IP Week – Trends toward the Mean
3rd August 2012 · 0 Comments
The Apple-Samsung trial has made it even to the late local Austin TV news, which is usually dominated by weather, animal stories, and UT football. Stories like this are drawing attention to the value of IP and what can or can’t be protected. I’ve had some relevant discussions on that point with several local startups over the past few weeks.
And, the NBC Olympics coverage takes the cake with respect to their trying to protect their rights for which they paid so much. I know they’ve been scraping off YouTube any videos with Olympic footage, but this all hit home, literally, when I discovered that Time Warner Cable is sometimes blocking my DVR from recording the daytime segments on assorted NBC channels. If any sports are of particular interest to me, I no longer have the choice of time shifting my viewing for my convenience.
The cost of filing a patent in both dollars and time is significant. Having primarily been in pure software businesses, I’ve filed trademarks and always taken care of legal issues with employees like work-for-hire and non-compete agreements, but I’ve adhered to the theory that technology would have moved on long before a software patent provided any utility to me. Keep in mind that a patent is only a hunting license; you have to spend even more money to start a shooting war with a competitor if you think your work has been unfairly copied.
The problem of protecting your creative work is only magnified by the sheer volume and fast pace of change in mobile software products. One entrepreneur I know is providing demo products with his latest and greatest ideas disabled, for fear those ideas will be copied by his competitors. He’s seen the competition start to look more and more like his work as each month passes. I personally disagree with this approach. Apps can be developed so fast now that his competition is very much a moving target anyway, and why not try to put your best work out there and stay ahead of them?
One issue is that with more than a million apps, and many with similar functions, all seem to trend toward the mean in terms of both functionality and look & feel. If you’re creating a P2P mobile app to knock off Craigslist, there are only so many logical ways you can categorize items for sellers to list and buyers to purchase. You’re dealing with very limited real estate on the smart phone screen, and you have to be mindful of bandwidth issues as well. On top of that, graphic designers seem to follow their own trends; if shades of blue are the most popular color schemes this year, it will just naturally cause many apps to look rather similar on first glance.
The true test is how you differentiate your product in the minds of your end users. They don’t care about the underlying IP and what happens on the backend, and they may only care about a subset of features common across your offering and its five closest substitutes. You can never really win the feature game. Gowalla here in Austin was a prime example of that. Their team was highly talented and created probably the best location check-in product, but Foursquare won that war for other reasons, and the Gowallans are now part of Facebook.
All that requires your focus on the complete ecosystem that surrounds your product or service offering – the way you acquire and retain customers, your ability to deliver pure quality that just works reliably as advertised, and your flair for marketing. That latter point cannot be overemphasized. As you may know, I’m rather interested in cycling. Lots of the frames and other components of many fancy Italian bikes that may cost $10K are actually made in China and perhaps just blessed by Italian craftsmen. For all I know they may all be coming out of the same factory and just shipped off to different destinations for different labeling. They’re sold by making you think you could win the Tour de France with the latest and lightest equipment, but those of us who have regular jobs and aren’t training 5 hours a day will never actually enjoy measurable performance gains. What we’re paying for if we buy those bikes is their marketing expense and the good feeling we get when “our” brand wins the Tour.
And what happens is some court makes a decision in the patent battles that removes one of your target mobile platforms from the market or requires a dramatic change in its UI? Hopefully just some large dollars will change hands between the belligerents and the products we like and for which we are developing will remain available, but we may not be so fortunate. Any matter that gets as far as a trial can have an unexpected outcome and for sure can have plenty of unintended consequences.
Should you be wary of patents that are lurking out there? In the early interactive media days there was a patent that seemed to cover the basic notion of computer displayed digital media. It was widely discussed at the time, in that it applied to something so obvious, but to my knowledge nothing ever became of it. It predated the Internet by many years. Some early issued patents seem to be so broad as to be easily challenged in the legal process. Now we see other trends at work where the fundamentals of a patent portfolio have been undermined by complete changes in the technology components. For example, in the home automation space, ADT holds a portfolio of patents that were issued during a closed source period; now one can go to Home Depot and buy open source components and essentially arrive at the same functionality. I know that patents are more difficult to enforce against basic enabling technologies that ought to be reasonably available to all, but I have no idea how the courts address situations where the enabling technologies have become completely different but result in essentially the same experience for a consumer.
So, I wouldn’t suggest you become obsessed about IP issues with your startup, but being mindful of them and paying attention to the high profile cases is a prudent move. Trending toward the “mean” as per my headline can also imply “mean-spirited” behavior in the tech industry.
<Taking no IP risk, I made this photo myself>