The road to quality patents

The noisy legislative debate on patent reform in the U.S. Congress is without a doubt critical to America’s long-term economic future.

Patents are engines for economic productivity. Countries that encourage inventors and entrepreneurs to patent their innovations will be among the winners in the highly competitive global marketplace. That’s why the stakes are so high in the outcome of the current legislative deliberations on patent reform bills in the U.S. Congress.

The America Invents Act of 2011 introduced significant reforms to the patenting process, as well as controversy. The bill’s “first to file” provision replaces the “first to invent” doctrine and gives priority to the first inventor to file a patent application. It is also at the center of the ongoing debate on whether current patent laws give unfair advantage to large companies over smaller companies and inventors. Supporters, however, argue that the “first to file” provision brings U.S. laws into sync with the rest of the world and will speed up the patent examination process and reduce the backlog of patent applications.

Patent Trolls
The so-called “patent trolls” are the current focus of the patent reform debate. A patent troll is a company or individual that buys patents but does not use them to manufacture products or provide services. Instead, they file infringement lawsuits against companies that are developing innovations of their original patented idea in order to collect licensing fees and/or to block them from patenting a more original concept. Critics characterize patent trolls as drags on economic productivity that create disincentives for the development of new and innovative technologies.

The bills working their way through the U.S. House of Representatives and the U.S. Senate will likely provide some relief from patent trolls by giving more clarity as to what behaviors constitute a “patent troll” and to implement reforms to combat frivolous lawsuits and other forms of intimidation.

The road to quality patents is not just about legislative reforms to encourage research, development and investment. Another key step along the way is the quality of the patent examination process and the metrics used to measure patent quality, as well as how an applicant is treated during the application process and after the patent is granted.

USPTO Campaign to Improve Patent Quality
The USPTO is leading an ongoing public discussion on what needs to be done to improve the quality of patents. At the two-day Patent Quality Summit in March, USPTO Director Michele Lee told participants in the auditorium and on the web:

“Now, to set the stage for the discussions and brainstorming art this two-day Summit, let me just say up front that we all recognize there is no “silver bullet” solution here. Creating a world-class quality patent system means that we need to think big and keep all options on the table. If I learned anything from my time in the labs and at Google, it’s that no idea is a bad idea. We all benefit when everyone speaks up and offers their insights.” (Remarks by USPTO Director Michele K. Lee at The Patent Quality Summit, March 25, 2015.)

The USPTO led effort is called the Enhanced Patent Quality Initiative. Director Lee said the summit was not a “one and done” event and that enhancing patent quality was a top priority for her and USPTO Commissioner for Patents Peggy Focarino. For any individual or company that relies on patents to drive their business and dreams in the competitive global marketplace, this is a worthwhile conversation to join. The link to the Enhanced Patent Quality Initiative is:

Growing technology sector bubble and the demise of a mobile phone icon

Was yesterday’s announcement that Avago Technologies Ltd had purchased tech company Broadcom for a record $37 billion another signal that the marketplace is thriving or is it another step towards a market bubble ready to burst?

Shareholders at Avago and Broadcom are likely to be happy, as are their lawyers and investment bankers, at least in the short-term.

Cheers for Tech Market Growth But Also Concerns
However, the market may not be as sanguine about this development. In a May 28, 2015 Bloomberg Business News report, Alex Gauna, an analyst at JMP Securities in San Francisco said about the largest ever acquisition of a technology company: “I’ve got my misgivings, this feels very frothy for me….This seems like a stretch”.

While the tech industry crash of the early 1990s is still a vivid memory for many, the fear of being left behind as new technologies develop and consumer demands change is propelling a race to get ahead of the competition.

Is this fear blinding us to signals telling us that the tech industry’s trajectory is leading to a sector collapse and possible spillover into the larger economy? In the pre-2009 Great Recession days, many big banks and investment firms rushed lemming like over the financial cliff to cash in on high-risk mortgage securities. This blind rush for profits took them down along with the world economy.

