Tuesday, December 31, 2013

(BN) Google Chairman Says Mistake Was Missing Social Networks

(Bloomberg ) Google Inc. (GOOG) Executive Chairman Eric Schmidt said missing the rise of social media was the biggest mistake he made at the world's largest search-engine operator.

"In our defense, we were busy working on many other things but we should have been in that area and I take responsibility for that," he said in an interview on Bloomberg Television yesterday.

Schmidt led Google as chief executive officer from 2001 until 2011 when he became executive chairman, during which time the Mountain View, California-based company went public and became a go-to site for search and advertising. Yet Google initially paid little attention to Facebook Inc. (FB), which started in 2004 and has since become the world's biggest social network with more than 1 billion members who use the service to connect and share interactions with friends.

Facebook and Google are now locked in a battle for online and mobile advertising dollars. To compete in social networking, Google introduced a Google+ social service in 2011.

Google said in October that it has about 300 million consumers who visit the Google+ stream of content from friends, while the total users logged in to the service who undertake a monthly social action -- including surfers who watch a video on YouTube recommended by a friend or endorse a search result -- is 540 million.

Not seeing the rise of social networking is "not a mistake we're going to make again," said Schmidt in the interview.

He also predicted 2014 would be a victory lap for mobile computing.

"The trend has been that mobile was winning. It's now won," he said. The ubiquity of hand-held computers will open up new possibilities for applications in entertainment, education and social life, Schmidt said.

// hiring Schmidt was a bigger mistake.

Monday, December 30, 2013

Cloud security: a new kind of an arms race in 2014

To me, the most interesting high-tech trend to watch in 2014 will be the competition between US government agencies, e.g. NSA, and US private high-tech companies, e.g. Google, Facebook, and others. Given the recent court decision, we can easily predict that the US government will continue intercepting, storing, and decrypting private and commercial electronic traffic. On the other hand, cloud companies like Google built their business on user trust and data security. They've already started the process of rethinking system security, including broad use of strong encryption algorithms.

An implicit assumption in the industry is that if the government can break into your data then any skilled hacker can do the same. In short, the deliberate weakening of security standards creates a direct threat to commercial cloud computing. As a result, we should see an arms race between the government and businesses in the area of digital security. Before, arms races were an exclusive domain of rival governments. Today, the global nature of the Internet brings a new category of players into the picture. We should expect exciting innovations ahead. Maybe even quantum computing will become a reality sooner, rather than later.

tags: innovation, internet, cloud, security, battle

Lunch talk: Johann Sebastian Bach (BBC)

(BN) Ford Widens U.S. Sales Lead Over Toyota on Hybrid Models

(Bloomberg ) Ford Motor Co. (F) said U.S. sales for its main brand will surpass 2.4 million vehicles this year, as record demand for its Fusion sedan and hybrid models helps extend a lead over Toyota Motor Corp. (7203)'s namesake line.

The Ford marque entered December ahead of Toyota by 388,825 cars and light trucks, heading for its fourth straight year as the top-selling U.S. auto brand. In 2012's full-year tally, the margin was 322,521.

The brand title reflects Chief Executive Officer Alan Mulally's strategy that the second-largest U.S. automaker would flourish by narrowing its focus. He sold off the Jaguar, Land Rover, Aston Martin and Volvo luxury lines, shuttered Mercury and pushed the namesake brand to complement its strengths in pickups and sport-utility vehicles with more competitive cars.

"We are not overly reliant on any one segment," John Felice, the Dearborn, Michigan-based company's vice president of U.S. marketing, sales and service, said in a statement today. "With 16 launches next year, we're looking to keep our sales momentum going."

Demand for Fusions and hybrids such as the C-Max will boost Ford-brand sales to retail buyers to the highest since 2000, the automaker said.

The Toyota division is on pace to beat the Ford brand this year in light-vehicle retail sales, which exclude fleet customers such as rental companies, Bill Fay, group vice president for U.S. Toyota sales, said in a Dec. 5 interview. Toyota-brand sales include Scion vehicles.

"That's been a result of the recovery of the brand and the division the last couple years," Fay said. "It's not one of our stated goals. We're more focused on trying to sell our plan, satisfy our customers and support the dealers' business model."

Fusion Gains

Ford's Fusion, redesigned in 2012 with styling evocative of an Aston Martin, will exceed 290,000 sales this year, the company said in its statement. The model last month passed its previous annual sales record, set in 2011. Deliveries rose 22 percent through November, outpacing gains of 1.3 percent for Toyota's Camry and 11 percent for Honda Motor Co.'s Accord.

Ford said its hybrid sales will top 80,000 this year, almost triple the 2012 total. By May, the automaker had beaten its previous annual best, achieved three years ago.

Keeping the hybrid gains going will be a challenge in 2014, as C-Max sales momentum slowed after Ford restated its fuel efficiency rating in August. Since the company cut the rating by 4 miles (6.4 kilometers) per gallon to 43 mpg, the C-Max has had its three worst sales months since September 2012, when the model debuted in the U.S.

Pickup Test

The Ford brand also faces a test with the redesign of the F-150 pickup, the company's most profitable model line. IHS Automotive has estimated that Ford's large-pickup production will fall 8.5 percent in 2014 as the company's truck plants change over to the updated pickup. The revamped F-150 sheds weight through more use of aluminum in its body and will be unveiled at the Detroit auto show in January, people familiar with Ford's plans have said.

The company's statement today didn't give a forecast for full-year F-Series sales. Ford sold 688,810 of the pickups in the U.S. this year through November, a 19 percent increase. The F-Series, headed to its 32nd straight year as the top-selling vehicle line in the U.S., had a lead through 11 months of more than 250,000 over General Motors Co. (GM)'s Chevrolet Silverado, which held the No. 2 spot.

(BN) Samsung, Amazon, Bed Bath & Beyond: Intellectual Property

(Bloomberg ) Samsung Electronics Co. (005930)'s Samsung SDI unit applied jointly with Germany's Robert Bosch GmbH for a patent covering a battery-operated vehicle.

