Tuesday, May 15, 2007

A sea change in intellectual asset management

An article senior editor Roger Parloff wrote in yesterday’s Fortune magazine had quite a bit of echo in the blogosphere during the last two days. Recently there have been some other events related to intellectual assets in color science that suggest we may be at the verge of a sea change in intellectual asset management.

Before I go any further, I need to make a big disclaimer. What I am writing in this post is my personal view based on what I see from my window and has absolutely nothing to do with my employer. I am just a foot soldier working in the trenches and do not have a clue of what is going on in HP regarding intellectual assets; hence do not even try to read anything in this post other than the textual words.

Bankers keep their assets in vaults and take them out only when necessary for business. Lawyers lock their intellectual assets in sturdy filing cabinets and safes every evening before they go home. We scientists take our employer’s intellectual assets home every evening, and the employers can only hope to see us back the next morning—and hopefully with our brains intact.

Society would not work well if its capitalists would live in constant fear of losing their assets. Therefore, governments came up with the concept of a patent. When technologists invent something useful, novel, and non-obvious, their employers are granted a patent protecting this invention, so they can recuperate their research investment and invest in new research. This allows society to progress.

Most of the time this system works quite well, but sometimes sand gets in the cogs. In the color community we have seen quite a bit of this, like the Schreiber patent, the blue noise halftoning issue, FlashPix, remote proofing, and so on. Often the issue can be resolved through cross-licensing or just plain licensing. Patents are true intellectual assets that have a business value and can be traded for the greater benefit of all in society.

Unfortunately our world is suffering under the increased diffusion of greed. Think for example how much more inexpensive health care would be if there were no greedy injury lawyers. With the increased conglomeration of companies and the ensuing deepening of their pockets, intellectual assets are increasingly attracting the attention of such greedy ilk, which use the proceeds for luxurious life styles instead of reinvesting them into research useful to all in society.

The phenomenon is not new—in our field it started maybe two decades ago—but recently one has the impression the matter is spiraling out of control. As a lowly technical worker, just by looking out of my window I cannot tell which patent disputes are driven by greed and which are genuine business transactions, but there is a number of issues that lately found a lot of echo in the press.

Besides the open software issue mentioned in the Fortune article, the trade journals have reported disputes directly related to color science and imaging. Examples are the impact of the Forgent patent on JPEG, Canon’s attempt in commercializing the surface-conduction electron-emitter-display (SED) TV technology, and the litigation around LED illumination with variable correlated color temperature. As stated, let us be positive and hope they are all genuine business transactions.

In such a degradation of our ecosystem, what is the capitalist supposed to do to avoid going paranoid? The knee-jerk reaction is to use one’s technology dollars for patent litigation instead of paying nerdy researchers. However, with an engineer costing $80 and hour and a litigation lawyer billing $800 an hour here in the Silicon Valley, one should hope investing in 10 scientists may be more economical than retaining an extra lawyer.

Of course, this requires that the 10 scientists should be well managed. For example, they should work on stuff nobody else is doing so they can realize their full potential in securing patents and other intellectual assets. When good researchers are leashed onto established technologies, the result is less beneficial for society. For example, my personal bet is that without JPEG patent litigation Microsoft would probably not have had to invent the new HD Photo technology it has recently proposed as a new JPEG standard.

In summary, if influential companies have to do CYA research to survive greedy assaults on their intellectual assets, we will see a sea change in the form of more small incremental technology improvements instead of big leaps, and higher product costs to cover the licensing and litigation fees. And when researchers go paranoid, what they fear are not lawyers but headhunters, their brains being the locus of their own assets…