A LEADING American firm that patents inventions and invests in the inventions of others is basing its regional headquarters here.
The move by Intellectual Ventures (IV) will boost Singapore's aim to be the global hub for commercialising intellectual property (IP), a catch-all term meaning legal rights protecting how certain products are made and marketed.
In IV's case, it patents inventions and files patent applications in more than 30 technology areas, including nanotechnology, biomedical devices, software and consumer electronics.
The firm, which is helmed by former Microsoft chief technology officer Nathan Myhrvold, said yesterday that it chose Singapore because of its 'pro-business environment' and 'strong intellectual property protections'.
Dr Myhrvold said that when he and his colleagues founded the firm eight years ago, they wanted to focus time and resources on invention as a full-time activity - not as a sideline to other projects. He said this focus had brought success in the United States.
Dr Myhrvold, who completed a PhD in theoretical and mathematical physics by 23, said they were thrilled their invention efforts were generating growing interest among Asia's leading inventors.
'Expanding our invention efforts to Asia allows us to support even more inventors and to expand our initiative globally,' said Dr Myhrvold, who is also a prize-winning nature and wildlife photographer and master French chef.
Mr S. Iswaran, Senior Minister of State for Trade and Industry, who attended the launch of IV's Asian headquarters yesterday, spoke of the potential of IP.
Mr Iswaran said that while the IP generated in Singapore and beyond will benefit the economy, there are also opportunities to exploit it internationally.
'We believe that Singapore's strategic location at the confluence of IP creation and commercialisation...positions us well as a base for global companies to create, manage, and commercialise IP in the region and beyond,' he said.
IV is staffing the Singapore office at Gateway Building with 22 professionals, including business executives, technologists and IP law experts but that number will grow in the near future.
IV will also open offices in Tokyo, Bangalore, Beijing and Seoul.
= = =
From the magazine issue dated Nov 22, 2004
FACTORY OF THE FUTURE?
The offices of the highly secretive Seattle-area start-up, Intellectual Ventures, are filled with evidence of the multiple hobbies of its polymath founder, Nathan Myhrvold. The multimillionaire former chief technologist at Microsoft is a scientist, so there's a collection of antique microscopes in his office. He is a photographer, so striking pictures of nature adorn all the walls. He is an avid writer, so antique typewriters line the hallway. And since he is also a paleontologist, the full-scale head of a T. Rex lords it over the lobby. It's actually a replica of the model used in the second "Jurassic Park" film.
The dino's ferociously bared teeth hint at elements of Intellectual Ventures' bold business plan. Myhrvold and his partner, former Microsoft chief software architect Edward Jung, have created the quintessential company for the 21st century. It doesn't actually make anything: it outsources, offshores and offloads nearly every task performed by regular corporations. It has no factories, machine shops or marketing teams. Only patent attorneys populate the quiet hallways. The five-year-old firm's plan is to create or buy new ideas, accumulate patents--exclusive rights to use the inventions--and rent those ideas to companies that need them to do the gritty work of producing real products. Because today's businesses are constrained by their need to make money, Myhrvold says, "it is irresponsible for them to think wildly outside the box." He wants to fill that innovation gap--"We are thinking wilder, crazier thoughts than anyone else."
To generate patentable ideas, Intellectual Ventures hired a dozen top scientists as part-time consultants to participate in several all-day gabfests each month, which the company calls "invention sessions." Lawyers transcribe the discussions, which can range from biotech to nanotech to solid-state physics, and follow up on the most promising ideas with patent applications. One participant, Dr. Leroy Hood of the Institute for Systems Biology in Seattle, says: "We are thinking about how you can solve problems that have never been solved before." Since the company has been holding sessions for only a year, it has likely produced about a hundred ideas whose patent applications won't be processed--or start earning any money--for at least three years.