Application 20130346783, published yesterday in the database of the U.S. Patent and Trademark Office, covers a "method and arrangement for monitoring at least one battery, battery having such an arrangement, and motor vehicle having a corresponding battery."

The companies said in their application that the invention is related to battery safety functions.

On Dec. 19, electric-car company Tesla Motors Inc. (TSLA) said U.S. regulators reviewing battery-related fires concluded that Tesla's Model S and charging system didn't cause a fire in a Southern California garage last month.

Patent Suit Losers Should Pay Legal Costs More Often, Court Says

Patent owners who lose infringement lawsuits should have to pay the winners' legal fees more often, a U.S. appeals court said in adding its views to a debate before Congress and the U.S. Supreme Court.

The U.S. Court of Appeals for the Federal Circuit in Washington yesterday ordered a judge to analyze whether memory-cell maker Kilopass Technology Inc. should pay legal fees incurred by closely held competitor Sidense Corp.

The court must consider "whether Kilopass acted in bad faith in light of the totality of the circumstances" even if there's no specific evidence of wrongdoing, Circuit Judge Kathleen O'Malley wrote.

The Federal Circuit, which handles U.S. patent appeals, has been grappling with how to crack down on owners who demand royalties on patents that may not be infringed or valid. The Supreme Court in October accepted two cases on the issue and Congress is considering legislation that would require losers in patent cases to pay winners' fees.

The issue of legal fees is part of a broader debate over a rise in patent suits by businesses whose sole mission is to extract royalty revenue. Those entities, dubbed "patent trolls" by critics, filed 19 percent of all patent lawsuits from 2007 to 2011, according to the Government Accountability Office. A White House report said more than 100,000 companies were threatened last year with infringement claims.

"Too many patent owners are bringing claims that are meritless and then settling for a nuisance value with the expectation their claims would never be tested," said Edward Reines, a lawyer with Weil, Gotshal & Manges LLP in Redwood Shores, California, who also teaches at Stanford Law School. "The intrepid defendant who fights and wins ends up not being compensated for their fees."

The case is Kilopass Technology v. Sidense Corp., 13-1193, U.S. Court of Appeals for the Federal Circuit (Washington).

Magna Strikes Back at TRW Over Vehicle Back-Up Camera Systems

Magna International Inc. (MG)'s Magna Electronics filed a patent-infringement complaint Dec. 23 against TRW Automotive Holdings Corp. (TRW) at the U.S. International Trade Commission in Washington, according to a notice published Dec. 24 on the agency's website.

Magna seeks a ban on the importation of vision-based driver-assistance system cameras. The company claims TRW's cameras infringe two of its patents.

TRW filed a trade commission complaint against Magna in September over a patent for imaging-processing chips used in Magna's driver-assistance technology. It asked the commission to block imports of Magna's China-made Eyeris cameras.

The two companies also have patent lawsuits against each other pending in federal court in Michigan.


Amazon Is Told Plastic-based Pants With Deity Image Is Offensive

The Universal Society of Hinduism demanded that Seattle's Amazon.com Inc. (AMZN) quit carrying pants bearing the imagine of another Hindu deity.

In a Dec. 26 e-mailed statement, the Reno, Nevada-based society said it finds the use of the image of the elephant-headed Ganesha "worn on one's legs, crotch and hips" to be inappropriate.

The society said that the "Ganesha's Dream" hot pants and bell bottoms were offensive and should be withdrawn. According to Amazon.com's website, the pants are made by Teeki Inc. from recycled plastic through the use of solar energy.

Vernon, California-based Teeki says on its website that the pants are manufactured in California. The company also features images drawn from tarot cards, outer space, "deer medicine" and unicorns on its products.

The society earlier criticized the use of the Hindu deity Vishnu in an episode of ABC's "Agents of Shield" television program, and persuaded Philadelphia-based Urban Outfitters Inc. (URBN) to quit selling socks with a Ganesha image. According to its website, Urban Outfitters is still selling tapestries, duvet covers and handbags with images of the elephant-headed Ganesha.

The group previously said it sought to erect a statue of the religion's Lord Hanuman among monuments on the grounds of the Oklahoma Capitol. It said Dec. 20 that Hindus are "heartbroken" over the reported decision by a state commission to declare a moratorium on new monuments there.

Bed Bath & Beyond Told Not to Sell Fake Chambord Coffee Makers

Bed Bath & Beyond Inc., the Union, New Jersey-based housewares retailer, won't be able to sell coffee makers bearing the "Chambord" trademark, except for those actually made by Bodum USA Inc.

According to an agreed-upon order filed in federal court Dec. 17, fake Chambord devices must be removed from stores.

Triegen, Switzerland's Bodum AG's U.S. unit had said that the housewares chain was selling coffee makers sold by one of the company's competitors and using the Chambord mark without authorization. Hang tags on the offending merchandise indicated falsely that the fake products were Chambord coffee presses, and even included Bodum's product identification number, according to court papers.

The Swiss company also accused the housewares chain of listing on its website the fake products as Chambord coffee makers.

Bodum sought awards of money damages, including profits Bed Bath & Beyond received from the sale of the allegedly infringing products, a court order for the seizure and destruction of all of the fake coffeemakers and promotional materials, and awards of attorney fees and litigation costs.

Under terms of the Dec. 17 order, the retail chain agreed to remove and destroy or send to Bodum's counsel all the fake coffee makers, and to remove all references to the fakes as "Chambord" on its website.

The order didn't discuss possible damages.

The case is Bodum USA Inc. v. Bed Bath & Beyond Inc. (BBBY), 13-cv-08812, U.S. District Court, Northern District of Illinois (Chicago).


Time Warner's 'Game of Thrones' Most-Pirated TV Show in 2013

Time Warner Inc. (TWX)'s HBO's "Game of Thrones" was the television program most pirated in 2013, the news website TorrentFreak reported.

In 2013, there were 5.9 million downloads of the show made using the BitTorrent file-sharing protocol, causing "Game of Thrones" to beat any other program by more than 1.7 million downloads, according to TorrentFreak.