We are collectively still processing the lessons learned from the Great Recession of 2009. One of them was that we are all subject to delusional group think. Warning bells were ringing loudly that a major financial collapse was imminent, but they were ignored. Many in the financial sector knew the collateralized debt obligations (CDOs) and credit-default swaps (CDSs) were extremely unstable, but they were making lots of money and investors wanted in on the action. Bankers and investors deluded themselves in the belief that the big banks couldn’t fail and the markets would self correct before collapsing. We know how that story ended.

As the Great Recession of 2009 has changed the world, so has rapidly changing technology and consumer expectations. Probably the most dramatic example has been the mobile smart phone market. In the mid-2000s, the dominant players were Nokia, Motorola and Blackberry. Today, the list includes Apple, Samsung, LG, HTC, Sony and Nexus (Google & Motorola) and several fast-growing Chinese companies.

The Agonizing Decent of a Global Icon
Why did those established mobile telephone giants lose to the market upstarts? The story of how one of those bright stars quickly lost its luster is told in a recently released book, Losing The Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of Blackberry by Jacquie McNish and Sean Silcoff of the Globe and Mail newspaper in Toronto, Canada.

I highly recommend this book to anyone wanting to gain a better understanding of how the leadership of a good company became complacent and failed to understand changing consumer needs and technologies in the digital age and now runs the risk of being ruthlessly set aside like the iconic Kodak company. As a former but happy owner of a Blackberry smart phone, I write this comment with a feeling of sadness over the turn of events leading to the demise of a good company.

What Went Wrong
The leadership of Research In Motion (RIM), the makers of the Blackberry, was caught completely flatfooted by the release of Apple’s IPhone in 2007. They not only did not understand how the IPhone was able to download music, videos and maps, they did not know that ATT, one of their major customers, would sign a multi-year contract with Apple to sell IPhones.

Even sitting at the top of the mobile phone marketplace, RIM seemed to be wearing blinders. They missed the business implications of the tectonic shift underway in consumer needs and expectations, and had no R&D efforts to make products that would attract both their core business customers and other audiences experiencing this wave of change. RIM’s response to the IPhone, the Storm, was rushed and ultimately failed, further eroding the brand in the eyes of the consumer. RIM’s competitive intelligence gathering appears to have focused only on existing competitors, and not on potential competitors.

The story of the RIM’s collapse is also a story about Apple’s success. Apple listened to the signals coming from consumers and technology developments. They innovated to create products that fit their brand image of high quality and aesthetic beauty. They unified the wildly popular ITunes, video content and apps into the IPhone raising the bar to new levels for existing and potential mobile phone producers.

The Blackberry saga is a useful case study for anyone trying to understand the dynamics and challenges of doing business in the early 21st Century. I look forward to following developments at Blackberry and the mobile phone sector, as well as the impact of the Avago-Broadcom deal on the technology sector. At the moment, the signals are mixed.

What Bold Leadership and Strategic Vision Can Accomplish

President Obama’s proposal to map the human brain is a bold challenge to use America’s wealth of talent, creativity and spirit of innovation to go places where few have gone before.

His call to action echoed President Kennedy’s 1961 speech to the Congress when he challenged America to put a man on the moon by the end of the decade.

From that day forward, Kennedy’s vision of America’s future in outer space was not just his but also the nation’s. The public euphoria over the space program, as well as winning the space race with the Soviets, kept an enormously expensive government program fully funded for over forty years. New industries and companies were started and hundreds of thousands of jobs created.

Obama’s “inner” space race to fast track research on how the brain works could make us healthier. Finding cures for devastating neurological diseases like Alzheimer’s, for example, could also have economic benefits to the country. A study conducted by the Rand Corporation found that it costs American families and society between $152 and $215 billion per year to care for family members with Alzheimer’s disease.

Another hopeful outcome would be to discover new treatments for post-traumatic stress disorder. Many returning combat veterans suffer from PTSD. Helping them to reintegrate them into civilian life as healthy and productive members of society is the right moral choice, as well as good economics. As the war in Afghanistan winds down, the number of returning veterans suffering for PTSD is likely to rise. New and better treatment techniques for PTSD could also reduce the burden on the already stretched healthcare system and to taxpayers.

