Toll of the Patent Troll

The Wall Street Journal has a great article about Patent Trolls and the Toll the cost on an innocent economy. Here's the excellent WSJ Article: America’s Biggest Filer of Patent Suits Wants You to Know It Invented Shipping Notification, By RUTH SIMON and  LORETTA CHAO, Updated Oct. 27, 2016 1:11 p.m. ET.

Small(er) companies are targeted by a non-practicing entity (NPE), sometimes ungraciously referred to as a Patent Troll. IPZine previously discussed Patent Trolls in their various forms. Efforts to kill the trolls, or at least send them back under the bridge have moved forward with mixed success. In the US, the court costs have been paid by both parties historically, so winning in court, might still be losing. It might be better to simply pay the fees that would go to lawyers and be 100% certain of the outcome. A court ruling in 2014 has shifted this court cost dilemma. (See Wikipedia article on Patent Trolls.)

Imagine a portfolio of patents related to predictive arrival. That is, when will a product, person or thing arrive. The patent portfolio has 60 some patents with about half still active. That affects almost every business concept from shipping, manufacturing, service and more. It certainly hits on most of the activities that occur on the internet as well. Airlines, shippers, buses, and school buses -- government and private -- have fallen prey to the transit NPE.

So a small(er) business, attempting to do business, gets suddenly clobbered by legal notices and maybe even law suits. WHAT!!!??? The company probably has no patent attorney, so they scramble to find one. The patent attorney advises, at say $500 per hour, on the options and the potential costs. Litigation will cost $250,000, unless you lose; then it gets expensive!.

So, what's a small firm to do? This fight is like taking a pocket knife to a gun fight. Might be better to pay some fee, say $25,000-$50,000 and possibly a licensing fee (say a small % of sales), then to risk the bankrupting if the business. 

All agreements are confidential, so it is hard to see who paid what licensing fees, and how much. The big shippers of FedEx and UPS have, apparently, full licensing for them and their clients. So a small company that uses their services, and only their services (of shipping and notification), might be in the clear. 

The big NPE in this Simon & Chao article is Shipping & Transit LLC. About 10 years ago, the company tried to do a product for buses and shipping (Bus Stop and ArrivalStar). But neither worked out. So now Shipping and Transit sit around suing companies. 

Not a single law suit has gone the distance. Consequently, none of the patents have been really tested. This is interesting since many of the patent claims are rather obvious and arrival/queuing goes back 50-100 years. 

It seems like some type of a class action suit would be possible and force the issue against the NPE. The secret to the success of the Patent Troll, however, is to pick off the prey a few small targets at a time. Then, those victims who survive, are signed into an iron-clad agreement that cannot be breached under penalty of death. The airlines, FedEx and UPS are not talking, but what an interesting conversation that would be. 

The Jones gang of Shipping & Transit, way back in the day (circa Y2K) of ArrivalStar were ruthless. Doesn’t seem like much has changed… 

Keywords: NPE, Patent Troll, licensing, PLA, patent licensing agreement, economic development, 

Olivier Scalabre: The next manufacturing revolution is here | TED Talk | TED.com

Olivier Scalabre: The next manufacturing revolution is here | TED Talk | TED.com:

Yes. It is here. The next generation of manufacturing.This is an absolutely spot on TED talk related to the world of manufacturing.

Everyone in the USA wines and complains about the flight of manufacturing from the USA. We don't make anything any more. That's not really true. We still make a lot of stuff, but the percentage of the workforce that makes stuff is a much, much lower percentage.

After 3 major industrial "revolutions" that have lasted 50-60 years each, we are due for another breakthrough technology/process/approach. It has now been about 50 years of slowing productivity. And the next revolution is already here.

Monsieur Olivier has very profound arguments for manufacturing to return onshore. One of his arguments is mass customization that is best done near to market (onshore), especially with the latest technologies.

There's another massive argument that pertains to the US, and not Europe (France). With new technologies of fracking & horizontal drilling, the US is swimming in cheap oil and (nat)gas. A huge proportion of manufacturing has to do with the cost of electricity -- cheap and clean(er) now with the major switches away from coal (toward NatGas and renewables). Transportation is cheap and more efficient. Plus, almost everything manufactured uses oil, particulates and natural gas. All plastics can, and should be manufactured at home.