Other frequently downloaded programs include "Breaking Bad," which was downloaded 4.2 million times through BitTorrent; "The Walking Dead," 3.6. million; "The Big Bang Theory," 3.4 million, and "Dexter," 3.1 million, TorrentFreak reported.

TorrentFreak said David Petrarca, director of "Game of Thrones," has said that piracy gave the show "cultural buzz" that promoted the program.

Trade Secrets/Industrial Espionage

Nimble Says NetApp's Trade Secrets Claims Aren't Substantiated

Nimble Storage Inc. (NMBL), of San Jose, California, responded to the trade-secret misappropriation lawsuit filed Oct. 29 by Sunnyvale, California's NetApp Inc. (NTAP), a provider of data storage and management products and services.

NetApp claimed that Nimble was recruiting NetApp employees to obtain trade secrets. Fifteen percent of Nimble's workforce and half of its executive staff are former NetApp employees, according to the complaint.

Nimble trades on NetApp's fame by telling customers that its technology teams include former NetApp employees, NetApp contended. The former employee downloaded confidential company information before they left and took it with them to Nimble, NetApp said.

In addition to trade-secret misappropriation, Nimble and the former NetApp employees were accused of conspiring to violate the Computer Fraud and Abuse Act to give Nimble a competitive advantage. The ex-employees were also accused of violating employment contracts.

NetApp asked the court to bar the use of its trade secrets and to grant access to laptops, hard drives, external storage media and Nimble's computer systems and servers to verify the extent and nature of NetApp materials stored there. The company also asked for money damages.

In its response, Nimble said that NetApp objected to "the loss of talent to a hot competitor on the verge of an initial public offering." Filing such claims in an attempt to stem the loss of employees to competitors "is not a legitimate basis to initiate litigation," according to Nimble's Dec. 20 filing.

NetApp's trade-secrets claims fail, Nimble argued. The company said that in NetApp's suit there are "no well-pled factual allegations" that the ex-employees' complained-of conduct occurred while they were at Nimble.

Nimble asked the court to dismiss the suit.

The case is NetApp Inc. v. Nimble Storage Inc., 13-cv-05058, U.S. District Court, Northern District of California (San Jose).

(BN) Drones to Take Flight at Six Test Sites Chosen by FAA

(Bloomberg ) The U.S. approved drone test centers in six states, including New York, as the start of research efforts to eventually allow civilian unmanned aircraft widespread access to the nation's airways.

The Federal Aviation Administration, after sifting through 25 applicants, also approved bids from Alaska, Nevada, North Dakota, Texas and Virginia, it said in an e-mailed statement.

"These test sites will give us valuable information about how best to ensure the safe introduction of this advanced technology into our nation's skies," Transportation Secretary Anthony Foxx said in a statement.

The selection is one of the first U.S. regulatory moves to begin integrating unmanned aircraft with planes and helicopters as companies including Amazon.com Inc. (AMZN) push to develop commercial drones.

Sales of civilian and military drones around the world may reach $89 billion during the next 10 years, according to a forecast by the Teal Group Corp., a Fairfax, Virginia-based aerospace research company. Drone makers include Northrop Grumman Corp. (NOC), General Atomics Aeronautical Systems Inc. and AeroVironment Inc. (AVAV)

Amazon Chief Executive Officer Jeff Bezos told CBS's "60 Minutes" that small copters may be able to drop off packages weighing as much as 5 pounds (2.3 kilograms), speeding delivery of books and other items. Bezos said it may take the FAA four or five years to create rules permitting the devices.

Cluster Effect

States expected winning bids to draw companies and jobs surrounding the test site, Andrea Bianchi, program manager for a joint proposal by New York and Massachusetts, said in an interview before the announcement.

The test sites will be used to help the FAA develop certification standards for unmanned aircraft and operating them within the air-traffic system, according to the law requiring the sites.

The agency considered factors including location, climate, the type of flights in the area and safety factors, it said in the release. "These six test applications achieve cross-country geographic and climatic diversity and help the FAA meet its UAS research needs," the agency said in the release.

The winners were the University of Alaska, which also has test sites located in Hawaii and Oregon; the state of Nevada; Griffiss International Airport in Rome, New York; the North Dakota Department of Commerce; Texas A&M University at Corpus Christi; and Virginia Polytechnic Institute in Blacksburg.

Privacy Rules

"We have successfully brought new technology into the nation's aviation system for more than 50 years, and I have no doubt we will do the same with unmanned aircraft," FAA Administrator Michael Huerta said in the release.

There will be almost 250,000 civilian and military drones in the U.S. by 2035, a study this year from the Department of Transportation found. Usage will be sparse at first, growing as technology hurdles are cleared, the study concluded.

Other users aren't waiting for the FAA. The agency fined Swiss citizen Raphael Pirker $10,000 for flying a model airplane at the University of Virginia in Charlottesville to make a promotional video in 2011. Pirker is challenging the fine, arguing that FAA has no authority to regulate drones.

In response to concerns that drones could threaten people's privacy, the FAA will require test-site operators to maintain records of devices flying at the facility, create a written plan for how data collected by airborne vehicles will be used and retained, and conduct a yearly privacy review.

Facilities must also adhere to all privacy laws that may apply to drone use, such as restrictions on law enforcement to obtain search warrants, according to the FAA's privacy policy.

No Guarantee

The FAA received 25 applicants from 24 states, from Alaska to Florida, according to the agency. The agency hasn't released a list of the applicants.

Earning the FAA endorsement for a test site isn't a guarantee that local economic development will follow, William Miller, a professor emeritus at the Stanford University Graduate School of Business, said in an interview.

Many factors -- including local labor laws, proximity to investors and the social and political climate -- have to be present before a test facility will spawn another version of California's Silicon Valley, said Miller, who has studied entrepreneurs and the regions in which they've blossomed.

"If there isn't a good set of conditions, the companies don't thrive. They often move elsewhere," he said.