But spinning new ideas is only a small part of the plan. Sources familiar with Myhrvold's strategy say that he has raised $350 million from some of the largest companies in high tech: Microsoft, Intel, Sony, Nokia and Apple. Google and eBay also recently invested. With this large bankroll, the company is out buying existing patents in droves. (Myhrvold won't comment on these activities, but sources say he has already purchased about 1,000 patents.) The strategy is to set up a sort of patent marketplace. Patent owners get money upfront for the dusty ideas sitting on their shelves, the investors get the rights to use the ideas without being sued and Myhrvold gets to rent those same ideas to other companies that need them to continue creating products. Intellectual-property experts say his plan is audacious and unprecedented, customized for a new, rapidly dawning business environment.
In this new world, intellectual property is every company's most prized possession--and biggest vulnerability. It has al--ready become America's No. 1 product and export: last year in the United States, for example, movie sales in theaters and as DVDs and videos exceeded the overall sales of steel. Intellectual property is now an asset with independent value that can be bartered, sold or battled over. Large companies have always accused their rivals of capitalizing on their ideas, of course. But now companies with more patents than actual products and a few bloodthirsty lawyers on the payroll have no reason to strike partnerships; they are out to win lawsuits. And the biggest companies with the most products that conceivably trample the most patents are sitting ducks. Last year, for example, Microsoft was ordered to pay $520 million for violating the patent of one employee firm, Eolas, which claimed to own the way users could get videos or songs inside a Web browser (Microsoft is appealing).
This is where Intellectual Ventures steps in. It is buying patents from all corners of the high-tech world, including those that could pose legal threats to its powerful investors. An Intellectual Ventures e-mail sent to law and consulting firms last year, and obtained by NEWSWEEK, says the company is "interested in purchasing patents and applications in the areas of software, e-commerce, communications, semiconductors, consumer electronics and computer architecture--basically, just about anything that deals with bits." By buying all these patents, Intellectual Ventures ensures they cannot be used against its investors by gadflies like Eolas.
The dino's ferociously bared teeth hint at elements of Intellectual Ventures' bold business plan. Myhrvold and his partner, former Microsoft chief software architect Edward Jung, have created the quintessential company for the 21st century. It doesn't actually make anything: it outsources, offshores and offloads nearly every task performed by regular corporations. It has no factories, machine shops or marketing teams. Only patent attorneys populate the quiet hallways. The five-year-old firm's plan is to create or buy new ideas, accumulate patents--exclusive rights to use the inventions--and rent those ideas to companies that need them to do the gritty work of producing real products. Because today's businesses are constrained by their need to make money, Myhrvold says, "it is irresponsible for them to think wildly outside the box." He wants to fill that innovation gap--"We are thinking wilder, crazier thoughts than anyone else."
To generate patentable ideas, Intellectual Ventures hired a dozen top scientists as part-time consultants to participate in several all-day gabfests each month, which the company calls "invention sessions." Lawyers transcribe the discussions, which can range from biotech to nanotech to solid-state physics, and follow up on the most promising ideas with patent applications. One participant, Dr. Leroy Hood of the Institute for Systems Biology in Seattle, says: "We are thinking about how you can solve problems that have never been solved before." Since the company has been holding sessions for only a year, it has likely produced about a hundred ideas whose patent applications won't be processed--or start earning any money--for at least three years.
But spinning new ideas is only a small part of the plan. Sources familiar with Myhrvold's strategy say that he has raised $350 million from some of the largest companies in high tech: Microsoft, Intel, Sony, Nokia and Apple. Google and eBay also recently invested. With this large bankroll, the company is out buying existing patents in droves. (Myhrvold won't comment on these activities, but sources say he has already purchased about 1,000 patents.) The strategy is to set up a sort of patent marketplace. Patent owners get money upfront for the dusty ideas sitting on their shelves, the investors get the rights to use the ideas without being sued and Myhrvold gets to rent those same ideas to other companies that need them to continue creating products. Intellectual-property experts say his plan is audacious and unprecedented, customized for a new, rapidly dawning business environment.
