New copyright case

Yesterday, the Second Circuit Appeals Court may have thrown a large monkey wrench into the copyright system. In a case involving a settlement between freelance writers and publishers, the Court ruled that Federal district courts (such as the one that approved the settlement) have no jurisdiction over cases involving unregistered copyrights. In other words, unless the work is registered with the U.S. Copyright Office, you can not sue in Federal court.
Say what? Even though a past change in the law says that copyright is created when the work “becomes tangible”, it can’t be enforced until registered?
I don’t know if this is a glitch, a technicality or a major legal precedent. It is clear that everyone is now totally confused. As the New York Times story states, “People on both sides of the dispute said it was unclear what would happen next — whether the decision would be appealed, a new suit filed, or a new agreement negotiated.”
I suspect that this will go all the way to the Supreme Court. There is likely to legislation as well. In the meantime, the Copyright Office may be flooded with new registrations.
All of this could be a minor correct to the law. Or it could be an opening for some of the newer ideas on copyright, such as Lawrence Lessig’s idea for sliding scale fee for different time lengthens of copyright protection (see Protecting Mickey Mouse at Art’s Expense).
This could get interesting.
A copy of the decision is online. Other information is available from the Copyright Settlement website.

The Scots get it

Scotland has set up an Intellectual Assets Centre to help Scottish companies manage and utilize their intellectual assets (IA):

The IA Centre is a first, in Scotland and indeed in Europe – a unique centre to assist businesses in deriving value from their IA. Supported by the Scottish Executive, the Centre was developed in response to the demand from businesses to learn more about their IA. Initial studies showed that, despite the number of businesses asking for advice, there were still many more that were not aware. Moreover, the value of unexploited IA lying in Scottish companies were judged to be several billion pounds!

The Centre aims to provide support and advice to mainly small and medium size enterprises. But the website is open to anyone and offers an array of tools and resources on intellectual asset management, including IA audit tools and case studies. Worth checking out.

Risk management and intangibles

Steven Pearlstein’s column in the Washington Post this morning is a good illustration of the limitations of the quantitative approach – in this case, The Art of Managing Risk. Pearlstein talks with risk management expert Vince Kaminski:

As Kaminski sees it, the first problem is that the models these systems are based on, while potentially useful, have serious limitations that are too often ignored.
The data that go into them, he says, are so aggregated and “averaged” that they disregard outliers and abnormalities that turn out to be important. There are also risks — like risk to reputation — that are ignored because there is no data set by which to quantify them.
Moreover, by relying heavily on past patterns of behavior, they are often useless in dealing with the new products and new markets that are most often the source of the trouble.
Most importantly, Kaminski says, the models have been unable to capture the cascading effect as problems spread, confidence is undermined and people start to act irrationally.
. . .
“What matters in terms of managing risk,” Kaminski says, “isn’t the model — it’s the intuition, judgment and experience to spot the risks as they are developing, and the character to be able to stand up to very aggressive and successful commercial people and say, ‘Enough is enough.’ “

In other words, the key is tacit knowledge and understanding the intangibles, like reputation risk and human behavior.
The same can be said of other “quant” approaches. Years ago, I was in a lecture by a forecasting expert who was comparing large econometric models with “expert” opinion. He said that over iterations of revising a forecast, the models and the experts tend to converge. One person asked, “is that because the experts modify their judgments in light of the results of the models?” “No,” he replies, “it is just as likely that the modelers tweak the model based on the experts judgments.”
Metrics are important — but the numbers don’t always capture everything. As we improve our measurements of intangible, let us always remember that part of our quest for information will lie outside the realm of the quantifiable.

Innovation and the Presidential candidates

Last week, I mentioned the latest issue of Business Week’s Inside Innovation. That issue is running a piece on Proposed Presidential Innovation:

BusinessWeek questioned the leading candidates in the Republican and Democratic parties about their views on innovation. First we asked for their definition of the word. Innovation is not simply invention. It involves creating value, both in business and in civic society. Their responses varied from broad visions to specific policy proposals.
Then we asked for their plans to stimulate innovation in four major areas—science and engineering education, green energy, the military, research and development—as well as how they would develop better ways to measure innovation.