(BN) Apple’s IOS Defeats Android in Battle of Christmas Day Shopping

(Bloomberg ) Here's one category where Android is still no match for Apple Inc. (AAPL): mobile shopping.

On Christmas day, Apple's iOS devices were used to make 23 percent of all e-commerce orders, according to a report yesterday from International Business Machines Corp. Phones and tablets running Google Inc. (GOOG)'s Android, meanwhile, only accounted for 4.6 percent. IOS customers also spent $93.94 per order, almost twice the amount of the average Android shopper.

Mobile devices in general have emerged as a more common way to buy things online, gaining ground on personal computers. They were used for almost 29 percent of Internet sales, up 40 percent from 2012, IBM found. Smartphones were more popular for browsing, while consumers spent more money when using tablets.

Apple's iPhone and iPad have maintained their edge as shopping tools, even as Android products sell in far greater numbers. Android, which is used by Samsung Electronics Co. and other top manufacturers, accounted for 81 percent of smartphone shipments last quarter, according to IDC. Apple had 13 percent of the market.

Pinterest Inc. and Facebook Inc. also helped drive online shopping on Christmas, IBM found. Customers referred to sales through Pinterest, an Internet-scrapbooking startup, spent almost $87 per order, while those referred through Facebook spent $72. Still, customers that came from Facebook were four times more likely to make a purchase than the Pinterest users, possibly because they trust their Facebook friends more, according to the report.

(BN) Apple, Microsoft, Asics, RedTube: Intellectual Property

(Bloomberg ) Apple Inc. (AAPL) is again seeking to ban sales in the U.S. of Samsung Electronics Co. (005930) products that were at issue in the companies' first patent trial in California and are now no longer on the market.

The iPhone-maker asked U.S. District Judge Lucy Koh in San Jose on Dec. 26 to bar sales of more than 20 models of smartphones and tablets, such as the Galaxy S 4G and Galaxy Tab 10.1, that a jury last year found to infringe Apple's patents. After Koh rejected Apple's bid for a sales ban on the infringing Samsung devices after the 2012 verdict, a federal appeals court on Nov. 18 cleared the way for the iPhone maker to pursue an injunction targeting some of its rival's products.

"Samsung's claim that it has discontinued selling the particular models found to infringe or design around Apple's patents in no way diminishes Apple's need for injunctive relief," Apple argued in a court filing.

The U.S. Court of Appeals for the Federal Circuit in Washington said that Apple could tailor its request to focus on infringement of patents covering smartphone features, such as multitouch technology, that were at issue in the 2012 trial. The company can't block Samsung products for infringing patented designs, according to the opinion.

The world's top two smartphone makers have spent hundreds of millions of dollars in legal fees on claims of copying each other's features in a global battle to dominate the market.

Adam Yates, a spokesman for Suwon, South Korea-based Samsung, declined to comment on Apple's request. Apple, based in Cupertino, California, has another case against Samsung going to trial in March over newer models, including Samsung's Galaxy S III. Should Koh, who is presiding over the case, impose a ban on the older models, Apple might argue that newer phones are the same products with new names.

The lower court case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California (San Jose). The appeals court case is Apple Inc. v. Samsung Electronics Co., 13-1129, U.S. Court of Appeals for the Federal Circuit (Washington).

Microsoft's Nokia Deal Said to Face China Limits on Patent Fees

Chinese mobile-phone makers asked regulators to make sure Microsoft Corp. (MSFT)'s 5.44 billion euro ($7.5 billion) bid to take over Nokia Oyj (NOK1V)'s handset business doesn't result in higher patent fees on wireless technology, said two government officials with knowledge of the matter.

Huawei Technologies Co. and ZTE Corp. (000063) asked China's Ministry of Commerce to set conditions on the deal making sure Microsoft doesn't raise patent licensing fees afterward, said the people, who asked not to be identified because they weren't authorized to speak publicly about the matter. The ministry is conducting an anti-monopoly review of the deal.

Microsoft and Nokia announced the planned transaction in September as the two seek to join forces in the smartphone market, where both have failed to gain traction amid the dominance of Apple Inc.'s iPhone and devices running Google Inc.'s Android platform. Microsoft won European Union approval for the bid on Dec. 4, and regulators said they would monitor Nokia's licensing practices.

David Dai, a spokesman for Shenzhen-based ZTE, declined to comment. Huang Man, a Shenzhen-based spokeswoman for Huawei, and Joanna Li, a Beijing-based spokeswoman for Microsoft, said they didn't immediately have information available on the matter. Calls to the commerce ministry's press office weren't immediately answered.

While Samsung and Apple dominate global smartphone shipments, Chinese vendors make up four of the top seven producers worldwide, market researcher IDC reported in October.

Samsung had a 31 percent share of the market in the third quarter. Apple accounted for 13 percent, according to IDC. Huawei ranked third with 4.8 percent, and Lenovo Group Ltd. (992) was fourth with 4.7 percent, IDC reported. The fifth-place producer was South Korea's LG Electronics Inc., followed closely by two more Chinese companies: the Coolpad brand of China Wireless Technologies Ltd. and then ZTE, according to IDC.

AmerisourceBergen Sues FFF Enterprises for Patent Infringement

AmerisourceBergen Corp. (ABC) sued a California competitor accusing it of infringing a patent for a system for pharmaceutical management and tracking.

Both companies provide pharmaceutical services. FFF Enterprises Inc., of Temecula, California, is accused of infringing AmersourceBergen's U.S. patent 8,285,607.

According to the complaint filed by the Chesterbrook, Pennsylvania-based company, FFF Enterprises' Verified Cabinet and Verified Inventory Program infringe the patent, which was issued in October 2012.

AmerisourceBergen said it's harmed by FFF Enterprises' actions and asked the federal court in Sherman, Texas, to bar infringing activities by the California company. AmerisourceBergen also seeks awards of money damages and litigation costs.

FFF Enterprises didn't respond immediately to an e-mailed request for comment on the lawsuit.