In this new world, intellectual property is every company's most prized possession--and biggest vulnerability. It has al--ready become America's No. 1 product and export: last year in the United States, for example, movie sales in theaters and as DVDs and videos exceeded the overall sales of steel. Intellectual property is now an asset with independent value that can be bartered, sold or battled over. Large companies have always accused their rivals of capitalizing on their ideas, of course. But now companies with more patents than actual products and a few bloodthirsty lawyers on the payroll have no reason to strike partnerships; they are out to win lawsuits. And the biggest companies with the most products that conceivably trample the most patents are sitting ducks. Last year, for example, Microsoft was ordered to pay $520 million for violating the patent of one employee firm, Eolas, which claimed to own the way users could get videos or songs inside a Web browser (Microsoft is appealing).
This is where Intellectual Ventures steps in. It is buying patents from all corners of the high-tech world, including those that could pose legal threats to its powerful investors. An Intellectual Ventures e-mail sent to law and consulting firms last year, and obtained by NEWSWEEK, says the company is "interested in purchasing patents and applications in the areas of software, e-commerce, communications, semiconductors, consumer electronics and computer architecture--basically, just about anything that deals with bits." By buying all these patents, Intellectual Ventures ensures they cannot be used against its investors by gadflies like Eolas.
But Myhrvold also intends to make money for his backers, not just to protect them. This is where the critics start to get anxious. "We're concerned that these giant pools of patent rights are going to prevent entrepreneurs from entering markets, as opposed to being used to promote innovation," says one worried Silicon Valleyventure capitalist. But Intellectual Ventures could do many things, observers say. It could demand licensing fees from its investors' rivals, companies like Yahoo and Amazon. It could also corner the market in a new technology, like a speedier silicon processor, and charge microchip makers a tithe to use it. Or Myhrvold could change directions altogether and start building actual companies around the best ideas.
Myhrvold and Jung won't exactly say. But they charge that Silicon Valley companies have stolen other people's inventions for too long while slashing their own R&D budgets. Referring to Intellectual Ventures' portfolio of patents as his own, he says, "If giant corporations are making billions of dollars off my ideas, I want something for it, and I don't think there is anything wrong with that." He expects his business plan will draw controversy, but notes, "Everything new in life is opposed by somebody." He also cites as a model the electronics companies that pool their DVD patents. Manufacturers that want to make DVD players now have to pay these consortiums small fees for the rights. Yet even with this tech tax, the cost of players has dropped sharply during the DVD boom.
Where is all this headed? Myhrvold reflects on his early days at Microsoft when he was criticized for selling pure software, a collection of ethereal bits unattached to something tangible like computer hardware. Today, this "ethereal" industry is one of America's largest, and Myhrvold repeats almost as a mantra, "Intellectual property is the next software." In other words, he expects a whole new industry of firms like Intellectual Ventures that deal only in the currency of ideas. He is so sure of it, he has even adopted a new hobby: studying for the patent bar exam.
= = =
Failure Is an Option
What do you do when what you need to know hasn't been thought of yet?
Newsweek Web Exclusive
Jul 13, 2008 | Updated: 11:55 a.m. ET Jul 12, 2008
If there is a marketplace of ideas, Edward Jung and Nathan Myhrvold want to profit by it. The two Microsoft alumni formed Seattle-based Intellectual Ventures in 2000 to be the go-to place for creative thinking. Instead of developing new products, Intellectual Ventures has developed a portfolio of inventions, or "invention capital" as they call it, which the firm has patented and licenses to other companies. Jung, currently the chief technology officer, spoke last week from his office in Seattle with NEWSWEEK's Andrew Bast about what makes ideas valuable and why success often means putting up with failure. Excerpts:
NEWSWEEK: Can we start with the seemingly most obvious but probably most perplexing question: What is an idea?
Edward Jung: We think of an idea as an action that causes a reaction, and that reaction creates products of value. I'll give two examples. If you made a diagnostic device that could give you early treatment of cancer, there is some very definite value: extended lifetimes, economic value, products that you could put on the shelf, and so on. But then there are other ideas like pandemic control that would clearly create a lot of value for society and people in general, but it is a little hard to figure out how you would charge for it. That is one of the things that would differentiate pure ideas from extremely applied ideas. Once you have an idea like solving pandemics, though, sometimes someone will figure out how to create economics around that, even though nobody knows how to do it today.
