can compete and even usurp the establishment (which are also called "entrants" and "incumbents" by Clayton Christensen). The examples are plentiful: Microsoft Money was outfoxed by Intuit's Quicken, Nike's pre-loaded iPhone app was leapfrogged by RunKeeper, Blockbuster was run into the ditch by Netflix, Kodak was surprised by the swift adoption of digital cameras... the evidence shows again and again that the size of the company and vastness of its resources do not necessarily guarantee its market dominance.

Gerd Leonard tipped me off to a great Forbes article by Adam Hartung called How Facebook Beat Myspace. For anyone who used both of those social networks, the grievances against Myspace are easy to list: too many ads, irrelevant ads, poor programming leading to browser crashes and typographic eyesores, letting users customize their profiles to such a degree that profile pages would either take too long to load (because of 50+ 10MB images) or the colors were simply too garish to view without getting a headache. Myspace, for all its fantastic social networking tools which had been hitherto unavailable, still had serious design flaws, and Myspace users saw Facebook as a better run and cleaner social network. That's why we all migrated.

Hartung bypasses the banalities of the user experience to examine the differences in business management approaches at Facebook and Myspace. He begins by rewinding the clock to remind us just how popular Myspace was at the peak of its success. If you remember, Facebook was a total nobody at that time. And then, something went awry... a change in the wind:

What went wrong? A lot of folks will be relaying the tactics of things done and not done at MySpace. As well as tactics done and not done at Facebook. But underlying all those tactics was a very simple management mistake News Corp. made. News Corp tried to guide MySpace, to add planning, and to use “professional management” to determine the business’s future. That was fatally flawed when competing with Facebook which was managed in White Space, letting the marketplace decide where the business should go.

"White Space" is a relatively new management term that Hartung advocates in his book, Seizing the White Space. Wikipedia describes White Space as the area in a business' hierarchy that exists between functions within the hierarchy, much like the unused space in your kitchen cupboard. White Space is the "handoff between functions where misunderstandings and delays occur", where "things often fall between the cracks or disappear into black holes". Hartung also calls White Space "a location for new thinking, testing and learning" in order to "evolve new formulae for business success free from the existing Defend and Extend culture."

Hartung then offers up the meat of his argument -- that Facebook conquered Myspace not because Facebook offered better features, but because it looked to its users for ideas and then created those features:

...the brilliance of Mark Zuckerberg was his willingness to allow Facebook to go wherever the market wanted it. Farmville and other social games -- why not? Different ways to find potential friends -- go for it. The founders kept pushing the technology to do anything users wanted. If you have an idea for networking on something, Facebook pushed its tech folks to make it happen. And they kept listening. And looking within the comments for what would be the next application -- the next promotion -- the next revision that would lead to more uses, more users and more growth.

And that's the nature of White Space management. No rules. Not really any plans. No forecasting markets. Or foretelling uses. No trying to be smarter than the users to determine what they shouldn't do. Not prejudging ideas so as to limit capability and focus the business toward a projected conclusion. To the contrary, it was about adding, adding, adding and doing whatever would allow the marketplace to flourish. Permission to do whatever it takes to keep growing. And resource it as best you can -- without prejudice as to what might work well, or even best. Keep after all of it. What doesn't work stop resourcing, what does work do more.

Contrarily, at NewsCorp the leaders of MySpace had a plan. NewsCorp isn't run by college kids lacking business sense. Leaders create Powerpoint decks describing where the business will head, where they will invest, how they will earn a positive ROI with projections of what will work -- and why -- and then plans to make it happen. They developed the plan, and then worked the plan. Plan and execute. The professional managers at News Corp looked into the future, decided what to do, and did it. They didn't leave direction up to market feedback and crafty techies -- they ran MySpace like a professional business.

And how'd that work out for them?

The tendency to plan for any daring enterprise is irresistible, and critically necessary in many cases. But Hartung's point is that innovation is a different beast from other types of business management. When you choose to innovate clever, competitive solutions to new market conditions, you have to be open to the possibility that you might create a newer business model that cannibalizes or "devalues" your current product or service. And so we arrive at the so-called Innovator's Dilemma -- do you tear down the walls of your temple to build a better temple? Or do you let someone else tear down your temple so they can build a better one? When you're an incumbent business like Nike, Microsoft, Blockbuster, or Kodak, you probably have so much financial investment in your legacy business model that you would rather turn a blind eye to all those young upstarts who seem to understand the market much better than you. After all, you have the experience, and they don't, right? Your staff went to Harvard and Duke and Stanford, right? Aren't your Excel spreadsheets of ROI projections your best protection against unexpected market reversals? You've produced 100 movies and they haven't, so what could these whippersnappers possibly know about the business of filmmaking?