President Obama has proposed to America an exciting journey. He shared a view of the future when one day we might have cures for Alzheimer’s, PTSD and other yet unknown discoveries, and be the global leader in neurological science. Which will also grow industries and create jobs. And like a good leader, he gave us his strategic vision and asked us to work with him to develop a strategy.

I hope the Congress has the good sense to fund the President’s request for start up funds. They only need to look at the ROI created by the space program to know that this is a good investment in America’s future.

Congress can jump start america’s sputtering job creation engine by showing leadership now

The May 2013 jobs report was encouraging but showed that the economy was not growing enough for employers to hire more workers. I join with millions of other Americans in giving a sigh of relief that the economic recovery is gaining steam. After being on the brink of a depression and then in a deep and stubborn recession, the U.S. economy’s small but positive economic growth is something to be happy about. The unemployment rate continues to stay below 8% and job creation numbers are up, as are consumer spending and housing sales. This is all good news.

The bad news is that while there has been a rise in the number of new jobs, the pace of job creation has not been strong enough to bring America back to full employment. Even though the economic recovery is admittedly slow, isn’t it reasonable to think that in the next few years we should be able to reach full employment? No, say a number of experts who believe that full employment may be several years away.

One of the more troubling problems for the economy to reach full employment is the drop in new company start-ups, which are engines of job creation. Risk taking is an essential factor in economic growth and has fueled America’s economic growth since the Colonial period. However, according to recent research, Americans are becoming risk averse. Not only is the number of new company start-ups down, fewer Americans are taking the risk of relocating to areas with low unemployment to look for jobs.

This pull back from risk taking is thought to be a factor in the U.S. economy’s slow recovery from the recent financial downturn and has played a role in delaying recoveries from past economic downturns in the 20th Century. Highly regarded experts on entrepreneurism at the Kaufman Foundation, Harvard, among many others, are seeing a pattern. More Americans are placing a higher value on security and less willing to take risks (Read more about this in Risk-Averse Culture Infects U.S. Workers, Entrepreneurs, Wall Street Journal, June 3, 2013 http://online.wsj.com/article/SB10001424127887324031404578481162903760052.html).

America’s spirit of entrepreneurialism is certainly far from dead. In parts of the country where new business start ups are common, such as the San Francisco Bay Area, jobs are both created and destroyed by the cycle of new ventures and failed businesses, but there are still net gains in jobs. But in other parts of the country that don’t have this level of entrepreneurial activity and rely on existing businesses for job growth, the net increase in jobs is much lower, according to research conducted by Harvard economist Edward Glaeser and two colleagues. The overall affect is that some geographic pockets of the country are benefiting from job growth but are not necessarily drawing workers from other less productive areas of the country to take those new jobs.

A feeling of confidence in themselves and the economy is what drives risk taking by an entrepreneur introducing a new product or service or the laid off worker migrating to a state with a strong economy like Texas to find a job or the employer considering whether to hire more workers.

For all of the talk by commentators on the effectiveness or ineffectiveness of the Administration’s fiscal and monetary policies to stimulate the economy, the biggest confidence booster would be for the U.S. Congress to move beyond political ideology and find common ground to pass legislation in the near-term to address the budget deficit, the looming entitlement crisis and to make much need reforms to the federal tax system. This would go a long ways towards restoring confidence in the future and boosting consumer demand so that entrepreneurs, job seekers and employers will take risks to propel the economy by starting new businesses, creating new jobs and hiring more workers.

The U.S. Congress’ dysfunctional decision-making process

Picture What are some of the lessons so far from the stalemate on the government shutdown and debt ceiling debate between the Congress and the White House?

The first is that extremely bright and experienced people, Democrats or Republicans, are no less susceptible to organizational barriers to making important decisions than average people.

The fortress mentality of the Democrats to protect against anything the Republicans offer as “holding a gun against our heads” is unproductive. The possibility that one of the Republican’s demands could help to solve the partisan stalemate is unfortunately incomprehensible to the Democratic Party leadership.