What, then, is a good idea?At the heart of it, Intellectual Ventures is a capitalist company, so to us a good idea is nominated by some notion that it could be reduced to something practical. You could have an idea that is literally quite concrete, like how do you make your cell-phone battery life better. Very practical. But if you go back to the pandemic, that's also a good idea because it benefits society in general. So what we've done internally is divide goodness into many different categories, many time domains and many levels of certainty that we can actually create some economic value out of it. Some of our crazy future ideas are very risky, but because we do it at such a large scale, we can do a few of those as well as ones who are safer, more nearer term and more easily translated into economics. But good also depends on the area of technology you are in. So a good idea in computer science is measured differently than a good idea in life science.
Much of capitalism's genius is its incessant pressure to innovate. To that end, are good ideas losing out because they're not economically viable?
Let's say you're a public company. Your shareholders have a certain time horizon they have been trained to look at, and it is very difficult for your to invest outside of it. So if they are pressuring you for every quarter's results and you fail to meet those results, you're punished and naturally you're not going to be investing further down the chain. If part of your brand is to be very future-looking, however, then your shareholders will have much more patience. What is economic depends on where you've positioned yourself. We have a whole part of what we do that is positioned very far in the future. Because we work on intellectual property and not necessarily on product, by our nature we have investors who tend to be more patient. That allows us to operate in a domain that is further out in terms of its economic value. Other companies do this too. If you're big enough, you can invest a good amount in research.
A company like General Electric, for instance?Or Microsoft, who has a pure research group. It's actually one of the largest research groups in the industry, and that's because they have a lot of money. We can push even further out, because people's expectations aren't that we are going to produce the product, but we are going to produce the infrastructure to allow other people to create products. In that sense, we can expand the definition of what is economic to think about. I think that's valuable.
If you have to take so many leaps, then how do you gauge risk?
Ultimately, it's similar to taking that stack of papers and dropping it off the top of a staircase, right? There's a bit of "who knows?" and reality will eventually tell you. A lot of what we do is roadmaps. We can sit down and think about—and we've done this—with the rising costs of health care and the shift to chronic diseases and the change of demographics in civilized countries and the way socialized medicine is working, really what is going to happen to health care in the next 10 or 20 years? What needs to happen? What will be the economic pressures and therefore where are innovations necessary? We can think about that without the constraint of, "What is our business today?" In that context, ideas have a much purer value. For example, if an idea requires a complete change in the way socialized medicine works, well, OK, that's a pretty risky idea. It has to be a really fantastic idea to change something like that. That context, both what's happening today and the pure form of what needs to be solved allow us to try and assess that risk.
Wouldn't you say that human beings are most innovative when their backs are up against the wall?
This is a matter of opinion, but I think when people's backs are to the wall, that's not when great ideas come up. That's when great ideas get funded. Right now there's a lot of stock thinking about alternative energy, because we feel that our backs are coming up to the wall. That's not the best way to fund innovation, but it shows you that creating the incentive or capital will get more people to develop the ideas. I happen to think that when you find a great inventor, they invent all the time. You can't stop them, in fact. At one of our first invention sessions, the icemaker in the refrigerator broke. Inventors, among other things, seem to need caffeinated beverages, and immediately you had three or four top-notch inventors inventing new icemakers.
On the spot?
On the spot. They said, "The icemaker broke. Oh, hey, why do icemakers work this way? Well, here's a better way to make an icemaker. No, here's another way." And instantly, we had several new icemaker inventions. Now, we can create lots of new inventions and ultimately we can't pursue them all. So we have a process we call triage, and those didn't make it in triage because icemakers weren't as interesting as some of the other problems we were solving. But it goes to show that inventors will invent, if given the opportunity. You don't have to wait until your back is up against the wall.
What kind of education makes the most innovative people?
That's a hard one to answer. It's not the educational background as much as it's the personality that develops and much of that comes from the context in which they were raised and obviously some is genetics. It is interesting that we're operating globally now and you tend to see more flexible inventors—big idea inventors—coming out of the U.S. instead of a lot of other countries.
