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If you believe companies formed to litigate patent suits aren’t worth a lick of spit, then meet the new Dr. Evil: CopyTele Inc. (CTI), which sued Microsoft on Wednesday over encryption technologies used in Skype.
But to Rob Berman, the company’s chief executive officer, CTI is actually standing up for the little guy. “When small companies file [patent infringement] suits, they’re called patent trolls,” Berman said in an interview. “When big companies assert their technology, it’s called good business.”
What some call “non-practicing entities,” others call “patent trolls.” Either way, companies like CTI don’t actually make anything; they merely buy up patent portfolios, go after companies they believe are infringing, convince others to license the patents and use the proceeds to fund more purchases and litigation. Their entire business is quite literally predicated on suing people, or at least threatening to. For them, patents are just another commodity to buy and sell. And it’s big business: the patent industry racks up $1.33 million per average settlement, and about $1.75 million per defense, according to companies like Google.
That kind of strategy drives entrepreneurs and established companies up the wall – as they see it, instead of working to add value, patent trolls are often seen as parasites feeding off the efforts and innovation of others.
That’s no doubt why U.S. Sen. Charles Schumer (D-NY) will introduce a legislative countermeasure next week to subject patent suits to U.S. Patent & Trademark Office (USPTO) oversight. The USPTO would be required to “vet” patent suits, apparently trying to determine the validity of affected patents before the suit got to court.
CopyTele’s Checkered History
Is there more to the story? That depends on who’s doing the telling. CTI, in particular, has a long and checkered history.
If you Google CopyTele, you’ll receive the following summary: “Designs and develops telecommunications products incorporating ultra-high resolution charged particle flat panel displays.” That’s what CopyTele used to do. In September of 2012, Berman and two other veterans from the so-called “patent monetization” business were brought in to revitalize the company.
Turns out that CopyTele was sitting on 53 patents that the company didn’t know what to do with. CopyTele’s board decided to make a management change, kicking out the 85-year-old chief executive Denis Krusos in the process. But before you feel too sorry for the senior citizen, take a closer look at CopyTele’s sordid past. According to a fascinating 1986 Fortune tale, Krusos claimed at least some of his business ideas were founded on “visions” he had while walking the Greek isles, and his’ Steve Jobs’-style launches of revolutionary mobile displays were in fact non-working prototypes. Meanwhile, CopyTele’s stock was pumped and dumped by outside investors, the magazine wrote.
Nevertheless, CopyTele still had the “patented electrophoretic display technologies” that it had designed. Those patents are at the center of suits the company has filed against display manufacturer AU Optronics (whose own executives have been found guilty of price fixing) and E Ink Holdings. But that was only the beginning. Since then, CopyTele has gone on to acquire windows patents (the kind you look through, not click) as well as five other patent collections. To date, CTI has litigated only its own display patents, as well as the encryption patents it bought that are at the heart of the Microsoft suit. The others will be enforced in the future, Berman said.
Berman’s Patent-Troll Credentials
Berman, meanwhile, has taken his own fascinating journey to this crossroads. He was an early employee of Acacia Technologies Group, which bought up the patent rights to the V-chip, the electronic nanny that was supposed to automatically weed out television programs that were inappropriate for children. Berman, who was at Acacia from 2000 to 2007, launched the company’s “patent assertion business,” demanding that potential V-chip licensees pay up.
In 2002, Acacia took on the porn industry, even winning over Larry Flynt, who licensed Acacia’s streaming media patents in 2003. “That was me,” Berman recalled cheerfully, describing how he “went undercover,” visiting adult-industry trade shows to “better understand the business… It was a rough job, but somebody had to do it.”
Are Patents Just Another Form Of Currency?
As Berman sees it, there’s nothing wrong with maximizing the value of patents. Without those patent suits, Berman claimed, CopyTele would be in bankruptcy.
To him, patents are just another way of doing business. “We’ve gone from a product-based society to a service-based society to a knowledge-based economy,” he said. “One of the most effective ways of protecting knowledge is patents… I don’t think that there’s any other time in history, except for maybe after the Revolutionary War, where patents have played as important a role as they do today.”
Basically, Berman’s position boils down to this: Companies like CopyTele and Acacia buy up patents from the little guys, giving small patent inventors the chance to make money that they’d otherwise never see.
He conveniently ignores how “patent trolls” effectively levy tariffs on other, legitimate products, adding costs that eventually get passed along to consumers – and not really contributing in any way to innovation or productivity or any other social good.