The case is AmerisourceBergen Specialty Group Inc. v. FFF Enterprises, 13-cv-00755, U.S. District Court, Eastern District of Texas (Sherman).


Asics Files Second Suit Over Olympic Athlete's Shoe Contract

Asics Corp. (7936)'s Asics America group filed another trademark lawsuit stemming from a dispute over shoes worn by Olympic gold medalist Jordan Burroughs.

Asics of Hyogo, Japan, has a contract with Burroughs, who won a wrestling gold medal in the London Olympic Games in 2012, according to the complaint filed Dec. 23 in federal court in Santa Ana, California. Burroughs agreed to endorse Asics products, and the Japanese company holds rights to use the athlete's name, image and likeness to promote its clothing and line of shoes, the company said.

Columbus, Ohio-based Lutte Licensing Group, which represents athletes and athletic brands related to mixed martial arts, claimed that Asics was interfering with its relationship with Burroughs. Asics then filed the initial suit in the same federal court. The case was settled in February, permitting Burroughs to endorse Asics shoes without interference from Lutte, according to court papers.

In July, the Japanese company began a marketing campaign for Burroughs signature wrestling shoes, "JB Elite." Lutte then began its own campaign for a Jordan Burroughs signature wrestling shoe that looks like the Asics shoe, the company said in its complaint.

After being sent a cease-and-desist letter by counsel for Asics, Lutte continued to market its Burroughs wrestling shoe, including through Facebook Inc. (FB)'s social media site, Asics claims.

Lutte didn't respond immediately to an e-mail sent through its Facebook page seeking comment on the suit.

Asics asked the court to bar Lutte from marketing and selling its version of Burroughs's shoe, and for awards of money damages, including profits Lutte derived from the alleged infringement. The company also asked for awards of extra damages to punish Lutte for its actions and for attorney fees and litigation costs.

The case is Asics America Corp. v. Lutte Licensing Group LLC, 8:13-cv-01993, U.S. District Court, Central District of California (Santa Ana). The earlier case is Asics America Corp. v. Lutte Licensing Group LLC, 12-cv-00592, U.S. District Court, Central District of California (Santa Ana).


RedTube Wins Order from German Court Against Piracy Suit Threats

RedTube.com, a European website that offers streaming video of adult content, won a court order barring a Bavarian law firm from sending out copyright-infringement demand letters to the website's users, the anti-copyright news website TorrentFreak reported.

Alex Taylor, vice president of RedTube, told TorrentFreak the decision by the Regional Court of Hamburg was a victory for his company and for "every person who visits streaming websites."

The letters were sent by Urmann & Collegen Rechtsanwaltsgesellschaft mbH on behalf of a Swiss company, Archive AG, which has been ordered to halt the letter sending, TorrentFreak reported.

RedTube told TorrentFreak that it refused to hand over user information to third parties.

Pub Owner Sued in Limerick Court Over Royalty Payments, License

Owners of an Irish pub were sued in Limerick Circuit Court for copyright infringement, Ireland's Limerick Leader reported.

The Irish Music Rights Organization filed the lawsuit claiming that Bourke's Bar, on Limerick's Catherine Street, lacks a license permitting the performance of live and recorded music and has failed to pay more than 4,000 Euros ($5,500) in royalties, according to the newspaper.

The pub's license was revoked in May for not paying royalties, according to the Leader.

Counsel for the pub owners told the court his clients disputed the amount the rights group said was owed and sought a delay in the court proceedings to prepare a defense to the charges, the Leader reported.

Friday, December 27, 2013

Lunch Talk: Pirates of Silicon Valley (documentary)

Interviews with young Steve Jobs, Steve Wozniak, Bill Gates, Steve Balmer, Larry Ellison, and other IT industry pioneers.

tags: invention, innovation, lunchtalk

Thursday, December 26, 2013

(BN) Robo-Gloves, Meat Hooks Help Ease Human-Machine Teamwork

(Bloomberg ) Robots and humans, for decades kept separate from each other on factory floors, are inching toward integration.

After years of walling off robots to ensure safety, some companies are finding ways to put them alongside people, with lightweight materials and new sensors enabling engineers to build machines that can be employees' partners or even worn on the job.

"Typically we would put up these big gates to keep people and robotics separated," said Scott Whybrew, director for global manufacturing engineering vehicle systems at General Motors Co. (GM) "Human-safe robotics, though, gives us the ability for robots to work side-by-side with the operators."

People-friendly machines hold the potential to propel a global robot market estimated at $8.7 billion in 2012. BMW is testing models that could someday collaborate with workers, while GM is developing its "robo-glove" to give employees a more-muscular grip. Google Inc. (GOOG), with eight acquisitions in the past year, is also signaling its interest in robotics.

Robot-human teams would combine machines' strength and employees' ability to see, feel, touch and think -- qualities impossible or too costly to replicate mechanically. It's a new frontier in automation after mechanization helped boost U.S. factory output by 53 percent in the past two decades even as manufacturing employment tumbled 28 percent.

'Future Scenarios'

"Robots and humans working together are the best of both worlds," said Jose Saenz, research manager for Fraunhofer IFF, a German company that studies factory automation. "How can you have a robot carrying the load while a person guides it? These are future scenarios that we'll be seeing soon."

As robots get safer, cheaper and more petite, smaller companies may be able to take advantage of the technology, according Jeff Burnstein, president of the Association for Advancing Automation trade group in Ann Arbor, Michigan.

"Collaborative robots will open up a lot of eyes," Burnstein said. "There's a huge opportunity there."

In Australia, a meat-industry trade group contracted with automation manufacturer HDT Global to mechanize slaughterhouse processes that required workers to snag carcasses with a hook while slicing off beef chunks as heavy as 50 pounds (23 kilograms). That motion often leads to shoulder strain and severe hand cramping.

Brute Force

HDT Global, whose products span tactical rescue vehicles to robotic prosthetic hands, devised a motor-driven hook mounted on a robot arm that replaces the need for human pulling power to make a clean cut. It was delivered last year.