We have been flaring about half of the NatGas in the US. All we have to do is set up an electric plant (run electric transmission lines) and/or a plastics factory next to the oil fields to capture some of this free energy.

Also, in 2015 and 2016, renewable energy has broken through that foggy glass floor. Without considering any of the externalities of coal, wind and solar are now cheaper for electricity. If the true costs of coal, considering all externalities are 2 to 3 times the price at the meter, then cheaper, better and cleaner energy is available at home. Far better in all respects than any factory in China or India.

Watch the assumptions and assertions in Olivier's presentation and see how much and how quickly it all comes to pass.
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Busted, or not busted, our patent system

One of the most revered, trusted and enduring of America's industrial and technological advantages is our patent system.  Except that, it isn't anymore.  Patents are included in the US Constitution, proof positive that the Foundering Fathers considered them critically important to the future of the country.  That was then, this is now and you'll understand when you go to www.wired.com/2015/01/fixing-broken-patent-system.  It was written by Jay Walker,the founder of Priceline in the late 1990s.

Here is an insightful chronology of how much the patent system benefited the country up until the last several decades.  The system is now too cumbersome and costly such that 95% (Walker's data) of inventions are not available to small and medium size businesses.  Only the mega corporations have the human, financial and technological resources to fully utilize the system.  A study is cited stating that liberating the patent system from litigation-based costs and risks would create $200B/yr in increased economic output.
Although Hall & Hinkelman (2015) in the Patent Primer 3.0 boast of Intellectual Property, mainly patents, as one of "the great equalizers of our lifetime", not all companies who use patents are equally able to capitalize on them.
References

Hall, E. B. & Hinkelman, R. M. (2015). Perpetual Innovation™: Patent primer 3.0: Patents, the great equalizer of our time! An overview of intellectual property for inventors and entrepreneurs.  Morrisville, NC: LuLu Press. ISBN: 978-1-329-17833-5  Retrieved from: http://www.lulu.com/spotlight/SBPlan

Hall, E. B. & Hinkelman, R. M. (2015). Perpetual Innovation™: Patent primer 3.0e: Patents, the great equalizer of our time! An overview of intellectual property with patenting cost estimates for inventors and entrepreneurs.  [Amazon Kindle eBook].  ASIN: B010ISU7ZG

Miami No. 2 in startup activity, Kauffman report says | Miami Herald Miami Herald

Miami No. 2 in startup activity, Kauffman report says | Miami Herald Miami Herald:

This is a very interesting, but telling report.

Miami is way up there in startups, about 250 per 100,000 people. Cleveland, not so much so, with less that 100 per.

It is a little surprising that Orlando fell 12 ranks down to 33rd. Makes you wonder if it is Orlando losing ground or other metros gaining very rapidly. I would guess mostly the latter.

I'm sure this also has a lot to do with how mature in the turn-around from recession each area is as well.

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Nation’s Startup Activity Reverses Five-Year Downward Trend, Annual Kauffman Index Reports | Kauffman.org

Nation’s Startup Activity Reverses Five-Year Downward Trend, Annual Kauffman Index Reports | Kauffman.org:

Business Startups are up.

That's great. Entrepreneurship and new business formation is a great advantage to the economy.

The olde adage:  the worst time to start a business is at the onset of a recession. The correlate to that is: the best time to start a business is at the end of a recession. Well, it has taken 6 years but the end of the Great Recession has finally past. Those people who had jobs didn't want to give them up. Now maybe they are willing to step out on their own. Those people who didn't have jobs, may have formed companies out of necessity, not out of strength.

It is interesting that 63% of the new startups were by men. Part of that would be because of the rebound in construction and factories where men dominate. But also, women are generally more risk averse than men. Maybe they will just take another year of healthy economy before they take the plunge.

Minorities, especially Hispanics were up. Blacks and whites, not so much so.

They are saying that 3 out of every 1,000 adults started a business in 2014. That must be annually. (Something said monthly which seems very high; that would be 3.6 out of 100.)

No matter the number, better and more quality businesses that survive and thrive is always better than a large number of startups when most of them fail.

It is always good to see strong healthy signs of progress in an economy that is sputtering a bit.

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Do Cryptocurrencies Such as Bitcoin Have a Future? - WSJ - Crappy currencies

Do Cryptocurrencies Such as Bitcoin Have a Future? - WSJ:

This is a good discussion about bitcoin, a cryptocurrency.

