Trade Trade Secrets
by Danielle Fong
Your revolution will not be stolen.
Great ideas can’t change the world by themselves. They need people.
There are two kinds of revolutionary ideas. The explosive, and the subversive.
The explosive ideas seem to spread like wildfire. What people miss is that wildfires need kindling. One might spark the spark that lights the fire, but the ideas are in nascent forms in other minds as well — the very minds that would popularize and manifest that idea were they just slightly further ahead. One person — a Rosa Parks of a revolutionary movement, might come to symbolize it. But this revolution was never theirs alone. Rosa Parks was a heroine of disobedience, but the movement would have been sparked by any of those who grew to so fervently support it. One can’t steal such a revolution. Instead, one simply becomes a part of it.
Subversive ideas are a different beast, and are perhaps more truly revolutionary. They are not of their time — they push too hard against the zeitgeist. It is these ideas that are truly original; they can offer tremendous, untapped advantages to those who can realize their products, but in their development they require great effort, intellectual rigor, and dedication.
Perhaps the most challenging aspect of this work is in changing minds. The idea contradicts the conventional wisdom; hence, in addition to the real work, you are asked to produce a sweeping theory for why the right of the world could have been so blind or so wrongheaded. It is challenging enough to get people you employ to consider your ideas. It is even more difficult to have your ideas stolen.
If only it were so easy to change the world.
“Don’t worry about people stealing an idea. If it’s original, you will have to ram it down their throats.” – Howard Aiken (primary engineer of the Harvard Mark I)
Subversive revolutionary ideas cannot simply be stolen. Adopted, with difficulty and without credit, perhaps, like an adopted child kept from their biological parents. But not stolen. Such ideas, before development, are too new, too fragile, and too ill-defined. These ideas only become real as the hard work and dedication required to develop them is put forward.
More than three years ago, I had the central ideas for what became LightSail Energy. Over that period of time, I and my extraordinarily talented colleagues have invested, collectively, the greatest efforts of our careers into developing the product and the understanding necessary to make it, a process that involved hundreds of experiments, thousands of decisions, and tens of thousands of tasks. We have almost two years ahead of us before our first product even ships.
One can not simply steal the kind of knowledge and expertise so developed. The momentum developed by one technical group cannot be simply transplanted into a competitor, it transcends documentation. No — it resides in our greatest assets: our people, the minds we’ve trained, the conventional wisdom we’ve transformed, the reputation that, through our trials, we have deeply entrenched.
While startups are growing, while their greatest advances and products are in their future, they need not worry about a competitor stealing their work or ideas. Startups are in a race against time, not others.
Theft
This whole picture changes once a product is released, once made whole.
A novel may be simply transcribed, code copied. An engine, reverse engineered. Once there’s proof that something works, it’s easy for some to imagine that they could simply copy it.
But it takes much more than an opportunistic interest to bring most things to market. Even as Facebook began their long ascent, they feared that Google, or someone else who knew what they were doing, would just make their product. “And look how long it took them!” Mark Zuckerberg exclaims.
Google couldn’t simply steal Facebook, even though they knew how it worked, even though they had access to the clientside code. There was a barrier — the users and data of their growing population. And if one is going to simply copy something, one might as well try to improve upon it. The same urge to simply copy a work now becomes a stroke of inspiration.
The crucial factor? The common thief is lazy, and the lazy thief is thwarted. As you see, the thief is rarely a person of great motivation, excepting for personal vendettas. If other victims make better targets, one is safe. If all victims defend themselves more vigorously than the notion of honest work in the lazy thief’s mind, an honest society becomes an inevitability.
Theft != Transcription != Transformation != Inspiration
We must distinguish these concepts. There are simple semantic distinctions that our law and policy makers continuously evade. But they are incredibly important.
- Theft implies that the rightful person, an owner is denied access to something of value.
- Transcription is simply the copying of something, leaving the original intact.
- Transformation is the manipulation of a work into something of a different essential quality, message, or utility.
- Inspiration is a transformation less direct, acted upon through the medium of our imagination.
The great danger of laws that ignore these is not that they will prevent theft, but that they will so heavyhandedly prevent transformation and inspiration: the engines of our entire civilization.
Copyright has its merits, but most importantly, compared to patents, it induces limited collateral damage. Authors are protected, by property laws and window locks, from the most egregious of violations, theft, and by copyright, from commercial and transcriptions of their works, which might, it could be said, constitute theft of the market for their authorship.
Where copyright is dangerous is where it spreads. It spreads to non-commercial sharing of fragments, in music, criticism, and art, to the use and transformation of fragments. It spreads to the prevention of the dissemination of works to those who cannot pay, wouldn’t pay, could never pay. It prevents even the growth of the stature of the artist: it dramatically tips the balance of power of such industries away from the artist to those with the organizational resources to enforce their copyright monopoly on others: in music, the record labels, in movies, Hollywood, in science, Reed-Elsevier, Springer-Verlag. Their corporate lobbies will declare that they are protecting the artist, but in reality, the artist is dehumanized. The artist plays only a small role: second fiddle to the giant, thrumming machines of distribution, promotion, copyright enforcement, and market analysis in the publication industry’s leviathan mass.
What does this do?