Planning is of course essential for many parts of business but, Hartung notes, you really can't plan what people are going to respond to the most, and Zuckerberg understands that at a fundamental level. I once read an interview where the reporter noted how Zuckerberg constantly asks his colleagues, "Knowing what you know now, what would you do differently? And how do we get there?" This explains why Facebook revamps their site every six months... but also why Facebook continues to compete (and very effectively) with looming competitors like Twitter. (In passing, Netflix has also thrived from constant experimentation and listening to its users. Consequently, new features pop up on Netflix all the time that improve their service... and customers remain loyal because of that.)

But this point should not be glossed over. At the heart of Facebook's success is Zuckerberg's willingness to "destroy" Facebook to make it better and more competitive. Facebook was once the entrant, and now it is the incumbent and will stay the incumbent for as long as Zuckerberg retains the attitude of an entrant. Incumbents face a choice of abandoning much of their expensive infrastructure to adapt to a changing market, whereas entrants face no such choice -- quite the opposite, entrants have nothing to lose. They can try anything. Facebook crushed Myspace because Zuckerberg was focused on growing the user base by providing the things users asked for, rather than only providing the things that would grow the company's bottom line. Zuckerberg's second question, "How do we get there?" illustrates how he's constantly experimenting and building bridges from new and radical ideas to the current and static ideas. Myspace, being too preoccupied with planning, ROI, etc., never fully understood how important adaptability was to their business model.

Hartung concludes with the most important point of all:

MySpace demonstrates a big fallacy of modern management. The belief that smart MBAs, with industry knowledge, will perform better. That "good management" means you predict, you forecast, you plan, and then you go execute the plan.... Big failures -- like Circuit City, AIG, Lehman Brothers, GM -- are full of extremely bright, well educated (Harvard, Stanford, University of Chicago, Wharton) MBAs who are prepared to study, analyze, predict, plan and execute. But it turns out their crystal ball is no better than -- well -- college undergraduates.

There's an element of ego in play here -- legacy businesses are rarely humble enough to admit they can still learn from the newcomers, and that's to be expected. It's a convenient reaction to view emerging market developments as fads, gimmicks, or flavors-of-the-month and, as such, unworthy of diluting the company's resources by devoting extra time, money, and energy to research them. The fact is that many of these "fads" might very well be a waste of time and resources. By next year, they may have come and gone. And yet entrants view these "fads" with an open mind, and choose to tinker endlessly with them until the market reacts favorably to one of their experiments.

If anything, Myspace's spectacular failure underscores exactly how important it is to listen to others regardless of their experience or educational background. Yes, of course, experience is a factor in lending weight to someone's ideas, but good judgment is an equally important factor, if not more so. You needn't have had any experience producing horse-drawn carriages to make a sound judgment about how obsolete horse-drawn carriages would be with the coming automobile.

Filed Under: competition, innovation
Companies: facebook, myspace

China's Patent Strategy Isn't About Innovation; It's An Economic Weapon Against Foreign Companies

from the waking-the-wrong-giant dept

John Bennett points us to an article in the NY Times that claims to be about how China is gearing up to be an innovation powerhouse rather than just known for "copying." Of course, the actual focus of the article is about how China is trying to get a lot more patents. In fact, we covered this very issue back in October, highlighting how China has set an "innovation policy" that appears much more focused on getting more patents, rather than increasing innovation. There are, of course, some people who still think that the number of patents is a proxy for innovation, but this claim has been debunked so many times, it's just kind of cute when people still bring it up.

So, could it be that thanks to sustained US pressure on China to "crack down" on infringement, that China has suddenly come to believe that patents equal innovation? Last month, just before some diplomatic meetings between the US and China over trade issues, US officials did their usual misleading grandstanding about how China doesn't do enough to "protect" US intellectual property. And, in response, Chinese officials did their usual song-and-dance about how they're really serious about intellectual property now, and we should stop worrying.

Of course, as we've pointed out, China seems to be much more aggressive with intellectual property lately, but not in the way the US wants. That is, it's been using patent and copyright laws to make life more difficult for foreign companies, specifically US companies. And, in reading through the details of that NY Times article above, it looks like they're planning to do more of the same.