At the current exchange rate, $261 US equals about 1 bitcoin, or 1 USD equals .003 BTC.

During the Great Recession all countries worked hard to devalue their own currencies. A great way to stimulate the domestic economy is to reduce the value of the currency such that exports are stimulated. All right, not a great way, especially if every country in the world wants to do the same. So the currency decisions world-wide were a "race to the bottom" to achieve the most worthless currency fastest.

Of course the whole process is a little more complicated than that, the central banks (the US Federal reserve) can make hard decisions quickly, whereas congress, can't make any reasonable decisions, ever. Decades of federal deficits and trade deficits result in a devaluation of the currency (as the world economy/currencies move to equilibrium)  provided you don't intervene somehow and manipulate the numbers.

China started out with a massive undervalued currency decades ago so that it could grow based on export expansion. Their HUGE savings rate has offset the US low savings rate by subsidizing our Walmart products imported from China. For half a century. At peak times, the yuan has been arguably 40% undervalued against world currencies; however, they have slowly but steadily let the yuan rise. As a result of the persistent trade imbalance, China has ended up with massive amounts of Yankee Dollar$, much of it going to fund the US Federal Debt (US bonds). They have however, been systematically dumping their US Dollars by buying up massive amounts of real estate (mines and factories and homes) around the world.

Japan has had a really strong currency that they finally devalued into submission. They devalued from about 80 yen to the $1US to about 120 today. That's a 50% devaluation of the currency over about 2 years. So now Japan can export again.

The Russian ruble is in rubble. For lots of reasons, but mainly because their income is mainly from oil and gas which has plummeted. Combine that with embargo types of penalties associated with their invasion(s) of Ukraine. Same problems for all oil export countries (OPEC) like Venezuela.

The Euro is in the toilet for lots o reasons, but now they are cranking up the quantitative easing efforts that the US has exercised so ?well? for the last 6 years. One of the last strong currencies in the world is the Swiss Frank, They finally abandoned all hope of sticking to the Euro and their currency revalued 20% overnight in mid January.

So, with all these crappy currencies out there, how is it that the USD is least crappy of the world currencies. One reason is, that as bad as the Dollar is, it is substantially better than the alternatives. Who wants to do business in the Yuan, or the Euro. There has been talk of a currency block by the BRIC countries: Brazil (with the real dropping), Russia (in rubble), India trying to get its country back on strong footing), and China (where everyone worries about a political uprising if/when their growth really does slow).

The US economy is growing strongly, so that's one good reason for having a stronger dollar; but only one. The rest have to do with the USD as the best of the worst. It is good to be less crappy than the rest of the world's currency, but not something to really brag about.

Since the USD is still the worlds choice for purchasing and global transactions, when the USD strengthens it crushes commodity prices. Therefore, the price of oil (in petrodollars) drops. That's not the main reason, but it helps. Even gold drops.

Gold, the best possible alternative currency is worrisome that it doesn't blast from $1,200 way past $2,000 per (troy) ounce. Gold is a great hedge to inflation-prone currencies. It seems like it should be harder to manipulate gold than all the other currencies of the world. But no, everyone is dumping their "safe" money into US treasuries where the return does not cover inflation. And, of course, the US stock market where the dividend yield tents to more than cover inflation and still leave room for upward capital appreciation (stock price going up).

No question, there is a bubble built on quantitative easing around the world. No question it will unwind. For those people/institutions who think it will happen gracefully, history has demonstrated that graceful re-balancing of bubbles is rarely the case.

That said, the US economy appears to be far stronger than most people give credit.

Sometime, somewhere, people are going to get tired of having their currencies and their welfare associated with it manipulated. That's gonna mean a rise of Gold and cyber-currencies as an alternative. Or, maybe everyone will go on believing that all is good in the fairy-tail land of Oz and there is no such thing as a crappy currency? I'll bet you can't wait for the Greek drachma to come back when the EU finally gets tired of their fiscal irresponsibility and kicks them to the curb?

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SU Labs | Singularity University ... Accelerating innovation

SU Labs | Singularity University:

Check out Singularity University... Exponential growth in information and technologies.

Here is the introduction of the Singularity University at the TED conference by Ray Kurzweil in 2009: https://www.youtube.com/watch?v=HMYVH-hBGWg

Very cool

This is interesting changes in technologies and technologies.