Musicians, actors, filmmakers, and authors are enthralled to the callous calculations of multinational corporations, by structure insensitive to the local, cultural sensibilities that artists wish to convey. Those artists outside of a mature mass market industry where the promotion machine, defended by copyright, can create hits by bulldozing over works of artistic merit, are steadily seduced by those monied coffers: sell-out or be squeezed out. Indie artists are remarkable for their resilience and their art, but also for their poverty.
Remixes are prevented. The sampling of other’s work is believed to be theft. Internet services engaged in the promotion of new works are embargoed by those entities enforcing copyright. The remixing of footage of ten thousand films, which, as YouTube amply demonstrates, are deemed not inspiration nor transformation but the acts of criminals. And scientists, like me, outside of academia, outside of institutions which can mindlessly purchase the scientific journals of highest repute, are systematically shut out of the products of academic scientists, the works of public investment, which should rightly be the domain of everyone. Scientists are seduced by the well defended and financially supported reputations of journals in much the same way as artists are seduced by the distribution and glamor of the labels and studios, as models are seduced into posing and surrendering their image, for their glamor, their paltry salary, their many admiring eyes, their fame.
A better system, one could imagine, would draw the distinction between the theft of property, the theft of market share or opportunity, and the transcription or transformation implied by these other examples. A remix scarcely steals the market of the original work unless unreferenced. An immigrant entrepreneur scarcely steals the jobs of the natives unless they hire only immigrants as well — and even then this is unclear.
The heavyhanded application of copyright law is tantamount to the mislabeling of transcription or transformation as theft. If we are to grow as a knowledge economy, we must not commit such a grave error.
But all of these problems pale in comparison to the collateral damage done by the patent system.1
Illegitimizing Inspiration and Independent Invention
It is a peculiar feature about a patented invention that it need not actually work.2
It need not actually satisfy any needs.
It need not be, on its own, economically viable.
It need not ever have been intended to be made real, nor spread out into the world.3
It is an even more peculiar feature of patents that they do not grant you any rights, that is, other than that of taking away rights.
Rights to use of equipment that you own.
Rights to a methodology of medical practice.
Rights to manufacture or sale or application of an invention.
But most importantly, rights to inventions that you neither described nor anticipated, but that some aspect of your patent, another invention happens to incorporate.
Even if your patent discusses only the barest of sketches, and all of the hard work, and the vast majority of the good ideas necessary, were the result of other minds, whether independently, or by inspiration arising from the original work.
The patent system, then, makes a terrible sacrifice. Our physical property laws protect our stuff. Copyright, to a great extent, protects our creative, transcribable works. But patent law, in shoring up the defenses against these other violations, ‘protects’ us against, and illegitimizes both inspiration and independent invention.
But the patent system continues to grow. Business model patents. Medical patents. Use patents. Design patents. Continuations, and continuations in part. Nations even measure their inventive efforts by their cumulative accretion of patent applications. The scope of this heavyhanded mechanism continues unrelentingly, and unrepentant, chanting their mantra “We are protecting our ideas. Ideas have value.”
Ideas do have value. Great value. But the value of inspiration, of innovation, of allowing someone to make an improvement on an unfinished, or incompletely adapted idea, and bring it out into the world, is far greater.
If the ideas for stories could be patented, modern artists as great as J.R.R. Tolkien, George Lucas, and Steven Spielberg would have been sued as derivative. The hero’s journey deeply underlies many of their works, in many forms. And who would have patented the love song?
SOPA – The Thermonuclear Option
The absolute misapprehension of these semantic differences, and the total disregard for collateral damage, in the past months reached a fever pitch with the introduction of the SOPA or Stop Online Piracy Act. It seemed as if everything that could be wrong with it, was.
True, as its proponents claim, it would give the corporate copyright and distribution monopolists one more tool to prevent sharing from degrading their dying business model.
But in a SOPA world, if one person shares one element and one corporation makes one complaint, then in one moment with zero due process and zero transparency, a website can be blocked, and the possibility for any transcription, transformation, or inspiration destroyed.
But not just for the offending material. For everything.
Share, once, the wrong content to Wikipedia, and the entire project, the greatest encyclopedia of all time, one of the greatest efforts of all of civilization, is threatened with extinction.
SOPA has been prevented — so far. But what halted process was that the ‘technical’ aspects of the internet confused our lawmakers. It is deeply disturbing that it was not the semantic distinctions between theft and inspiration, or the threat of inordinate collateral damage, that halted the efforts of SOPAs proponents. It makes one fear their judgments in other matters equally.
While it is tempting to make an analogy to our current middle eastern conflict, it would not, in truth, reflect our military operations adequately. The military aspired to surgical precision. Predator drones. Counter-insurgency tactics.
SOPA represents a different stance. To threaten wikipedia with destruction is to threaten to vaporize the nations thought to harbor Osama bin Laden. SOPA is absolutely the thermonuclear option. It, and the efforts behind it, must be stopped.
What this Means for Startups
Do not be threatened by others copying your idea. Do not even be threatened by others copying an unfinished product. They cannot copy you, nor the imagined futures in your head, nor the organization that you’ve built, nor the reputation you’ve gained.
Your job is to create something wonderful, get it out in the world, and make it so convenient and clear that you should be the one to buy from, that you should be the one to trust, that hardly anyone would attempt to compete with you. iTunes costs money, but is so superior an experience to Kazaa that hardly anyone would choose the latter.
