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June 15, 2007

Lawyer Wikis

A colleague of mine, Joel Riff of Riff & Bui, sent me the article Lawyers Collaborate with Wikis from Law.com.

Wikis are online collaboration tools that enable multiple users to post articles and to edit one another's postings.  The most famous example is Wikipedia, an online Wiki-based encyclopedia that news reports say is now larger than proprietary encylcopedias, such as Encylopaedia Britannica.

A good list of legal wikis is available at www.editthis.info, and another at the Wiki Index, according to the article.

Wikis could make sense for collaborative drafting of agreement forms, legislation and regulations, among other things. 

June 14, 2007

Patent Factoids

Some factoids about patents:

  • Typical cost to obtain a U.S. patent: $5,000 to $25,000. 
  • Cost to invalidate a patent: Legal fees average $4.5 million in patent disputes where more than $25 million is at risk.
  • Cost of obtaining a patent versus invalidating one: You do the math.
  • Number of inventions under active patent in the U.S.: 1.6 million
  • Number of patents owned by International Business Machines Corporation (IBM), the 14 year recordholder of the largest number of patents awarded to a single company: 3,651.
  • Percentage of software patents to total patents awarded in the early 1980's: 2%
  • Percentage of software patents to total patents awarded today: 15%

(I am not a registered patent attorney, and do not prosecute or litigate patents.  I've worked on many patent licenses and agreements over the years, though.)

(Source: "Businesses Battle Over Patent Laws," The Wall Street Journal, June 9-10, 2007.)

June 12, 2007

Size of the Intangible Economy

How large is the intangible economy in the U.S.?

  • U.S. businesses invest about $1 trillion in intellectual property and other intangible assets, according to a study by the Federal Reserve Board.  That's as much as they invest in equipment and other tangible investments.
  • Intangible assets, including intellectual property, constitute nearly 1/3 of the value of all U.S. stocks, or 45% of U.S. Gross Domestic Product (GDP).

(Source: "Businesses Battle Over Patent Laws," The Wall Street Journal, June 9-10, 2007.)

June 08, 2007

Tension between Quality Methodologies/Six Sigma and Innovation

Business Week ran an interesting cover story about the tensions between quality methodologies such as Six Sigma, and innovation and creativity.

In sum, "while process excellence demands precision, consistency, and repetition, innovation calls for variation, failure and serendipity."  According to Management Professor Vijay Govindarajan, "the more you hardwire a company on total quality management, [the more] it is going to hurt breakthrough innovation.... [t]he mindset that is needed, the capabilities that are needed, the metrics that are needed, the whole culture that is needed for discontinuous innovation, are fundamentally different." 

The article mentions one Wharton/HBS study that found Six Sigma leads to incremental innovation rather than "blue sky" work.  After a quality program, patents issued based primarily on prior work (incremental improvements) made up a "dramatically larger" share of the subject companies' portfolios than patents not based on prior work.

It also mentions that several companies, including 3M and Young & Rubicam, have pulled back from their focus on quality methodologies.

What to do?  In the same issue, consultant Jeneanne Rae suggests creating an ambidexterous company, which would reserve process improvement approaches to cases where they are truly needed to cut costs and improve profitability.  She advocates maintaining a separate organization with its own incentives and talent to produce radical innovation.

Source: "At 3M, a Struggle between Efficiency and Creativity," by Brian Hindo, BusinessWeek, June 11, 2007.

Re-enter the Title Office - for Copyrights

In the old west, the land title office represented law and order, and helped keep the peace among ranchers, farmers and miners with competing claims.  In the movie version of the old west, the land title office invariably burns down... and the drama begins.

It's obvious that copyrights are critical to our economy, as the legal underpinning of software, movies, music, books, newspapers, magazines, art and other intellectual works.  You might be surprised to learn that, here in the 21st century, in some respects our copyright system resembles the old west, after the title office has burned down.

Professor Hal R. Varian explains a new trend to bring back law and order in a recent article, "Copyrights that No One Knows About Don't Help Anyone." (The New York Times, 5/31/07).

He points out that under current law, a work is automatically copyrighted when it is "fixed" in a "tangible medium of expression" (e.g., words written on a piece of paper, music saved to a CD, video saved to an online digital archive).  No notice (c-in-a-circle) or registration is required.  This came about when the U.S. joined an international treaty in 1989 known as the Berne Convention.  Many clients do not understand this, because they remember the prior law, which did require notice and registration.  (There are still many benefits from notice and registration, they just aren't needed to obtain and maintain the basic copyright itself.)

Although this approach is great for authors, Varian explains that it makes it very difficult - or even impossible - if you are seeking permission to use a work, but can't determine who the owner is, or can't find the owner.  (If you don't believe me, see Copyright Office Circular 22, How to Investigate the Copyright Status of a Work.)  Such works are called "orphan works."

Re-enter the Title Office.  Varian describes proposals by the U.S. Copyright Office and Stanford University Law Professor Lawrence Lessig to introduce a limited registration system for orphan works.  This will reduce costs of finding the owners and obtaining permissions.  He mentions other limited registries for clearing rights that already work well - the Copyright Clearance Center for permissions for printed works and the Harry Fox Agency for certain song permissions. 

These are pragmatic proposals.  Until some reliable registry exists, the drama (and frustration) of the old west will continue well into our century.