The strategy that's being described (get a TON more patents in China and all around the rest of the world) is not a strategy for innovation. It's a strategy to stop others from innovating. It seems that China may understand patents a hell of a lot better than even officials in the US. And, incredibly, US officials seem to be falling for it. The Chinese must be laughing with glee to hear USPTO director David Kappos naively declare that:

"The leadership in China knows that innovation is its future, the key to higher living standards and long-term growth," Mr. Kappos says. "They are doing everything they can to drive innovation, and China's patent strategy is part of that broader plan."

No, they're not driving innovation. They're seeking out weapons to use against foreign companies, as they've been doing for the past few years. That such an obvious move is totally missed by someone like Kappos suggests the level of ignorance of our own patent officials.

The US has taught China well how patents can be used as a weapon to hinder innovation, and it seems clear that China's latest strategy is to use patents as an economic weapon. It's not about improving innovation at home. The Chinese will continue to copy and ignore patents whenever it wants and whenever it believes it will be helpful to the local economy. But it will seek to stymie innovation around the globe by using patents as monopolies that can set up both tollbooths and huge hurdles for innovation from foreign competitors. And the US is playing right into this strategy by believing that patents, by themselves, are some sort of indicator of innovation and pushing China to "respect" patents even more. It's not hard to see how this is going to backfire badly on the US, including the companies who have urged on this strategy.

Filed Under: china, competition, economics, innovation, patents

Has The Video Game Industry Surpassed The Military In Driving The Next Wave Of Technological Change?

from the video-game-industrial-complex dept

For much of the twentieth century, many of the biggest technological advancements were trickle-downs from the military, which took huge government expenditures for R&D and later commercialized that technology. While many people here no longer remember this, the military connection was a big part of what built up Silicon Valley in the early days. However, times are changing. Andy Kessler's latest opinion piece at the Wall Street Journal suggests that the greatest driver of technological change these days appears to be the video game industry. He talks about how China created the world's fastest supercomputer, using chips that were built on video game chip technology:

Fifty years ago, President Eisenhower was worried enough to declare that "We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex." No need to worry anymore. That game (pardon the pun) is over: Welcome to the entertainment-industrial complex.

Consider the Apple iPhone, often touted as the tech symbol of our era. It's actually more evolutionary than revolutionary. Much of its technology—color LCD displays, low power usage, precision manufacturing--was perfected for hand-held videogames like the Nintendo DS and Sony PSP, which sold in the tens of millions. Think about how much more productively workers are now able to communicate because of some silly games.

He points out that technologies like Microsoft Kinect and online game technology are likely to start to move into corporate applications before too long as well:

Videogames will influence how next-gen workers interact with each other. Call of Duty, a military simulation game, has a mode that allows players to cooperate from remote locations. In World of Warcraft, players form guilds to collaborate, using real-time texting and talking, to navigate worlds presented in high-resolution graphics. Sure, they have funky weapons and are killing Orcs and Trolls and Dwarves, but you don't have to be a gamer to see how this technology is going to find its way into corporate America. Within the next few years, this is how traders or marketers or DNA hunters will work together.

So why is it that the military has been displaced? Kessler believes it's all about the money:

For one, capital formation. Governments had the unique capacity to raise (read: tax) the enormous capital needed to fund state-of-the-art projects. But a fully functioning stock market can raise billions for productive commercial applications, bypassing the military connection. Hate Wall Street all you want, but it's now better than wars at driving progress.

Second, displacing the military is about high sales volume. Often that means lower costs. The $300 Roomba automatic vacuum, which the company iRobot says it has sold to five million customers, helps drive down the cost of the Army's robotic bomb removers. Volume is especially good at spurring the creation of new applications. Hardware is nothing without software and apps. Caffeine-fueled coders won't even think about writing apps unless there are millions, if not tens of millions, of potential customers.

It's an interesting theory. I'm not sure I totally believe it -- as I think there's some cross-pollination going on, but it's definitely an idea worth thinking about.