Once you’ve released your product, your goal is to stay ahead of it. To improve it, refine it, and when the time comes, to supersede it — to have the success of your past project propel you into the next.
On rare occasions, a work or invention may operate, its works hidden, for the relevant time period of the interest of its creator. A high tech company might build their product in China, but integrate a single element, hard to make, hard to understand, at headquarters on american shores. A piece of software might require a special key; a chemical process an essential catalyst.
A business might hold a monopoly over these trade secrets for as long as they can, perhaps to wring continued business benefits out of it. This may provide some advantage.
But it will not last. At best, it will buy you time. And at worst, keeping secrets will hamper your own work; your story, your promotion, and all the internal communication of the company. Communication is hard enough when people are open and honest. Operating on need-to-know bases is torture — you don’t know what you need to know. Worst of all, it will keep you in the past — a cruel death to the innovative spirit, and a poor trade for a temporary advantage over a determined competitor.
Trade Trade Secrets
This risks of people discovering the secrets of your work are, frankly, almost always overstated, and the advantages of sharing, truly underrated.
We live in a global world. Interested, helpful parties can emerge from any of its corners. The more that you share, and the clearer that you make it, the further your reach. Helpful parties from any corner can bring gifts, information, criticism, or their own efforts. So much of what we now are at LightSail emerged from the people who over time approached us, fascinated by our mission.
We have secrets, of course. But it is impossible to track them all without hampering every conversation. So we will stay open. Not wide open — not exhibitionist — we can’t spend all of our time showing the world who we are and what we do, but open. We will let the conversation flow. And just as often as we share what we’re doing, people share amazing ideas of their own.
So don’t just keep trade secrets. Trade them.4
Footnotes
1 – Notably, the one area in which patents are decently functional is the one where they are most similar to copyright: pharmaceutical patents. It is unambiguous whether a drug is chemically identical to another, just as is it unambiguous whether it is, despite a different printing process, the same book. Pharmaceutical patents are the exception that prove the rule.
2 – Though in principle, patented inventions are supposed to work, it is beyond the ability of the patent office to determine this. As a result, many incomplete, aspirational inventions are patented — lying in wait as traps for those who discover how to make related inventions practical and real.
3 – Historically, patent models were required from 1790 to 1880 to demonstrate how the invention was supposed to work. Only perpetual motion machines are required today to provide such working models, as proof of their operating principle.
4 – It has been suggested in the comment threads about whether or not the patent system makes possible the sharing of trade secrets. While I do agree that patents do make some form of sharing possible, I believe in the best of circumstances that this is incomplete, and there are significant negative externalities to the fact that it is a patent traded, and not another form of knowledge. Such trades can be as informal as describing the basic shape of the traded invention, in iteratively greater detail, or may comprise such formalities as documents shared under escrow, or contractual obligations to work together to get the inventions working usefully for one another. Importantly, one must be careful to document the invention at a level of detail that will prevent others from patenting the concept and preventing you from practicing it!
Insights by Danielle Fong 
What theme are you using? This blog is gorgeous!
Manifest, with some custom fonts and a header that is from a photo I took in Iceland.
“Knowing is not enough, we must apply. Willing is not enough, we must do.”-Bruce Lee
Good essay.
Err… Yes, actually, patents need to be able to work before bein allowed. And you seem to misunderstand what “reduced to practice” means: it means described in sufficient detail to explain how it works. Any average technician should be able to read it and go, “Aha, that’s how it works!” and implement it. If the explanation is insufficient, it is invalid, unless a working model is presented. (The USPTO requires working models to be submitted for perpetual motion machines, or example.)
Also, patents typically have a background section detailing the problem it solves. The problem only need be practical and the solution useful, and that’s usually enough of a “need” to be satisfied. The need may not be urgent, but not all problems are immediately apparent.
It also may not be economically viable, but it certainly makes it easier to get allowed if it is shown to be. A patent on a possible but unfeasible solution is usually nothing more than waste of filing fees, because an infringing product may never be feasibly produced.
A patent does certainly grant the applicant rights. It allows the applicant to sue infringers. (And pretty much little else.)
Patent (and IP) law does not “criminalize” inspiration, it criminalizes unlicensed use of that inspiration, just as physical property laws criminalize trespassing. Indeed, one goal of the patent system is publication of useful things in return for limited monopoly rights, such that others may be inspired by them and build on them. And your improvements can themselves be protected by IP as long as they are sufficiently different.
Ideas for stories or music cannot be patented simply because they are not practically useful (in the legal sense of the word — entertainment is not considered to have utility in and of itself.)
There’s that huge philosophical debate about physical and intangible property rights, but I’m just going to stick to the factual errors in this post.
“Err… Yes, actually, patents need to be able to work before being allowed.”
Not true. I fact I would suggest that more than half, much more, perhaps 90% of patented inventions, suffer from severe flaws in conception. Have read the patent literature on thermodynamic machines extensively, I can assure you that must cannot meet their claims.
For example, one particular company has patented a sequence of innovations, each stating that they are solving a problem from the last patent, but they introduce another one!
Many patents are simply absurd. Here’s one from Google Patents frontpage: a panda bear inhaler. http://www.google.com/patents/about?id=8D9_AAAAEBAJ
Here is another: a device for determining psychedelic state: http://www.google.com/patents/about?id=dxQdAAAAEBAJ
Stories and music are not semantically different from other patents for “amusement” excepting for their non-physical implementation.