Why is that?Among the countries we operate in, by many metrics the U.S. actually has the worst education system. Why is it that we kind of have the worst education system but the best innovation track record? It's because, I believe, culturally we have a lot of people who have no fear of failure. The beauty, not of our education system, but of our culture, is that we will rebound from failure. Once I talked to a huge multinational company in Asia. When the CEO walks down the hall, everyone stands up and bows. I gave a talk about how many failures I had in starting new groups at Microsoft. At the end, I put a timeline down of my failures and I turned to the chairman of the company and all of his CEOs and said, "If I was at your company, when would you have fired me?" He pointed at the timeline and said, "Frankly, probably in your first year." I told him that if that were the case, I probably wouldn't have lasted long enough to create things of real value that I did at Microsoft, then, would I? Ultimately, most common among the great inventors we work with is that they have no fear of failure, no respect for the boundaries of their education, yet they are self-aware enough to take input from others.
Is technological innovation different from innovations in politics? Or can Karl Marx and John Adams readily be compared to Albert Einstein and Thomas Edison?
I have a different way of categorizing political and technical ideas. I actually think those guys came up with what we would call today great business-model ideas. They're not necessarily all about capital, but they have to do with how to organize people or processes to accomplish a goal. So I don't differentiate political ideas from others. I do however divide ideas into ones that are potentially win-win versus those that are more zero-sum. In general, because technology fuels economic growth, there are a higher proportion of technology ideas that are win-win than political ideas. To the extent that you end up with a political idea like capitalism that creates a lot of growth, maybe there is a win-win there, though a lot of people argue that there are a lot of losers in capitalism. Look at the pandemic example I gave earlier. There is a huge social component there. It's not just technology.
NEWSWEEK: Can we start with the seemingly most obvious but probably most perplexing question: What is an idea?
Edward Jung: We think of an idea as an action that causes a reaction, and that reaction creates products of value. I'll give two examples. If you made a diagnostic device that could give you early treatment of cancer, there is some very definite value: extended lifetimes, economic value, products that you could put on the shelf, and so on. But then there are other ideas like pandemic control that would clearly create a lot of value for society and people in general, but it is a little hard to figure out how you would charge for it. That is one of the things that would differentiate pure ideas from extremely applied ideas. Once you have an idea like solving pandemics, though, sometimes someone will figure out how to create economics around that, even though nobody knows how to do it today.
What, then, is a good idea?At the heart of it, Intellectual Ventures is a capitalist company, so to us a good idea is nominated by some notion that it could be reduced to something practical. You could have an idea that is literally quite concrete, like how do you make your cell-phone battery life better. Very practical. But if you go back to the pandemic, that's also a good idea because it benefits society in general. So what we've done internally is divide goodness into many different categories, many time domains and many levels of certainty that we can actually create some economic value out of it. Some of our crazy future ideas are very risky, but because we do it at such a large scale, we can do a few of those as well as ones who are safer, more nearer term and more easily translated into economics. But good also depends on the area of technology you are in. So a good idea in computer science is measured differently than a good idea in life science.
Much of capitalism's genius is its incessant pressure to innovate. To that end, are good ideas losing out because they're not economically viable?
Let's say you're a public company. Your shareholders have a certain time horizon they have been trained to look at, and it is very difficult for your to invest outside of it. So if they are pressuring you for every quarter's results and you fail to meet those results, you're punished and naturally you're not going to be investing further down the chain. If part of your brand is to be very future-looking, however, then your shareholders will have much more patience. What is economic depends on where you've positioned yourself. We have a whole part of what we do that is positioned very far in the future. Because we work on intellectual property and not necessarily on product, by our nature we have investors who tend to be more patient. That allows us to operate in a domain that is further out in terms of its economic value. Other companies do this too. If you're big enough, you can invest a good amount in research.
A company like General Electric, for instance?Or Microsoft, who has a pure research group. It's actually one of the largest research groups in the industry, and that's because they have a lot of money. We can push even further out, because people's expectations aren't that we are going to produce the product, but we are going to produce the infrastructure to allow other people to create products. In that sense, we can expand the definition of what is economic to think about. I think that's valuable.