"What we've definitely proved is that this task does not need to be done by a 6-foot-3 burly Australian guy because the device amplifies the force so much," said Julio Santos-Munne, director of HDT's operations in Evanston, Illinois. "Part of the intent was to be able to have women do this task."

Automation isn't risk-free. Robots have been linked to more than 20 fatal accidents in the U.S., the most recent in 2009, according to U.S. Labor Department's Occupational Safety and Health Administration.

The experience of Intuitive Surgical Inc. (ISRG), the maker of a $1.5 million robot surgery system, also shows that even machines designed to work on a human scale can pose dangers. On Nov. 11, the Sunnyvale, California-based company issued an "urgent medical device recall" to alert doctors that friction in the arms of some units may cause them to stall in surgery.

Bruise Assessment

To help humans do their jobs in proximity to robots, Magdeburg, Germany-based Fraunhofer IFF is studying the force needed for a machine to bruise a worker. Saenz, the research manager, said the idea is to help set a standard for the automation industry, which now relies on safety barriers with automatic power cutoffs to separate robots from people.

Companies from Bayerische Motoren Werke AG (BMW) to Escalette LLC, a small plumbing-fixtures maker in Costa Mesa, California, are experimenting with robots that work alongside humans. Built by Odense, Denmark-based Universal Robots, the machines are safer, take up less space and don't disrupt employees' movements as traditional robots do, said Roland Guhr, manager of assembly technical planning at BMW's South Carolina assembly plant.

BMW is using the collaborative robots in a pilot program to help install glass and apply a foil lining to car doors, jobs with a risk of repetitive-motion injury, Guhr said. While those robots don't yet engage with workers, interactive prototypes may be ready in a few years and reach factories in about a decade.

Next Phase

"The next phase of the pilot will be where the collaborative robots will really work together with the associate," Guhr said.

Google's robotics purchases include Boston Dynamics Inc., a maker of robots for the U.S. Defense Department. That company, based in Waltham, Massachusetts, will be part of a new product area led by Andy Rubin, former head of the Android software unit, Google said in an e-mailed statement.

Software expense is part of the spending that makes the robot market larger than just the devices themselves. When those costs and engineering systems are accounted for, the industry generated $26 billion in sales, according to the Frankfurt-based International Federation of Robotics trade group.

Some machines work so closely with humans that they're worn by the users. That's the case with strap-on exoskeletons from Lockheed Martin Corp. (LMT), the world's largest defense contractor. It's developing the Human Universal Load Carrier, or HULC, for the U.S. military and the Mantis model for industrial use, with a mechanical extension to ease strain on a worker's arm.

Boom Mount

Motorola Solutions Inc. (MSI), the telecommunications-equipment maker, developed a hands-free computer that attaches to a hard hat's lining. Using voice command, the HC1 Headset Computer pulls up video, manuals or e-mail to a boom-mounted, 1-inch (2.5-centimeter) monitor just below a user's line of sight.

A camera can stream video to a command station where a more experienced employee can guide the wearer through complicated tasks, said Nicole Tricoukes, a technology leader for emerging business at Schaumburg, Illinois-based Motorola Solutions.

"We got prodded by our customers and partners to almost provide the holy grail of mobile computing," Tricoukes said.

GM's robo-glove, which is being developed with the National Aeronautics and Space Administration, creates 20 pounds of gripping power with little effort. Resembling a blue ski glove, the device may enable workers to load windows into car doors with less strain, reducing the likelihood of an injury, GM's Whybrew said.

The glove weighs less than two pounds and has a separate battery the size of a hand-drill power pack that a user straps to an arm. It uses sensors to open and shut mechanical actuators in reaction to finger movements.

GM is working with undisclosed third-party companies to commercialize the robo-glove as the next generation of human-robot collaboration, Whybrew said. He envisions a factory floor where machines aid people instead of competing for their work.

"If the robot would bump into you, it would actually say 'Hey excuse me,'" Whybrew said. "It's almost like another person working next to you."

(BN) Merck, Apple, BMW, Google: Intellectual Property

(Bloomberg ) Merck & Co. (MRK) sued Actavis Plc (ACT)'s Warner Chilcott unit seeking to block a generic version of NuvaRing, a contraceptive with annual sales in the hundreds of millions of dollars.

The lawsuit filed in federal court in Delaware accuses Warner Chilcott of attempting to market the generic before the expiration of Whitehouse Station, New Jersey-based Merck's patent in 2018.

Actavis, which has global headquarters in Dublin, said in a statement that it may be the first company to file a new drug application with the U.S. Food and Drug Administration for generic versions of the contraceptive.

NuvaRing is a combined hormonal vaginal contraceptive ring that includes both estrogen and progestin to prevent pregnancy. The product, which was linked in a 2011 FDA report to a higher risk for blood clot complications, had sales of $492 million through the third quarter.

Actavis said Merck's lawsuit would halt final FDA approval of its application for as long as 30 months or until a final resolution in court. If the application is approved, Actavis as a "first applicant" may be entitled to 180 days of generic market exclusivity, the company said in its statement.

The case is Merck Sharp & Dohme BV v. Warner Chilcott Co., U.S. District Court District of Delaware (Wilmington).

E-Cigarette Patent Holder Looks for Infringers on Website

The holder of a patent covering electronic cigarettes has set up a section of a website for people to report possible infringers of a U.S. patent issued to the company in September.

SS Choice LLC said in a statement that "substantial reports" indicate that China is the leading country for the making and promotion of electronic cigarettes that infringe the patent and violate trademarks. The company set up a website, copyright.my7s.com, to collect such reports.

SS Choice, based in Southlake, Texas, said it's ready to have patent-licensing negotiations with companies and suppliers interested in using the technology.

The patent, 8,528,569, was issued Sept. 10, according to the database of the U.S. Patent and Trademark Office. It covers an electronic cigarette with a liquid reservoir. According to the patent, the invention provides an apparatus for increasing the amount of liquid stored in the device, cutting down the need for frequent refills.

SS Choice sells e-cigarettes under the "7's" brand and plans to make private-label products, according to the statement.