The Republican Party’s near messianic goal of scuttling the Affordable Healthcare Act (AHA) is an example of Noble Laureate Herbert Simon’s concept of “bounded rationality, ” which is the individual’s or an organization’s limited perception of facts and circumstances of a reality that is far more complex and multifaceted. The end result is a flawed sense of reality and poor decision-making.

The Tea Party faction of the House Republicans and the Senate are the true believers in this cause. The fervor and single-mindedness of true believers have changed the world for the better. Lynching, police dogs and legal segregation did not stop the leaders and followers of Martin Luther King from winning civil rights for people of color. It has also resulted in tragic consequences, such as the rise of the Nazis in Germany.

Indiana University legal scholar Gerard Magliocca recently argued in the Washington Post that Republicans have the right to lawfully attempt to overturn the AHA, or any legislation that is considered to be the law of the land. The AHA, he asserts, is not settled law, which is legislation that did not have bi-partisan support or broad acceptance from society, such as the Civil Rights Act of 1964.

Fair enough. A Democratic majority in the U.S. Congress passed the AHA. The American public remains deeply split on the new health care law. Thus, according to Magliocca, the true believers in the Republican Party have the right to use any legal tactic to delay or stop the AHA.

Does that mean a small but powerful faction of Republican true believers should use their influence to force the adoption of their political agenda at the expense of major negative economic consequences for the United States and the global economy?

The second lesson is that if a groupthink mentality becomes the basis of an organization’s decision-making process then its ability to make rational decisions will be lost. The true believers among House and Senate Republicans stand for a radical, winner take all strategy, which is a total contradiction to the Founding Father’s vision of the legislative process of debate and compromise. The fact that the U.S. economy and potentially the global economy could be severely undermined by their actions is ignored by them.

The last and perhaps the most important lesson is that the time for true bipartisan action to resolve this crisis is long overdue. To do this, Congressional Democrats and Republicans must avoid falling into the same dysfunctional thinking trap as the Tea Party faction of the Republican Party.

Cyber attacks threaten national security and my family’s security as well

What does Facebook,The New York Times and I have in common? We all have been victims of cyber attacks.

Just before the Thanksgiving holiday, my bank’s security team alerted me that someone was using a phony credit card with my name and account number on it in a three-state spending spree. But that’s not all. Over the past three months I have received letters from a major software company and a different bank about data breaches involving my personal information. Four years before that I had two back-to-back incidents of someone posing as me to withdraw funds from my bank account by depositing a bogus check and withdrawing cash.

Earlier this year, the Director of U.S. National Intelligence, James Clapper, identified cyber attacks as America’s number one security threat. Some foreign governments and criminal groups have been charged with being behind cyber espionage efforts to steal not only state secrets, but also the IPR and trade secrets from American businesses. A 2013 study by Verizon showed that there were 621 confirmed data breaches in 2012 and over 47,000 reported “security incidents”. In a report by the U.S. Congressional Research Service, Cybersecurity: Authoritative Reports and Resources (http://www.fas.org/sgp/crs/misc/R42507.pdf), studies conducted by government and the private sector showed the breadth of the threat posed by cyber attacks to national security, financial system and civil infrastructure, such as electricity and water supplies, as well as the troubling lack of awareness and urgency by business to the threat posed by cyber attacks.

It’s no surprise that the U.S. government has had to play catch up on a global problem of this magnitude that has been affecting individuals and families for several years. But even more startling is that the business community is still waking up to the threat cyber attacks pose to their IPR and financial health. The good news that government and increasingly business are now motivated to take action against identity theft and personal data breaches.

As my experience with cyber attacks would suggest, I am no longer surprised by new episodes of identify theft and breaches of personal data. About half the U.S. population who shop online hold similar views. According to research conducted in 2013 by the consumer research firm Forrester, 49% of online shoppers have concerns about security and privacy. As consumer awareness of cybercrime rises, it suggests that the public’s unease about the safety of their personal information will continue to grow.

A higher level of public concern about the threat of cyber attacks will be a good thing. A large percentage of business, government and consumers are already relying on the Internet for commerce, data storage and communications. New technologies coming on line will make us even more dependent upon the Internet for virtually all aspects of our lives. Public pressure on government and the private sector for better protections against cybercriminals will intensify. Another side benefit will be an informed public about cyber attacks who will be motivated to take steps to reduce their exposure.