And patents do criminalize inspiration. Witness the fact that most tech companies ask you never to look for relevant patents — if you are caught having looked at a patent you infringe on, they are liable for ‘triple’ damages.
Better to try to do everything oneself, their lawyers say.
Our lawyers insist on this too.
I’ve read dozens, maybe hundreds, of patents, and not a single one of those I’ve read could not have worked. Some were broad, some were obvious and some were probably dangerous, but they all would have worked, in the sense that they would do what you expect them to do. But then the patents I’ve looked at lie in other realms, including software, signal processing, communications, networking and electronics. I guess those areas are easier to judge patents, since the steps are pretty logical and you can build a model of the invention and simulate it in your head.
On the other hand, I haven’t read any patents on thermodynamic machines, but I can imagine there may be many impossible machines there, as the processes and mathematics involved are non-obvious. I remember watching a BBC interview of British scientists about an experiment involving super-heated steam where they were getting out more energy than they were putting in, apparently violating the first law of thermodynamics. They were confident that they were messing up somewhere, but they simply could not pinpoint where. And these were world-class scientists. I can totally imagine someone a lot less skeptical rushing to get a patent on such a process.
However, when it comes to the PTO, examiners tend to focus more on novelty, non-obviousness and utility rather than other aspects. Patents are a set of technical instructions and legal claims, not scientific, peer-reviewed papers. They primarily serve as instructions to others, so they usually don’t have to work as advertised (unless they advertise something absurd, like perpetual motion machines or other violations of the laws of physics). If the patent says their method produces N% improvement, examiners mostly will not question it unless N is obviously ridiculous. They are overworked, and really don’t have the time to verify anything other than the claims (the legal ones at the end of the patent application, not the marketing ones).
So, yes, some crazy patents do get through, and this is more of a flaw in the system than a fundamental problem. But really, from the PoV of the patent system, impossible claims are simply a waste of filing fees, as I mentioned. Unless the claims are unusually broad, I don’t see how they would impede progress, because if their inventions don’t work as advertised, anybody who infringes on their patent would have a non-working product. I’d say that is a bigger problem for an infringer than patent infringement.
I don’t see how either of the patents you linked is absurd. I can immediately see how the panda bear inhaler could be useful for making a nervous child comfortable with using one. And it’s a *design patent*, which is closer to copyright – it doesn’t even *have* to be useful! I have no idea how this will reduce progress — except for anyone else who wants to make an almost exact-looking panda bear-shaped inhaler. Working around that one is as simple as using any other cute animal. Literally. The second one is a diagnostic process which seems like a useful tool for testing psych/narcotic effects, but then I’m not a psychologist/psychiatrist. The only gray area is that it is not tied to a physical device in any way, but that does not reduce its utility the least bit.
Stories and music are *completely* different from patents because patents are a set of instructions for solving practical, real-world problems – even if the problem happens to be one of amusing yourself. Creative works are valuable in and of themselves. Patents are useless without a problem to solve.
The fact that many tech companies prevent employees from looking at patents is not because patents criminalize “inspiration”, it’s because patents criminalize “inspiration without paying where credit is due”, and companies would rather not pay out if they can get away with it. The treble damages for willful infringement certainly make this an easier choice. But if you read a patent and it helps you solve a problem, would you disagree that it has provided value for you, and hence maybe some compensation is in order? The real problem is with the economics of things: there are no limits to what royalties the patent owner will charge. As licensing is a private matter between two business entities, there are no laws restricting licensing fees, and there is little incentive for the patent owner to charge reasonable fees. This is an unacceptably large risk for companies, and they find it cheaper and safer to re-invent things rather than find an existing invention that solves their problem and license it. In my opinion, rather than patent law, it’s the licensing issues that need to be addressed.
The problem with patents that won’t work is that they can still grant rights to impede the efforts of inventions that *do* work. This has happened before and, mark my words, will happen again. You can patent only in broad strokes how to approach a problem, sit tight, and then sue. Let’s take the example of James Lemelson from wikipedia.
Eventually, Lemelson’s estate was defeated — but only once the wrong organization was cornered, and it had already extracted more than a billion dollars from companies that brought actual innovations to market, independent of Lemelson’s input.
I don’t understand how you can believe that a “story for making a nervous child comfortable” is categorically different in use from an inhaler for the same. So it is not the use that you are concerned with, but the physicality.
Doesn’t the example of companies literally stopping their companies from reading other patents clearly show that the threat of collateral damage wipes out the possibility of the information published in patents actually inspiring anyone?
> The problem with patents that won’t work is that they can still grant rights to impede the efforts of inventions that *do* work. This has happened before and, mark my words, will happen again.
Of course, there are overly broad patents, and they can be a problem, but in my experience (again, restricted to certain technical fields), they are rare. Unless you pioneer a whole new area of technology or you luck out with an overly incompetent patent examiner, it is difficult to get such broad claims. I’d say it used to be easier before early mid-2000 to get broad claims through, but the past few years (coinciding with the rise of Google, interestingly) examiners regularly find enough relevant prior art that greatly narrows claims.