If you have to take so many leaps, then how do you gauge risk?
Ultimately, it's similar to taking that stack of papers and dropping it off the top of a staircase, right? There's a bit of "who knows?" and reality will eventually tell you. A lot of what we do is roadmaps. We can sit down and think about—and we've done this—with the rising costs of health care and the shift to chronic diseases and the change of demographics in civilized countries and the way socialized medicine is working, really what is going to happen to health care in the next 10 or 20 years? What needs to happen? What will be the economic pressures and therefore where are innovations necessary? We can think about that without the constraint of, "What is our business today?" In that context, ideas have a much purer value. For example, if an idea requires a complete change in the way socialized medicine works, well, OK, that's a pretty risky idea. It has to be a really fantastic idea to change something like that. That context, both what's happening today and the pure form of what needs to be solved allow us to try and assess that risk.
Wouldn't you say that human beings are most innovative when their backs are up against the wall?
This is a matter of opinion, but I think when people's backs are to the wall, that's not when great ideas come up. That's when great ideas get funded. Right now there's a lot of stock thinking about alternative energy, because we feel that our backs are coming up to the wall. That's not the best way to fund innovation, but it shows you that creating the incentive or capital will get more people to develop the ideas. I happen to think that when you find a great inventor, they invent all the time. You can't stop them, in fact. At one of our first invention sessions, the icemaker in the refrigerator broke. Inventors, among other things, seem to need caffeinated beverages, and immediately you had three or four top-notch inventors inventing new icemakers.
On the spot?
On the spot. They said, "The icemaker broke. Oh, hey, why do icemakers work this way? Well, here's a better way to make an icemaker. No, here's another way." And instantly, we had several new icemaker inventions. Now, we can create lots of new inventions and ultimately we can't pursue them all. So we have a process we call triage, and those didn't make it in triage because icemakers weren't as interesting as some of the other problems we were solving. But it goes to show that inventors will invent, if given the opportunity. You don't have to wait until your back is up against the wall.
What kind of education makes the most innovative people?
That's a hard one to answer. It's not the educational background as much as it's the personality that develops and much of that comes from the context in which they were raised and obviously some is genetics. It is interesting that we're operating globally now and you tend to see more flexible inventors—big idea inventors—coming out of the U.S. instead of a lot of other countries.
Why is that?Among the countries we operate in, by many metrics the U.S. actually has the worst education system. Why is it that we kind of have the worst education system but the best innovation track record? It's because, I believe, culturally we have a lot of people who have no fear of failure. The beauty, not of our education system, but of our culture, is that we will rebound from failure. Once I talked to a huge multinational company in Asia. When the CEO walks down the hall, everyone stands up and bows. I gave a talk about how many failures I had in starting new groups at Microsoft. At the end, I put a timeline down of my failures and I turned to the chairman of the company and all of his CEOs and said, "If I was at your company, when would you have fired me?" He pointed at the timeline and said, "Frankly, probably in your first year." I told him that if that were the case, I probably wouldn't have lasted long enough to create things of real value that I did at Microsoft, then, would I? Ultimately, most common among the great inventors we work with is that they have no fear of failure, no respect for the boundaries of their education, yet they are self-aware enough to take input from others.
Is technological innovation different from innovations in politics? Or can Karl Marx and John Adams readily be compared to Albert Einstein and Thomas Edison?
I have a different way of categorizing political and technical ideas. I actually think those guys came up with what we would call today great business-model ideas. They're not necessarily all about capital, but they have to do with how to organize people or processes to accomplish a goal. So I don't differentiate political ideas from others. I do however divide ideas into ones that are potentially win-win versus those that are more zero-sum. In general, because technology fuels economic growth, there are a higher proportion of technology ideas that are win-win than political ideas. To the extent that you end up with a political idea like capitalism that creates a lot of growth, maybe there is a win-win there, though a lot of people argue that there are a lot of losers in capitalism. Look at the pandemic example I gave earlier. There is a huge social component there. It's not just technology.
URL: http://www.newsweek.com/id/145772
© 2008
###
Posts
No comments:
Post a Comment