Filed Under: innovation, progress, video games

New Year's Message: From Pessimism To Optimism... And The Power Of Innovation

from the love-the-possibilities,-upset-at-the-roadblocks dept

A couple months back, I had a really fascinating experience. I had two meetings in a row, each with incredibly successful content creators -- people who have embraced new business models and new technologies to amazing results, both creatively and monetarily. We were discussing the state of the entertainment industry today, as well as additional strategies for navigating what's coming next. What I found amusing, however, was how at some point, in the middle of each of those meetings, the person I was talking to sat back, laughed, and said "you're such an optimist about these things!" I was amused, since both of these individuals had already shown an ability to thrive in these new, often unchartered waters, but they still weren't completely convinced of their own success.

But the part that really struck me, was that immediately following these two meetings, I went to check on Techdirt, and was reading a series of comments about how reading Techdirt each day was making people more and more pessimistic -- what with new, more draconian copyright laws, domain name seizures, free speech violations and the like happening. And the juxtaposition of the two things struck me as odd. Yet, it seems to happen quite frequently. Just a week after those meetings, I was at the Monaco Media Forum, and I thought how nice it was that the opening of the event was entirely focused on optimism and all of the new opportunities that innovation has opened up for the media landscape. Having attended so many entertainment industry/media/policy/etc. events where most of the focus is on "the problems" or "the threats," I found that really refreshing. I mentioned on Twitter how cool it was that the conference was opening on such an optimistic note, rather than the pessimistic openings of other events. And the very first response I got back was: "look who's talking!"

And so, it seems, there's this odd dichotomy, where many people reading the site seem to feel that I'm angry or pessimistic in general, when the truth is quite the opposite (though, apparently, that only becomes clear to some people when they talk to me in person). For my last post of the year for the past two years, I've taken up similar subjects. In 2008, I wrote, On Staying Happy..., about how it was a myth that I was somehow filled with rage and angry about the world. There's so much wonderful going on, and it was excitement about all of that which keeps me happy. Last year, I expanded on that subject, in writing about Creativity, Innovation and Happiness, noting all the amazing achievements and progress made in 2009.

Once again, this year, I feel quite the same way. But I've been thinking a lot about the juxtaposition between those who think I'm extremely optimistic, and those who insist I'm extremely pessimistic -- and I think the best explanation I have goes back to a post I did in April, in which I explained how much I love seeing progress, and if I'm upset about anything, it's only about the roadblocks that get in the way of progress. I talked about the famous Louis CK video "Everything's Amazing & Nobody's Happy" where he discusses all of these amazing technological advances -- mobile phones, internet on airplanes, flying in airplanes itself -- and how people bitch and complain about it when those things don't work. Similarly, in that post, I compared two articles -- one complaining about the state of mobile phones today, and the other pointing out just how amazing it is that we have mobile phones today which are basically amazingly powerful computers in your pocket.

The point I was trying to make was that I definitely see both sides of that argument. I'm amazed every single day by some of the amazing things out there. And yet, at the same time, I'm frustrated by anything that gets in the way of making it even better. So, I'm super optimistic about innovation, and all of the possibilities out there. And I believe, quite strongly, that you cannot stop innovation -- but you absolutely can hinder it. So any "anger" that people feel, which may give them a sense of frustration and pessimism is my frustration about the roadblocks and barriers and hurdles that people throw in the way of this innovation -- either due to a misunderstanding of innovation, or through laziness and an unwillingness to change to take advantage of those new opportunities.

So, don't take the stories on Techdirt of negative things that are happening as reasons to be sad or pessimistic. Just look at them as highlighting the temporary roadblocks to innovation that need to be cleared out of the way. The faster those roadblocks are cleared, the sooner we increase that pace of innovation and there will be even more to be happy, excited and optimistic about. There will always be new roadblocks, but innovation cannot and will not be stopped.

Yes, it's frustrating to see roadblocks, corruption, monopolies and other efforts designed to hinder such innovation. It's frustrating because we know they're not necessary, and serve only to slow our own opportunities to experience great innovations. But, remain optimistic that as those roadblocks are cleared away, there will continue to be so much more that's wonderful to be optimistic about. Once again, a huge thank you to everyone who makes up the Techdirt community. While there may have been frustrating stories along the way, look at how far we've come. It's been a great year for the community as well, as it's grown significantly in the last twelve months, with many wonderful and thoughtful new participants that have made the experience of managing this site that much more exciting and fun. In the past year, I also believe we've had many more insightful and enlightening discussions, which I look forward to continuing in the new year. We've also got some goodies that we've been working on which will be coming during the year, so stay tuned...