The case of Jerome Lemelson is an interesting one, and it created many polarized views. Depending on which account you believe, he was a prolific lone inventor small-guy taking on established industry big-boys, or a prolific patent troll leeching off actual innovators. So obviously he was hailed by independent inventors and reviled by the companies who infringed. The reality, as always, is more complex. The fact about his “submarine” patents is that, when he started off at least, he was too poor to file multiple patents on his multiple inventions. So he would file one big spec detailing tons of things, and then as he received royalties for his initial licensing, he could afford to file continuations for the separate inventions it contained. That does not excuse the delays of his later patents, but an independent analysis of file histories of those those patents purports that the vast majority of the delays were due to the PTO itself, not intentionally caused. In fact one of the longest delays was because the PTO caused an application to be split into 20 separate applications, as it contained at least as many separate inventions!
Lemelson’s estate was “defeated” on the matter of only 17 of his almost-600 patents, and note that they were found to be unenforceable because of unreasonable delay in filing them (they could not prove intentional delay). Many infringing companies certainly were aware of his patents because he had aggressively tried to shop his inventions to anybody who would listen (and, according to him, hitting an NIH wall). Apparently some of the defendants’ defense was “it’s from so long ago that we thought it was in the public domain”. There is a lot of criticism about him, but keep in mind it’s mostly from people he antagonized, directly or indirectly. Having read a couple of his earlier patents (including a fax machine from 1958!), I could not find evidence of the accusations that he invented abstract and vague stuff. I am, however, completely unaware of the context of the state of the art at the time, so I cannot comment on the novelty or non-obviousness.
> I don’t understand how you can believe that a “story for making a nervous child comfortable” is categorically different in use from an inhaler for the same. So it is not the use that you are concerned with, but the physicality.
I’ve never had to use an inhaler, but here’s the scenario that played in my mind: Imagine an asthmatic child, nervous at having to use an inhaler for the first time. Wouldn’t the child be more comfortable with one that looked like a friendly toy? How would a story help here? Sure, you could make up a fairytale about, umm, a princess who had to breathe through a tube… but the panda-bear inhaler solves the problem in a much more direct way.
Stories and patents are categorically different because of “utility”. I don’t see how you cannot find stories and inventions to be categorically different. Do you see your work as technical work aimed at solving a problem constrained by practical limitations and the laws of physics, or creative works for others’ intellectual stimulation unconstrained by anything but your imagination? Do you see yourself as an artist, or an engineer?
> Doesn’t the example of companies literally stopping their companies from reading other patents clearly show that the threat of collateral damage wipes out the possibility of the information published in patents actually inspiring anyone?
Two things:
1) No, that just shows me that companies are just unwilling to pay for the use of others’ IP and would rather re-invent things. As I said, the economics of licensing makes this the more attractive option, but that does not mean patents are not used for inspiration, because…
2) Depending on the industry you work in, people read patents as much as they read academic papers, or even more. Engineers I know of working in the VLSI/digital electronics, communications, networking and mechanical fields regularly read patents for help.
> Lemelson’s estate was “defeated” on the matter of only 17 of his almost-600 patents
You clearly know more about this case than I, but at least we agree that ‘submarine’ patents are an abuse of the system. I just think that the patent system overvalues the idea without the necessary work to execute on that idea. I could have filed my application four years ago, waited, and sued the first person who would make it work — regardless of whether I inspired them, or if they contributed something — an idea perhaps — necessary for successful execution, or if they were working independently. I think that’s at the core of the Lemelson controversy — and others. It’s not clear it helps society.
As far as comfort being fundamentally a different use for physical or non-physical objects, I think you’re stretching yourself too thin here, but we’re both getting distracted from the point. There’s no firm semantic line defining what is patentable and what isn’t. That is being redefined and redefined in the courts over time, stretching from machines to visual design to computer algorithms, and medical methods.
On the last example, I agree I have overstated my case; I meant to say, the collateral damage done to *independent* invention of patented ideas scares companies away from their use in inspiration. The ideal case, where you read a patent, are inspired, then buy a license, is how it’s supposed to work.
Apologies for replying so late… Here’s why I think patents are a good idea, especially for people like me:
1) I too want to change the world, which is why I work in R&D. I’m bursting with ideas that I want to get out there. But I consider myself an inventor rather than an “innovator”. I think I’m very good at producing technology, but I’d be pretty sucky at everything else involved in bringing something to market. I think my work is not necessarily the most valuable, but valuable enough that I should be able to capitalize on it.
2) Even if I did want to be an innovator, I have ideas and inventions in many, many, many diverse areas, from wireless communications to robotics to multimedia to mobile devices. If I wished to innovate, I’d have to choose one idea in one area and focus on that, and spend many years of other work that I probably suck at in getting it to market. I feel that restricts my true potential, as my time and effort would be better allocated in doing something I’m good at.
3) Many people, including me, have ideas relating to areas where there are giant incumbent players with strong network effects protecting them (e.g. cable companies, or standards-based technologies). What are the options for getting these inventions out there? Roll your own cable network or wireless standard?