Of course, they are not the only ones looking at the candidates positions on these issues. Over at EntreWorks Insights, Erik Pages has listed a summary of the candidates’ positions on economic development and the innovative economy:

We’ve dug through the various candidate’s web sites and position papers and tried to give a sense of how they might govern in issue areas such as regional economic development, science and technology, innovation, and the like. It’s still a little early for extremely detailed policy proposals, but you can get a sense of how candidates might govern if elected to our nation’s highest office.

I won’t try to summarize that various candidate’s positions – you will have to read the articles yourself. But I will make a quick comment on the framing of the issue. I found it very interesting that Business Week says “innovation is not simply invention.” But they fail to focus on this, choosing rather to look at the four specific areas of R&D. In other words, innovation is not invention but is R&D and S&T. No questions about other aspects of innovation policy — such as the role of the government beyond basic research or questions about financing/venture capital or about how to stimulate and capture user-driven innovation or the role of the US in a global innovation system. BW does get kudos for raising the question of measuring innovation.
The EntreWorks summary covers a broader range of topics, but suffers from that problem of all summaries – it is a distillation of what the candidates have already said, not what questions need to be asked. In all fairness, of course, EntreWorks doesn’t have the clout of a Business Week in asking the questions.
This Presidential election cycle is It is both compressed and strung out. The compression is in the front end of the primaries. It is possible that we will know the nominees by the President’s Day break. It is strung out in that it has been going for some time — and we are only now under a year from the election date. So there will still be plenty of time to ask the key questions of the candidates. And for the candidates to refine and expand their positions on innovation and the I-Cubed Economy – beyond the standard answer of “more R&D.”

The power of retail

I realize that retail shopping is what ultimately makes the economy go (all those gods and services we produce have to be bought by someone). I also realize that we are approaching the biggest shopping day of the year. And I realize that Wal-Mart is the largest retail outlet. But I did find this bit of news a little weird — When Every Day Feels Like Black Friday – washingtonpost.com:

Because it expects Saturday to be so similar to Black Friday, Wal-Mart has requested that the two days be merged into one, creating a 48-hour Friday. The company even sent a letter to honorary Astronomer Royal Martin Rees, professor of cosmology and astrophysics at the University of Cambridge in England, to request his blessing.
“Does a week always have to contain seven days? And do those days always have to be the seven we’re accustomed to?” wrote Nick Agrawal, vice president of Wal-Mart’s corporate communications. “Certainly here in the U.S., those seeking more time for their holiday shopping, the addition of a second Friday might be just what they’re looking for.”
However, Wal-Mart is petitioning the wrong person. The International Bureau of Weights and Measures in France is the world’s official time-keeping organization. Its U.S. branch is the National Institute of Standards and Technology, which falls under the Department of Commerce.
Reached by phone in his office in Cambridge, Rees was at a loss for words on Wal-Mart’s double-Friday request. “I am completely flummoxed over this conversation,” he said.

Last I checked, the definition of a day is based on the natural phenomena of the sun traversing the sky — including sunrise and sunset. As powerful as Wal-Mart is in the Intangible Economy, I don’t think it can make the sun stand still.
But, I guess it was worth a try. Have a Happy Thanksgiving!

Can design save GM?

To answer this question, listen to this Business Week podcast with Ed Welburn, GM’s design chief at Redesigning General Motors.
One comment — this is about “design” as product development. Some examples are tapping into the expertise of design studios in Brazil and Korea in the understanding small cars and the use of design in differentiation of brands. Not the same as “design thinking” – where the design method is used in business strategy. But it gets close, especially the discussion of the strategic mission of concept vehicles: introduce new technologies, help explore and establish brand.

A proxy for the trend toward the intangible economy

I ran into this piece of information in a recent Economist story on oil prices — Economics focus: Shock treatment:

Rich countries use less than half as much oil as they did in 1970 for each inflation-adjusted dollar of GDP. So although prices in real terms have returned to levels last seen in the 1970s, their impact is not as powerful when set against the diminished economic importance of oil (see charts).