The New York City Council approved adding electronic cigarettes to a ban on smoking in offices, restaurants, bars and parks, a move that may be followed by other U.S. cities.

The measure, backed by Mayor Michael Bloomberg, Council Speaker Christine Quinn and Health Commissioner Thomas Farley, passed 43-8 on Dec. 18. The mayor is the founder and majority owner of Bloomberg LP, the parent of Bloomberg News.

E-cigarettes, battery-operated tubes that simulate the effect of smoking by producing nicotine vapor, may be a gateway to smoking regular cigarettes and make quitting harder, Quinn said. The law would take effect in four months, said Jamie McShane, a spokesman for the speaker.

Proponents say e-cigarettes don't produce the toxic and carcinogenic byproducts found in second-hand smoke. Users, who call the practice "vaping," turn to e-cigarettes to wean themselves off regular ones and shouldn't be stigmatized, according to a pro-industry website funded by NJOY Inc. a Scottsdale, Arizona-based e-cigarette maker.

Tobacco industry analysts are watching e-cigarette regulation in New York and potential bans in Chicago and Los Angeles because of the possibility that other cities will follow suit, said Ken Shea, a senior analyst with Bloomberg Industries in Skillman, New Jersey. Such bans may curb e-cigarette sales, estimated next year at $3 billion annually, he said.

Apple-Backed Rockstar Said to Hold Discussions to Sell Patents

A consortium created by Apple Inc. (AAPL), Microsoft Corp. (MSFT) and other technology companies to acquire $4.5 billion of patents from Nortel Networks Corp. in 2011 is holding discussions to sell a portion of those patents, according to people with knowledge of the plans.

The group, called Rockstar Consortium, has recently been in conversations with possible buyers about the patents, said the people, who asked not to be identified because the information isn't public. Rockstar, which also includes BlackBerry Ltd. (BBRY), Ericsson AB (ERICB) and Sony Corp. (6758), has had little success in landing large licensing deals for the patents, three of the people said.

The talks signal a turnabout from 2011, when the patents were highly sought after.

Rockstar has already begun selling some of the patents. In July, intellectual-property company Spherix Inc. said it acquired a suite of patents from Rockstar. Spherix paid an undisclosed amount of cash and $1 million in stock, plus Rockstar will receive a percentage of future profits.

Rockstar executives didn't return repeated requests for comment. Representatives for Apple, Microsoft, Ericsson, BlackBerry and Sony declined to comment or didn't respond to requests for comment.

Ottawa-based Rockstar has operated as an intellectual property licensing company. Its chief executive officer, John Veschi, was previously chief intellectual property officer at Nortel.

Rockstar and its subsidiaries have pursued lawsuits over the patents. In October, Rockstar filed suit against Google, Huawei Investment & Holding Co. and affiliates, Asustek Computer Inc., ZTE Corp., HTC Corp., Samsung Electronics Co., LG Electronics Inc., and Pantech Co. for patent infringement. The patents up for sale don't include the ones involved in the litigation, two people said.

A buyer, or several buyers, could acquire Rockstar's patent portfolio excluding those involved in the lawsuits, two people said. Because Rockstar bought the Nortel patents at a high price and doesn't want to sell them at a loss, the deals could be structured to take advantage of any future financial gain enjoyed by the buyer, the people said.

In response to Rockstar's suit, Google on Dec. 23 filed a countersuit in California against Rockstar asking for a jury trial and a ruling that it doesn't infringe seven patents in question.

"Rockstar's litigation campaign has placed a cloud on Google's Android platform," threatening sales and relationships with customers, according to the complaint, filed in San Jose.


BMW Mark's Use in Irish Mechanic's Website Barred by Court

Bayerische Motoren Werke AG, the maker of BMW automobiles, persuaded an Irish court to bar a County Roscommon mechanic's use of its "BMW" mark on the Internet to promote his business, the Irish Times reported.

Judge Sean Ryan of Ireland's High Court said the mechanic was attempting to trade on the fame of the Munich-based carmaker's name, according to the newspaper.

Edward Ronayne, who was accused of infringement, had argued that his incorporation of "BMW" into his Internet domain name was permitted under a 1997 ruling from the European Court of Justice, the Times reported.

The court disagreed, saying Ronayne's use of the name was part of his attempt to create an identity, something not authorized under the law, the newspaper reported.

Naert & Dubois Sued Over Alleged Use of Search Engine Terms

Naert & Dubois LLC, a law firm on South Carolina's Hilton Head Island, was sued for trademark infringement by a South Carolina real-estate developer.

The complaint, filed in Beaufort, South Carolina, accuses Naert & Dubois and partners Joseph DuBois and Zach Naert of making unauthorized use of the "Coral Resorts," "Coral Reef" "Coral Sands" "Island Links," "Port O'Call" and "Hilton Head Island Development Co." marks.

The firm allegedly uses these terms through various search engines' advertising programs in order to promote their firm, which is focused on the timeshare industry, according to court papers.

Hilton Head Island Development Co. also said the law firm has purchased the names of the developer's general counsel and founder through search-engine advertising programs. The developer said that when people search for any of these terms, a paid advertisement for Naert & Dubois appears, containing a link to the firm's website, www.lowcountrylegal.com.

The law firm has paid for a certain number of "hits" per day through various search engines, and also has paid a premium for its advertisement to appear at the top of or on the first page of search results for anyone seeking to find the development company, according to court papers.

The public is confused by the law firm's actions, the development company said, and is likely to assume falsely that an affiliation exists between the two entities. The aim of the law firm's ad is to influence prospective real-estate customers not to do business with the development company, the developer claims.

The developer asked the court for awards of money damages, including extra damages to punish the law firm for its actions, and attorney fees and litigation costs. The developer also wants a court order terminating the law firm's advertising contracts with the search engine companies, and a ban on further use of its marks.

Naert & DuBois didn't respond immediately to an e-mailed request for comment.

The case is Hilton Head Development Co. v Joseph DuBois, 9:13-cv-03510, U.S. District Court, District of South Carolina (Beaufort).