4) And now an anecdote that strongly influences my perspective: I once worked for a small company that foresaw that a popular consumer electronics product (call it X) would soon evolve into a new type of product (call it Y). They developed an early prototype of Y and the first ever software system for it. Being a very small startup, making Ys themselves would be very difficult because it requires an extremely capital-intensive manufacturing process, and they would be competing with giant established international companies that made Xs (and would eventually be producing Ys). Instead, they shopped their prototype and software to all these big companies. They got turned away by each and every one of them, made no money, and eventually had to lay off almost everyone. (I joined much, much later.) Sure enough, a few years later, Ys come about and the X makers all started making Ys… all featuring the same things that this small company had initially developed. The company was understandably upset, and would have been SOL… had they not filed tons of patents on their technology. They went back knocking on the same companies’ doors again, but instead of a product, they brought their patents. BAM! They secured some of the largest patent licensing deals at the time. Ironically what got them paid was not the product but the patents.
This is just one case that I was personally (though indirectly) connected to. I know many other such stories, telling me that people will just rip off your work for free if they can get away with it, and you better have a big stick handy to protect your work.
Patents, and IP in general, can let me do what I do best while still maintaining an option to enforce a fair deal if somebody else finds value in my work and makes money off it. I don’t have to worry about bringing my ideas to market or competing with giant players and network effects; who ever finds it useful can use it as they see fit. As long as it’s licensed fairly, of course.
I have no problems with just giving my work away either; I have open sourced some of my projects and freely published some research. But if I publish a good idea and somebody makes lots of money directly from it, am I supposed to be happy?
Essentially, I agree with your conclusion about “trading trade secrets.” My point is, I believe patents are needed to ensure that you get a fair trade.
I will think on this. I think patents have a long way to improve but I am not against some kind of protection for inventors in principle.
> I just think that the patent system overvalues the idea without the necessary work to execute on that idea….
Patents are actually part of the “execution” of ideas – they cover the technical execution. In theory, patents are supposed to be detailed enough that doing the necessary work is as easy as following instructions. This, unfortunately is rarely true and IMO is the most widespread shortcoming of the system, more so than broad, non-novel or obvious patents. It is also a fixable flaw, though.
It is true that the other aspects of execution, such as design, management and marketing, are much crucial to get a product to market, but a screw-up in any of those can sink an otherwise-good idea. (Think Friendster.) My take is that the patent system tends to reward technical innovation regardless of the vagaries of business, probably because the technical innovation is often the hardest part and the biggest risk.
> It’s not clear it helps society.
That I will agree with. What I don’t agree with is the perception out there flat out declaring that it *hurts* society. It’s not nearly so easy to determine. Searching ssrn.org, you will find tons of literature studying the effects of patents, and there is research supporting both views. It is very difficult to measure things like innovation and benefits to society. So you get researchers using economics methods to get results supporting either view, which prompt other papers pointing out flaws in those papers and supporting the other view. From what I’ve read, I think it’s a bit of both, but there’s no overwhelming evidence either way.
> As far as comfort being fundamentally a different use for physical or non-physical objects, I think you’re stretching yourself too thin here, but we’re both getting distracted from the point.
The point is muddled, but I was trying to say that an invention is fundamentally different from creative expression, even though both are arrived through creative mental processes. The constraints, goals and methods of each are completely different, which is why they are covered by two different forms of IP.
> There’s no firm semantic line defining what is patentable and what isn’t. That is being redefined and redefined in the courts over time, stretching from machines to visual design to computer algorithms, and medical methods.
According to Congress, the semantic line is very simple: patentable matter includes “anything under the sun made by man”. Really! It’s no wonder there is confusion. But it’s intentionally vague because it tries to include all human endeavor, without accidentally excluding unanticipated new fields, that could benefit from patent protection. So it is not so much the line being redefined as it is that new, un-anticipated technologies keep popping up that the line (and all that case law) does not clearly address. It certainly is a hard problem.
> On the last example, I agree I have overstated my case; I meant to say, the collateral damage done to *independent* invention of patented ideas scares companies away from their use in inspiration. The ideal case, where you read a patent, are inspired, then buy a license, is how it’s supposed to work.
Patents do penalize independent invention, but statistically, it is rather infrequent. Given the millions of patents and patent applications and billions of ideas and papers and projects, the number of patents in lawsuits and simultaneous re-inventions is miniscule. There certainly are some fields where it is more likely than others, though I don’t know how we could address that problem.
Undoubtedly, patents, especially bad ones, can impede some innovation. OTH, there is a real need to protect inventors and the money that companies invest in R&D. I think the current patent system is flawed but its fundamentals are sound. If we can iron out the flaws, it can provide a good balance between protecting innovation and preserving competition.
I think at this point we’ve debated the two sides of the issue pretty thoroughly. Though we agree on the facts we draw very different conclusions. I am coming to this from the angle of an innovator who wants only to change her world and do her work.
It would be of interest to know where your perspective is coming from?
Whoops… replied to the wrong post above:
https://daniellefong.com/2012/01/23/trade-trade-secrets/#comment-1086
What a wonderful essay :) It’s as functional and equally philosophical.
Very well written. I have expressed a similar idea in a more limited domain here: http://crynwr.com/on-being-proprietary.html
As Lawrence Lessig notes, one of the interesting events in recent copyright history is the compulsory licensing of music to radio stations because the public wanted the greater availability of music that this allowed. Perhaps the right fix to patent issues is to come up with some sort of compulsory licensing scheme, so that patent holders can’t hold new inventions hostage. Anyone gets to use any new invention, they just have to pay the statutory rate. Making that rate fair would be a little tricky, but it would encourage a greater culture of enhancing existing inventions. It would also greatly reduce the economic friction of having to consult legal experts whenever wanting to license a new invention.