That is a strong measure of the extent to which the economy is becoming, as Alan Greenspan used to say, “weightless.”

Inside Innovation

The latest issue of Business Week’s Inside Innovation is available on line. Looks like a good set of stories: Innovation at HP, Design at Ford, How the Presidential candidates view innovation, to name a few. More comments on the individual stories later.

Some things never change

I recently came across a book written over a hundred years ago by the English journalist William Thomas Stead, entitled The Americanization of the World, Or The Trend of the Twentieth Century (available through Google Book Search). Stead was a popular writer of his time, who later perished on the Titanic. The core argument of this book was that Britain could only guarantee future glory if it re-united with the United States (essentially on the US’s terms). Quite a remarkable thing to say in 1902, at the height of Britain’s hegemony.
Most of the book is about how American culture, products and influence is spreading across the entire globe. A few comments caught my special interest. The first is this statement:

In the Twentieth Century there seems to be ample ground for believing that the Americans will distance us in science more decisively than in almost any other department of human activity. The reason for this lies, not only in the genius of the people, but because of the provision made for scientific research by the munificence of American millionaires is infinitely in excess of anything that is provides in the British Empire.

The second point was this:

Our patent laws, instead of encouraging invention on the part of those who have brains but no money, absolutely handicap the poor man, and leave him helpless to profit by his own inventions.
. . .
The American patent law secures a patentee protection for seventeen years for a total cost of ₤8. To secure a patent for fourteen years in this country requires an expenditure of ₤99. The American Patent Office makes a fairly thorough examination of a patent, and, if required, the applicant is assisted to put his application into proper shape. With this stimulus to invention, it is not surprising that the inventive genius of the American has outstripped that of the Old World. Fortunately this can be remedies, for our Patent Office is one of those institutions which can be Americanised with the greatest ease.

In other words, the policy agenda is funding of basic research and patent reform. Sound familiar?
Two other quick points. Stead makes much of the American educational system as a source of our success. That too sounds familiar. But he also points out this factor:

Not only do the Americans equip all their universities with magnificent apparatus and adequate endowment, but they send their ablest student abroad to study with the best experts in every branch of science. They tap the brains of the world, and keep themselves fully abreast of the latest results of modern research.

That ability to absorb information and knowledge from where ever it may be found is something that has been lacking at some times in our recent past. The not-invented-here syndrome and the belief that we were the pinnacle of knowledge have been all too familiar as well.
Happily the US innovation system as currently evolving is embracing the open innovation process – restoring that ability to “tap into the brains of the world.” Unhappily, travel restrictions and immigration policies are making it more difficult. One step forward, one step back.
Some things never change.

Consumer Electronic Show awards – and not green

Business Week has this story on this weeks’ announcement of the Consumer Electronics Show innovation awards – CES Awards: A Push to Innovate:

This year, the judges lauded pared-down designs which focused on blending functionality with panache. The Bowers & Wilkins Zeppelin iPod dock, for instance, is an audacious form which still promises high quality sound projection. The Drop cellphone handset, by fuseproject, is an exercise in radical chic, with a form based on the shape of a water drop.
Of more concern to eco-watchers was this year’s apparent lack of focus on issues of sustainability. Last year’s awards were clearly green-themed, with winners including Herman Miller’s (MLHR) eco-aware, LED-clad Leaf lamp and Intel’s (INTC) energy-efficient Core 2 Duo processor. Despite the judges’ insistence that green criteria make up an important part of the judging process, the lack of a statement could signal the environmental train is running out of steam.

Either that, or the designers are still struggling between cool design (panache) and functionality (as characterized by eco-sustainability). Or maybe it is a continuation of the clash between performance and eco-sustainability.
In any event, designers need to move beyond this either or. Designs shouldn’t win because they are eco-sustainable. Eco-sustainability should be an integral part of all designs. Eco-sustainability should be a threshold criterion – not something that you give bonus points for.