Filed Under: innovation, optimism, pessimism

US Messenger Bag Company Discovers Copycats In Asia... Says We'll Keep Innovating And They'll Have To Keep Up

from the nice-response dept

We've pointed out in the past that too many companies totally overreact to copycat products hitting the market. If you're really an innovator, you keep innovating, and copycat companies won't be able to keep up. Or, worst case, if they leapfrog you, you build on their designs as well. However, many companies, still freak out and call the lawyers (or politicians!) and say "this is wrong!" So it's nice to see a company react smartly. Reader Wes sends over this blog post from the company Tom Bihn, which makes messenger bags, luggage and such things -- who recently discovered an Asian company blatantly copying one of their designs. So how did they respond? By noting that imitation is the highest form of flattery, and that they're just going to focus on innovating, so any copycats will just have to keep up:

Looks like someone liked our authentic Ristretto for iPad so much that they decided to copy it. This email was forwarded to us by a customer in Norway. Can any of you translate it for us? Our best guess is that this product is made in somewhere in Asia (not Norway) though we don't know for certain. Are we mad? Not really. We're too busy designing the next generation of laptop bags -- the copycats will just have to keep up with us.

Filed Under: copying, innovation
Companies: tom bihn

Georgia Voters Agree To Allow Human DRM: Non-Competes Made Enforceable

from the anti-innovation dept

A few years back, we explained how non-compete agreements are like human DRM. We detailed a whole series of research which actually showed the single biggest reason why Silicon Valley became "Silicon Valley," (according to multiple studies) was that unenforceability of non-compete agreements (yes, there were other factors too, but it was those factors combined with greater job mobility that created the innovation boom). You can read the details to understand why (and understand the various studies), but the short version is basically that by letting people move around from company to company, you get greater idea sharing among companies, which actually helps them all advance. While some want non-competes to avoid losing good employees, they ignore the fact that it also blocks them from getting good employees back, and from allowing an incredibly important form of information sharing to occur. One of the more recent studies in this space showed how the collapse of the Detroit auto market followed quite quickly on Michigan making non-compete agreements enforceable (yes, correlation, not causation, but combined with other studies, there's a strong relationship).

There's actually been a big effort in a few other states to make such agreements unenforceable, but apparently some states are going backwards. Benny6Toes points us to the unfortunate news that Georgia has passed a Constitutional Amendment to make non-compete's more enforceable. Before this, some non-competes were enforceable, but in a limited way.

What's really ridiculous is that those pushing for this Amendment presented it in terms that were quite clearly the opposite of what the Amendment would do:

"Shall the Constitution of Georgia be amended so as to make Georgia more economically competitive by authorizing legislation to uphold reasonable competitive agreements?"

Even though plenty of people who actually understood this issue knew that it was a ridiculously bad idea, for those who don't actually understand this issue, who's going to vote against making their state "more economically competitive"? Of course, it's rather scary that Georgia politicians would make such a claim when all of the evidence shows that such non-competes actually make states significantly less competitive. Really a tragic move for the state of Georgia.

Filed Under: georgia, innovation, non-competes

Getting Ready For When The Industry Tries To Kill 3D Printers

from the replicators-redux dept

Back in 2003, we noted that once 3D printing came around, just imagine how crazy various industries would go once 3D printing became commonplace, and people could "file share" the printer instructions for various physical products. If you think the RIAA's madness is bad, just imagine how insane things would get when you had actual "replicators" everywhere. In the intervening years, of course, 3D printing has matured quite a bit, and many are realizing that such a theoretical suggestion from years back is actually a pretty serious concern. Public Knowledge has put out a paper trying to warn the world of the impending political madness that will come down as 3D printing becomes more common -- and we start hearing stories about "pirated" physical goods. While I'm glad to see a group like PK sounding the warning bells now, I doubt it will change anything.

I used to hope that in spending over a decade explaining how the music industry could have responded better to file sharing, that other industries wouldn't go down the same path. Yet, what we've seen over and over and over again is that every new industry that faces disruptive innovation involving a previously scarce product suddenly becoming an infinite good -- and that they pretty much all react the same. They try to prevent the inevitable. They try to fight the technology. They go against consumer wishes. They try to protect the old business models. They invent moral panics and bogus statistics. And, of course, they throw a ton of money at politicians to make laws that preserve their old business models. It's happened plenty of times in the past, and it will definitely happen once 3D printing technology reaches that tipping point.

Filed Under: 3d printing, disruption, innovation, regulatory capture