The point of patents is to bring more inventions to the public (“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”). Fundamentally, the flaw in this is the idea that we should let anyone have a monopoly on anything. Instead, we the public can guarantee value to inventors for a limited period of time. Competition routinely brings better products to market. Compulsory licensing also prevents inventors who overvalue their invention from holding back progress and availability of new technology by making licensing costs too high.
Finally, it is worth noting that the current terms of patent are ridiculously long in the software field. If software patents were good for two years, then it wouldn’t matter that only Apple could search multiple sources of data. So another approach is to reduce the terms of a lot of patents. If one generation is about 25 years, then there should be no patents that last for more time than that, and in fact we the public should demand it to be even shorter.
Very astute points, Matthew. Thank you for your commentary.
I think that the notion of compulsory licensing and field/specific terms are interesting, but difficult to administrate. Do you have any ideas for how you could define fields and their reasonable lifetimes appropriately? Or develop compulsory terms?
I have this notion that perhaps one could set aside some of the gross profits from any product, say, 20%, and that is the profit that one could reasonably lay claim to under compulsory licensing terms.
Injunctions seem far too heavy handed.
[…] Trade Trade Secrets – Danielle Fong blog […]
Hey danielle. Pharmaceutical patents are broken too. I’ve met with VCs who talk with glee about manipulating formulations to make “distinct compounds”, sometimes you can skid by by substituting one isotope for another… Pharma companies patenting racemic mixtures, then extending patents by selling stereospecific isomers – showing increased activity so the heel gets dropped on the racemic mixture via regulation. Although big pharma is really sick right now (empty pipelines) the margins that big pharma extracts? Profit margins for big pharma are in the 60% range, but generics pull ~11%.
We need some straight-up IP-free “direct-to-generic” pharmaceuticals, to prove it can be done. Someday.
[…] The crucial factor? The common thief is lazy, and the lazy thief is thwarted. As you see, the thief is rarely a person of great motivation, excepting for personal vendettas. If other victims make better targets, one is safe. If all victims defend themselves more vigorously than the notion of honest work in the lazy thief’s mind, an honest society becomes an inevitability. Link […]
Hi Danielle, Kipling agrees with you in his ‘The Mary Gloster.’
“They copied all they could follow, but they couldn’t copy my mind,
And I left ’em sweating and stealing a year and a half behind.”
https://picasaweb.google.com/lh/photo/rWogMDSQMt60eZbJNkW7a6kKXTSRJHnhdU6-IEAEUP0?feat=directlink
Programmers have long benefited from the tools and norms for sharing; us hardware builders have to find ways to keep an open shop and a more productive commons. As you mention, one thread of entrepreneur paranoia ties them to the 5-10 years it takes to do the really worthwhile things. You only get to do so many in a career. If another does it better first, then teaming up in some way will be the right choice. …unless the founding team’s power has been eroded under the funding cycles.
I’m not rated to sail into the patent maelstrom but will float this: Any group of technologists should regularly ask, “How many months ahead would we be now if the time and money dedicated to IP over the last year were instead deployed in the lab?” The usual range is binary – anything more than 1 month is too much, but zero is zero. IP is a budgeted expense and routine activity – like cleaning the shop floor and stocking the fridge. It’s good for raising certain kinds of money; great for spending all kinds.
Hi Danielle, interesting insights especially over the current patent situation. Lightsail just got a mention on http://www.theoildrum.com with the usual skeptical response.
Got me thinking about small scale domestic system for PV generation usage shifting where battery cycle life and cost kills the economics of going off grid.
Best wishes Tony
That’s a prominent and exciting early application, but we’re definitely targeting larger scale (though often off-grid) systems first.
Thanks for the note!
Danielle,
I found a reference to Light Sail while researching Organic Rankine Cycle power generation. Now I have spent half the morning reading your essays! Your words on SOPA and copywrite / patent law in general are bullet proof.
Wishing you the best of luck from Vermont,
Dylan
Thanks to your blog, i am experiencing a paradigm shift!
Danielle, Very nice thoughts. You don’t mention the patenting of ‘genes’ large multinationals, I won’t mention names for fear of being sued, feel they own their progeny and sue farmers for infringenment when their progeny flies into the world. The idea that a large firm could patent a gene the they discover, actually sometimes depriving the ‘owner’ of it’s use unless they pony up big dollars.
You are very inspriational and I’m glad you are working with your team to help the world.
(Delete if double post)
I know the post is almost a year old, but it’s absolutely brilliant. The US patent system is an unholy mess, and unless it’s overhauled in a major way countries like India and China are going to flat-out ignore it. Indian pharma companies recently won at the WTO with respect to generic drugs, which is why people in India can buy them far cheaper than folks in the US. Interestingly, the same companies sell em for even less in Africa, but we’re not complaining – it’s a service.
Granted, there may be a few places where patent law is not totally broken – VLSI circuit design, perhaps. It’s still a mess. What I’d like to tell kinkfisher in the comments above is that if I invent a design in November and follow through with a product, I couldn’t care less if he’d invented the same thing in October, and nor should I, if the purpose of patent law is to a) prevent copying and/or b) spur innovation. If I then discovered that he thought of it first, I’d be honor bound to give him credit – if someone asks me who thought of it first. Oh, and speaking of panda bear inhalers – one doesn’t have to create an identical inhaler to get sued, just ‘look and feel’ would be enough – look at what Apple did with ‘flat, black screen and rounded edges’.