Legal, But That Don’t Make It Right
But Berman is correct in pointing out that that’s the way the world currently works. While he may be exploiting legal loopholes, what patent trolls do is not illegal. Of course, that doesn’t necessarily make it right, either.
The conundrum seems to require more legislation – hence Schumer’s bill to vet patent suits before they proceed to court. But new laws can have their own pitfalls – for example, if some patents are intrinsically “bogus,” maybe the better approach would be to tighten restrictions on granting patents in the first place.
Maybe the answer isn’t to target the patent trolls, no matter how loathsome, who are only exploiting patent law as it stands. Maybe the real need is a clearer definition of what role patents should play? Or a re-evaluation of whether or not software patents should even be granted? Berman thinks that legislation should be enacted to allow companies to discuss patent settlements privately, without the need to first go to court.
In the end, it all comes down to how you see the world. Is a business’ obligation only to follow the letter of the law, or must it also behave morally as well as legally? As a company, Berman says, CTI has an obligation to maximize revenues for shareholders without breaking the law. In his eyes, at least, that’s all there is to it.
Troll image via Flickr.
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Curiosity: What’s Inside The Cube, the one-part-smartphone-game, one-part-social-experiment that launched last November, is getting its most substantial update yet. In a move aimed at bringing the contest to a faster close, UK studio 22Cans has accelerated the game to its last 50 layers, in effect erasing the months and months of players tapping away on the giant cube it would have taken to get to the center.
This World Is Predicted To End On May 21
The studio’s current estimated end date – unless player participation unexpectedly spikes – is May 21, which coincidentally happens to be the same day Microsoft will announce its next-generation Xbox console.
“It has been an elongated, protracted experiment in curiosity, but if I’m someone whose fingers are bleeding now, enough is enough,” said 22Cans founder Peter Molyneux, known primarily for creating the Fable game series before leaving Microsoft last year to found the independent studio. “We decided that we could have just left it going and probably less and less people would be fascinated… or we could set a layer and it would be a race to the center,” he added. The new update comes on the heels of last week’s quiet addition to the game that let players pay to both remove and add cubelets to the current layer. This feature will remain for some, but not all, of the final 50 layers.
The idea behind Curiosity is simple: one giant cube, with a secret prize at its center, was handed over to millions of players who all collaboratively chip away at its many layers by tapping one piece (or cubelet) at a time, of which there were 68 billion spread out over hundreds of layers. Only the lucky person to tap the last cubelet gets to see what’s inside, and Molyneux has often described that mystery in grandiose fashion, referring to it as “life changing.”
Curiousity was meant to be both a social experiment in massively multiplayer smartphones games as well as a learning experience for 22Cans, which announced its first multiplatform title Godus on Kickstarter shortly after launching Curiosity.
Curiosity Now About Learning Different Things
“Part of our motivation in doing Curiosity was to learn how to do these things for Godus, like learning how to connect people, how to scale up our servers,” Molyneux said. Despite massive server issues hampering Curiosity’s launch, the game picked up steam and garnered more than 3 million downloads within one month. Godus also surpassed its Kickstarter goal of £450,000 on the final day, securing 22Cans’ future in cross-platform game development.
With only 50 layers to go, the race to the finish will tight, raising valid concerns that the final tap that wins it all might not be recorded accurately. ”When we get to the final five layers, we’ll have something called Cube Watch,” Molyneux explained. “We’ll be watching it 24 hours a day and we’ll be sitting in the office waiting for that end to come.”
He stressed that the studio has taken substantial measures to protect against cheating and will be able to validate the tapper of the final cubelet as soon as it happens. Players will also get a real-time reminder in the white space around the cube of how many layers are left and what the estimated lifespan of the experiment is.
“In our hyper-connected world, what happens when we put an objective that is so insanely far off that it becomes almost meaningless?” Now that the objective is almost within grasp, Curiosity is raising new questions about the player motivation and connectedness players await their chance to finally see what’s inside the cube.
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Slingshot SEO: New Brand 'Defines the Future'
Inside INdiana Business (press release)
One of the founders of Indianapolis-based Slingshot SEO says the launch of a partner brand better defines the company's scope of services. Market Research Director Aaron Anders says digitalrelevance will focus on increasing brand awareness for clients …
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Several big name exhibitors once again flocked to SES New York. Companies like Bing, BrightEdge, Conductor, iCrossing, Internet Marketing Ninjas and many more showcased how their tool or services could help attendees be better at their jobs.