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To Incubate or not to Incubate

Marshall Goodman: Ex-administrator For USF Helping Collier County | TheLedger.com:

This answers the age-old questions: To Incubate or NOT to incubate?

A: Incubators definitely have advantages for cluster development and rapid business startup.

But, that doesn't assure that it is a great investment for that governments to jump into.

Where do old business incubator guys go when they get old?

A: They go to Collier County, of course. Think Naples and Big Cypress National Preserve.

Here's a longer version of the story by Maria Perez in the Maples Daily News (and TBO.com).

During that time about 2010, we were trying to meet with Goodman to springboard off of the wild success he was having with 3 incubators. No success, for us on a meeting. All three incubators were rumored to be full and hugely successful. In Highlands County, we were aiming to advance the inventions from USF that were better commercialized in the heartland of Florida, not the cities.

Well let's see how far $3.8M goes in Collier county. With an assurance of 10 to 15 companies within 6 months, how can they possibly go wrong?

Can't wait to see where this one goes.

Keywords: Business Incubator, Economic Development
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WSJ. Eveything that can be invented, has been.

Economists Debate Whether Technology Will Save the World. WSJ article.
It's true. Everything that could be invented, has been. Right?
Well, there's the 11 inventions posted last week. And there is 3d printing, all the applications of nanotechnology...
I'm anxious to see what happens with the death of the computer chip, as we hit the limits of silicon... The next generation of computing should be very interesting. With that type of power at your fingertips, the nature of computing as we know it will change?

Robots?

There are all the applications of sustainability, moving most of us, if not all of us, to a zero footprint world.

One thing that is interesting is the ability to actually apply the masses of knowledge that has been accumulated, but not integrated and applied over time. The best application of the best technology, as and when needed...

Possibilities are endless, literally.

The STEM shortage: Crisis or myth? | Spring 2014

The STEM shortage: Crisis or myth? | Spring 2014:

Wow, give a look at this on STEM jobs and education. (Science, Technology, Engineering and Math education).

So how do we (u.s.a) stem the STEM shortage?

This is an interesting article about the STEM PIPELINE that has a lot of leaking
couplings. 

This is an original article in UoP's Faculty Matters magazine.

Keywords: school, university, training, innovation,  STEM, jobs, economic development,
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Why Won't Yahoo! Let Employees Work From Home? - Businessweek

Why Won't Yahoo! Let Employees Work From Home? - Businessweek:

Boy Mayer is gonna cause a lot of shake here with the everyone-has-to-travel-to-work policy.

Apparently (Today Show) she now as a nursery set up next door to her office for her new convenience. That helps new parents, maybe, but not the ones with kids in school or those people who live a longer way from the office.

But Mayer is shaking it up.

There has long been the debate about the down side of work-at-home (WAH). And a tech leader like Yahoo  might just be a place to face-to-face interaction that is lost from WAH.

But, I fear that making everyone drive to work is a major setback to telecommuting efforts that are so very beneficial to the efforts of sustainability.

Studies show that the true costs of telecommuting are far closer to $40,000 per year than to the $5,000 cost of gas. Most of that savings goes to the employer. Closer to $45,000 if you want to include the less-tangible costs of externalities such as infrastructure and greenhouse gases (GHGs).

Key words:  WAH, telecommuting. Work-at-home, sustainability, carbon footprint, GHG, teleworking, remote working, time shifting.
First posted at www.SustainZine.com. Repeated here.
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IP Creates Jobs for America | BIOtechNow

IP Creates Jobs for America | BIOtechNow: "In May, the Global Intellectual Property Center (GIPC) was proud to unveil the results of our state intellectual property (IP) jobs research, which has been a year in the making. The study, IP Creates Jobs for America, provides real, tangible evidence that the economic benefits of IP are broad and far-reaching."

Go here for the original GIPC report and the interactive US Map.

Key points related to IP Job creation and value generation:

• Jobs created: 914k
• Output: $75B
• Exports: 75.3%
• Avg Wage: $44k

Interesting is the number of IP jobs created in some state. Of course, CA, FL, NY, MA and TX. But the Great Lakes area has a LOT of innovation as well.

This is some really great information for those who are IP proponents! (And those who question the value of IP to have more to think about.)

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