As a grad student, everything I do is funded by the public. Scientific institutions pay a lot to get access to journals whose contents are both authored and refereed by scientists for free, but cost a bomb to view. A fix does exist, however – physicists have something called the arxiv (arxiv.org) which you must’ve heard about, where they put their papers before sending them to a journal. You can still get the benefit of the referees’ time – a journal’s table of contents and the abstracts are publicly viewable on its websites, and an essentially identical copy would be up on arxiv.org with the same title. The arxiv is hosted by Cornell with a whole raft of universities offering financial support. If enough people in your line of work request inclusion, perhaps y’all could be hosted there too.
Dear Danielle,
Hello, just want to share more ways of making your goals achievable. I really am just an ordinary guy with a trade school degree and an active imagination with faith in god. I pray often and certain things come to me it is really enlightening sometimes when you find new ways of rediscovering old ideas. I always wanted to reinvent the waterwheel and my first try was the pendulum siphon pump not ever taking a physics class I had no idea what I tried to invent was suppose to be impossible. I got the idea from the pendulum theory out of my machinery handbook. So when I added the fluid weight transfer and the rolling weight I thought I was on to something but all I found out was you can’t patented it and everyone thinks its impossible. So I moved on to the next invention of the onsite power generator that would utilize the stored Air energy from manufacturing for the next day hard start up. Yet again I could not convince people to make a high head turbine system that was based on the human heart were two cylinders with check valves in and out that would use actuated valves to time the firing of the cylinders and allow constant high head flow rate. I made a proto-type system out of two 275 gallon tanks with a 2 inch discharges I was able to empty one full tank in 1 minute which when I compared it to any other turbo pump it was really amazing so then this inspired me to make the porcupine pump and all it is a vessel with many check valves going in and one discharge and a pressurizing line to fire the vessel for a air compressor accessory pump. My kid’s like playing with it it’s a cool water cannon. After not getting anywhere with it I moved on to my next inventions of wave compression and roadway generators I finally got to talk to a professor on my thought and he did the math and one cubic meter of sea water would produce ten dollars and fifty cents a day of clean energy. And a twenty-foot road mat would produce thirty-eight dollars a day for my local town where I work by the average daily travel on the road. I thought wow that’s pretty good and not to mention all the added benefits of air capture and liquid piston technology had to offer the environment. Try it once get all your friends and do the Ben Franklin on Compressed Air, Electricity, and Gasoline, and list all the pros and cons. You will find out what is superior and has the most benefits and what is more versatile. Drive over a mat and collect the energy through liquid piston and air capture how can this not be attractive to small towns right through to large cities, and government owned roads to produce revenue and create jobs and build new infrastructure. The only down fall is the driver is paying for it so why not give them an energy credit for it. But that idea got shot down I really believe this one could save towns from bankruptcy and allow an economic boom. Not to mention the environmental benefit from the air capture right at the point of co2 emissions from the car to scrub it immediately. If you couple the idea with geo- thermal you could have heated roadways that would need less maintenance because of the constant temperature. I thought wow that’s really original and I could not find anything like it. I even proposed it to the state for public and private partnerships and got shot down along with Penn State. But Penn State let me propose my wave generation system to students for a project but I don’t think it’s going to happen either. I talked with the professor for the last year going over renewable energy inventions from dike generation systems, to solar spontaneous combustion boilers that use hay. I always try to harness wasted energy and give it a cogeneration ability to help the environment. My latest invention is the chain conveyor generator that can be used in many ways the proto-type I built was out of a piece of 8 inch pipe that is about ten feet long. What I did was mount sprockets to each end and build piston flights that attach to the chain creating an elongated water wheel. The idea can be used on bridges or canals to harness the potential energy of the area of stream it contacts. Or if used in an elevation scenario where you want to move material or water. The scenario I gave the professor was I have a lot of land and there is about 200 feet of elevation and I have a big underground source of water on the top with a pond on the bottom so if I sent a cubic meter of water down the mountain and dumped it into the pond how much energy would I produce if the elevation was 60 feet and the length was 2000 feet long to the bottom and it produced a lot of energy. But it would be expensive but simple to build. You could not do it with a pipe and turbine because there is not enough surface flow but if I dig a hole and plumb an actuated valve the system could run itself. Locally we have a coal Cogeneration plant that sits on the hill and uses trucks to haul the ash down the bottom of the mountain this would eliminate co2 emissions and produce clean energy. All I want to do is inspire people and give them hope in an age of great technological Advancements to achieve a less polluted planet and create an environmental clean energy explosion of infrastructure and permanent jobs to produce economic growth and empower the people with our diminishing capitalistic society. Please Danielle leave this post up to inspire people who look at it.
Yours Very Truly,
Jesse Williams
Danielle,
I read this post last year, and the first three sentences are among the best I ever read.
“Your revolution will not be stolen. Ideas don’t change the world by themselves. They need people”.
I found them amazing because they made something click. They encompassed why I was dissatisfied with an otherwise fantastic job, and it helped me rise through a layer of corporate stagnation.
If your science is as sound as your philosophy, and you happen to have any openings available, I would sincerely love to come and help your cause.
Either way, I hope your ideas succeed.
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