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Slingshot SEO Announces New Leadership
Inside INdiana Business (press release)
Digital marketing company Slingshot SEO has named co-founder Jeremy Dearringer chief executive officer. He replaces Don Kane, who has announced his departure after 16 months. Dearringer says his desire to be more involved with the Indianapolis …
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Google’s key, game-winning insight, the one that ultimately led to its dominance in web search, was that links were really votes, that some votes deserved more influence than others, and that you could actually map the relationship between these links/votes by creating something called a…
Please visit Search Engine Land for the full article.
Remember that top secret Google Glass Foundry event?
You know, the one for developers for Google’s cool new augmented reality (AR) glasses? The one with the ultra-strict non-disclosure agreement (NDA) that we’d heard nary a peep out of since the second half of the event wrapped up at the beginning of this month? On its Google+ Developers account, the company that fully intends to whisk us all into a wearable future of computing just gave us a little peek at what went down at the San Francisco and New York Google Glass hackathons.
Meet The Google Glass Pioneers
The pair of two-day events invited about 40 developers to set up camp at Google’s respective bicoastal offices, handed them each a set of Google’s AR visors and… well, we’re still not exactly sure what took place. But we’re betting that the hackathons yielded Google Glass applications far more compelling than Sergey Brin’s obsession with live-streamed video stunts from Google I/O last year.
According to the brief official Google+ recap, Foundry attendees broke into teams and dreamt up more than 80 new tricks for Google Glass. Participants in the hackathons scored special “Pioneer” edition glass bars, like the placeholders handed out at Google’s I/O conference.
The eight teams that came out on top won the grand prize of a free pair of the futuristic AR devices, which went on pre-order at Google I/O for $1,500 (though we’ve yet to pay a dime of that). The Glass API is still on lockdown for the time being, so don’t expect to hear too much unless you can get your hands on a Medieval torture device and a Pioneer or two.
SXSW And Google Glass
As Google Glass Explorer #961, I can hardly wait to get my hands (ears?) on the things. While no release date is set yet for those of us who pre-ordered at I/O, Google will apparently be holding a SXSW Interactive session for developing for its newest, coolest platform. Here’s the description for the SXSW Google Glass event, hosted by Google Senior Developer Advocate Timothy Jordan:
“By bringing technology closer, we can get it out of the way. This is what Glass does. It provides an experience to the user that’s there when they want it, and unobtrusive when they don’t. In doing so, Glass creates a new kind of computing that’s more about people than it is about computers. In this session, we’ll look at Glass in people’s lives with emphasis on how to use the cloud API to build new experiences and bring people closer together.”
Below are more new photos from the Google Glass foundry events. Now that we’ve got Google Glass “pioneers” my status as a Google Glass “Explorer” suddenly feels a little inadequate. You can view the full album on Google+.
Photos by Daniel Gaines Photography and Philip Montgomery.
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How does a small app developer manage to distinguish itself on the new Microsoft Office app store? Work fast, track competitors and design a great icon.
One of the features of the new Microsoft Office revision is the Office Store, where users can download plugins and other tools to supplement the core Office experience. Microsoft is rolling out its subscription service, Office 365, to consumers on Tuesday, January 29; business users should receive it a bit later.
To a small app developer like Gliffy, that means waves of curious customers will soon be searching the Office App Store for new tools. And Gliffy has worked to put itself at the top of the heap – even as Microsoft has removed one of the key tools for gauging its success. When Gliffy first published its diagram and flowcahrt app on the platform, Microsoft displayed the number of times users had downloaded its app, as well as its competitors. Now, Microsoft has removed that visibility; Gliffy knows how many times its app has been downloaded, but not its competitors, meaning that it’s flying blind.
That doesn’t mean Gliffy isn’t pleased with its success. Users have downloaded the Gliffy plug-in more than 1,000 times. “We got where we wanted to be,” said Ron Levi, director of marketing at Gliffy. “We wanted to be the number-one app downloaded in our space, and I think we are.”
Come On In, Competition
What makes Gliffy’s story especially interesting is that Microsoft invited the company to participate – even though Gliffy competes with Microsoft’s own Visio software.