The bad guys use high and low tech methods to get access to your financial and personal information. Some of the most common methods are totally low tech and also the easiest to prevent. For example, throwing away credit card receipts and bank statements into the trash or paper-recycling bin is like handing over your personal information to the criminals. They covertly search through discarded documents to find sensitive information and then use it to defraud your bank or other financial institution that you do business with. They also sell your personal information to brokers who in turn sell it on the black market. Remember, all financial and personal documents should never be thrown out as trash or recycling. Always shred these documents. In our house, we also use them as kindling for the fireplace.

Another precautionary measure that you can take to reduce your exposure is to never give personal and financial information over the phone or online unless you know for certain the caller or the website represent a known and trusted organization. This may entail contacting your bank, credit cards and favorite charities to find out whether they will call, use email or the postal service to contact you about your account. But it will be time well spent if it can help to foil an attempt by the bad guys to get access to your personal information.

Email messages are frequently used to dupe consumers into sharing their personal information. The email that comes from what convincingly looks like your bank or another trusted source, that asks you to down load an account statement or other document, could instead result in downloading malware, which gives the bad guys access to sensitive information stored on your computer. These fraudulent emails are known as phishing, and can compromise the security of your confidential information. Again, it’s important to confirm with bank, credit cards and other organizations handling your sensitive data what methods of communications they will use to contact you and information on what kinds of suspicious emails to watch out for.

Use online technology to help you thwart attempts by the bad guys to steal your personal information. If you manage your bank accounts, credit cards and investments online, you should regularly check account balances and the status of payments and deposits. If you find a suspicious payment or withdrawal, you can immediately report it and have the account closed. Change your passwords on a regular basis. Unfortunately, no amount of preventative measures can protect you from data breaches. But if you are constantly monitoring all of your accounts, there is a good chance that you will be able to notify the bank or financial institution quickly enough to minimize the damage.

If you discover a breach of personal data and identity theft, you should report it to the U.S. Federal Trade Commission (FTC) and to local law enforcement. The FTC is also a great resource on how to reduce your exposure to personal data breaches and identity theft (http://www.consumer.ftc.gov/features/feature-0014-identity-theft).

In the 21st Century, the robbers will not wear masks and put a gun in your face demanding cash. They will sit in front of computer screens and hack into IT systems to steal your financial and personal information and ultimately your money. The bad news is that hackers are constantly trying to hack into your accounts. The good news is that the majority of the time, they fail. The bottom line is to not be complacent and to be proactive about reducing your exposures. Start right now!

Why Turkey’s political crisis should matter to Americans

If every time you see a news story on the political crisis that could destabilize Turkey, you go to the next news article, because you think what goes on there has no impact on your business, job or family, I suggest you consider the following:

• Turkey, a majority Muslim country has been a stabilizing influence in the volatile Middle East, shares a border with Iraq, Syria and Iran. It was the only Muslim country to have direct diplomatic relations with Israel prior to the signing of the peace agreement between Egypt and Israel in 1979.

• Turkey has provided a safe haven for the tens of thousands of refugees fleeing from Syria’s brutal civil war and was a vocal critic of Syria’s use of chemical weapons.

• Turkey is a strong on-the-ground political and military counterweight to the dangerous chaos that has engulfed Syria and threatens to ignite civil war in Lebanon, as well as growing violence in Iraq.

In short, a more violent and destabilized Middle East increases the potential for elevating America’s military presence, which would be a bitter pill after more than a decade of war in Iraq and Afghanistan. The risk of a Middle East region wide armed conflict is higher without the calming influence of a politically moderate Turkey.

Turkey plays a critical role in supporting Europe’s economy. The EU and Turkey are major trading partners. Turkey is also a major source of guest workers to supplement Europe’s declining labor force, which is critical to supporting a recovery of Europe’s economy. An economically healthy Europe is vital to the stability of the global economy and to grow the U.S. economy.

Only Turkey’s leaders and citizens can solve its political crisis. We can only hope that cooler heads prevail and Turkey stays on a moderate political course.