Chris Kohlhardt founded Gliffy in 2006 to provide an easy way to embed diagrams within wikis, and today users can create org charts, Venn diagrams, flowcharts, floorplans and other diagrams via its Web service, and embed them within Word 2013, Google Docs or Atlassian Confluence. Gliffy’s free service allows up to 5 diagrams, with a $4.95 monthly/$49.50 annual tier allowing users to create up to 200 diagrams; a $9.95 monthly/$99.50 pro tier is also available.
Kohlhardt said he originally approached services like Jotspot and Socialtext about providing an add-on, but the most receptive partner was collaboration software maker Atlassian, where Gliffy has resided for several years and that provides the bulk of its revenue.
Although the company was always looking out for other platforms, Microsoft’s offer came as a welcome surprise. “We didn’t even know that there was an opportunity,” Levi added.
Microsoft invited a wide range of apps makers, from online dictionary developers like Merriam-Webster, to Hertz: developers with broad appeal, as well as those involved with highly specific functions. “They wanted to have a strong showing, so they reached out to a number of folks,” Kohlhardt explained.
“Unquestionably, the Microsoft Office opportunity is potentially an enormous one,” Levi said. ‘We were thinking, is there any other software package that is larger, worldwide? No way. The fact that they’ve opened it up to other software developers – this interview started with Chris saying that we’re looking to take on Vizio – is a really interesting expression of Microsoft’s openness.”
Microsoft “launched” the app store in mid-November. “All app stores are interesting to me at all times, but especially in their infancy,” Levi said. “Hardly anyone was there yet, and we were just working out the kinks… We all read about app stores measured in the millions of downloads, with sophisticated marketing applications, and here we are – this is the largest software company in the world, and we’re literally measuring [downloads] in the dozens.”
In early December, Microsoft began showing off the new Office software – and offering contracts – to subscribers of Microsoft’s early licensing programs, such as TechNet. So the Gliffy team faced an odd problem: should a small developer team spend money to promote itself within an app store for a product that was barely public? “Everyone was in something of the same boat, which is that they’re trying to build momentum, because they know that it’s easier to get momentum now than it would be in six months, or when it hits,” Levi said.
From a product perspective, Gliffy wanted to get out there early and get some feedback, so the company did a quick prototype internally and then worked with Microsoft to develop a Minimum Vable Product (MVP) that the company felt added enough value for people to see what Gliffy was all about and how well it would work, said Han Lee, Gliffy’s principal software engineer. Users could create a Gliffy diagram, insert it into their Word document, and then, if they updated the diagram, the Word document would be updated as well.
An Icon Is Worth A Thousand Downloads
From there, Gliffy turned to marketing. Microsoft handed each developer a blank page to describe its app; Levi said its strategy was to look at competitors who had more downloads, and try to figure out what they were doing right.
“On the enticing people to download front – and I think this is true with all apps stores – everything starts with the name and the tiny little graphic,” Levi said. “Ten years ago it was all about how much you could jam into a search result. Now, it’s all about how much you can jam into a little 50 x 50 graphic.”
When Gliffy launched, it added its standard Gliffy logo from the Atlassian system. “But we kind of realized, maybe we shouldn’t go for the brand thing – we’re not Merriam-Webster; we’re not Hertz,” Levi said.
Originally, the Gliffy logo said “Gliffy,” but the revised logo used a tiny model of a flow chart. “And you know what? We got a lot more downloads,” Levi said.
Gliffy reached out via blog, newsletter and its existing client list. To date, the number of ratings that Gliffy has accumulated has been small, but that hasn’t been all bad. “I think Microsoft is really focused on more than downloads, and other app stores have been really focused on downloads,” Han said, noting that Microsoft’s algorithm that promotes apps takes a variety of factors into account. “And it makes the game really more interesting for an app developer. I think it’s good because it allows incumbents more visibility than you would just on pure downloads.”
The fact that Microsoft turned off the ability to view the number of downloads for each app disappointed Levi, as it now prevents Gliffy from measuring its progress against the competition. “But it’s business,” he said. “I understand.”
In total, the Office Store currently has more than 200 apps, Microsoft said. “As it’s just getting under way, with the Office 365 consumer service launching [Tuesday], we don’t have numbers of downloads yet,” a Microsoft spokesman said in an email.
But Gliffy is hoping for a surge of new customers and downloads as Microsoft opens the Office Store. “I’m really excited to see what will happen when the marketing machine turns on,” Levi said. “I want to know the power of riding the wave.”
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