Authors Guild to Appeal Dismissal of Google Suit

The Authors Guild, which represents writers, said in a Dec. 23 court filing that it plans to appeal the dismissal of an eight-year-old lawsuit against Google Inc.

A federal judge in New York dismissed the case in November, saying the Google Books project, which has scanned more than 20 million books so far, doesn't harm authors or inventors of original works.

The judge's ruling came more than two years after he rejected a proposed $125 million settlement in the case. The Guild sued in 2005, alleging that Google, owner of the world's most popular search engine, infringed copyrights by scanning and indexing books without writers' permission.

The case is Authors Guild v. Google, 1:05-cv-08136, U.S. District Court, Southern District of New York (Manhattan).

Tuesday, December 24, 2013

(BN) Italy Approves ‘Google Tax’ on Internet Companies

(Bloomberg ) Italy's Parliament today passed a new measure on web advertising, the so-called "Google tax," which will require Italian companies to purchase their Internet ads from locally registered companies, instead of from units based in havens such as Ireland, Luxembourg and Bermuda.

The tax has stirred controversy, with some lawyers saying it probably violates European Union laws regarding non-discrimination over commercial activity and could be subject to legal challenges.

In July, at the request of the Group of 20 nations, the Organization for Economic Cooperation and Development proposed a blueprint to fight strategies used by companies such as Google Inc. (GOOG), Apple Inc. and Yahoo! Inc. (YHOO) to shift taxable profits into havens. Italy is the first major European government to pass legislation to combat the problem of moving corporate taxable earnings into havens, which costs Europe and the U.S. over $100 billion a year, since the OECD proposal.

Italy's measure is "fairly obviously contrary to EU law," said Sol Picciotto, an emeritus professor of law at Lancaster University in the U.K. Still, he said the law "will put further pressure on the OECD to sort it out." The OECD isn't scheduled to complete its plan until the end of 2015.

Shifting Profits

Google, Starbucks Corp. (SBUX) and Amazon.com Inc. have been criticized for strategies that shift billions of dollars of profits offshore. Google, for example, says that it sells nearly all its advertising in Europe from an Irish unit, leaving little taxable profits in the countries where its customers are based. That unit in turn pays royalties to a second Irish subsidiary, which says its headquarters are in Bermuda.

Google last year moved nearly $12 billion to the Bermuda unit, the majority of its worldwide income, cutting more than $2 billion off its global income tax bill. Google's Italian unit last year reported total income taxes of just 1.8 million euros, corporate filings show.

Italy's new law is "the wrong answer to the right problem," said Carlo Alberto Carnevale-Maffe, a professor of strategy at Bocconi University's School of Management in Milan. "It's driven by finding excuses for the Italian government's fiscal laziness and fiscal profligacy, and needing new tax revenues. And the second thing is to protect the interest of traditional publishers."

Web Advertisers

An earlier version of the Italian measure also applied to goods purchased online. It was scaled back after Matteo Renzi, the new leader of Prime Minister Enrico Letta's Democratic party, said it should be scrapped.

The law will require advertisers to purchase web ads from an Italian company, rather than from one in a more tax-favorable jurisdiction. This restriction could run afoul of EU laws giving European companies freedom to buy and sell across borders regardless of where the corporation is established.

"At first glance, we would have doubts about the amendment as it now stands, as it appears to go against the fundamental freedoms and principles of non-discrimination," said Emer Traynor, a spokeswoman for the European Commission on tax issues. "We'd encourage the Italian government to ensure any new legislative measures they adopt are fully compatible with EU law."

Letta said Dec. 20 that his government will coordinate with the European Union on the Italian tax measure.

(BN) Apple-Backed Rockstar Said to Be in Talks to Sell Patents

(Bloomberg ) A consortium created by Apple Inc. (AAPL), Microsoft Corp. and other technology companies to acquire $4.5 billion of patents from Nortel Networks Corp. in 2011 is holding discussions to sell a portion of those patents, according to people with knowledge of the plans.

The group, called Rockstar Consortium, has recently been in conversations with possible buyers about the patents, said the people, who asked not to be identified because the information isn't public. Rockstar, which also includes BlackBerry Ltd. (BBRY), Ericsson AB and Sony Corp., has had little success in landing large licensing deals for the patents, three of the people said.

The talks signal a turnabout from 2011, when the patents were highly sought after. Apple and its bidding partners trumped an offer from Google Inc. for the patents. The deal, approved in 2012, gave the consortium access to about 4,000 patents and applications in areas including the Internet and chips from a company that was once North America's largest phone-equipment maker.

Rockstar has already begun selling some of the patents. In July, intellectual-property company Spherix Inc. said it acquired a suite of patents from Rockstar. Spherix paid an undisclosed amount of cash and $1 million in stock, plus Rockstar will receive a percentage of future profits.

Rockstar executives didn't return repeated requests for comment. Representatives for Apple, Microsoft, Ericsson, BlackBerry and Sony declined to comment or didn't respond to requests for comment.

Patent Lawsuits

Ottawa-based Rockstar has operated as an intellectual property licensing company. Its chief executive officer, John Veschi, was previously chief intellectual property officer at Nortel. Rockstar has subsidiaries, including one called Bockstar.

Rockstar and its subsidiaries have pursued lawsuits over the patents. In October, Rockstar filed suit against Google, Huawei Investment & Holding Co. and affiliates, Asustek Computer Inc., ZTE Corp., HTC Corp., Samsung Electronics Co., LG Electronics Inc., and Pantech Co. for patent infringement. The patents up for sale don't include the ones involved in the litigation, two people said.

A buyer, or several buyers, could acquire Rockstar's patent portfolio excluding those involved in the lawsuits, two people said. Because Rockstar bought the Nortel patents at a high price and doesn't want to sell them at a loss, the deals could be structured to take advantage of any future financial gain enjoyed by the buyer, the people said.

Another scenario would involve a third party joining the consortium to dilute existing investors, without involving a sale of particular patents, said one of the people.

Saturday, December 21, 2013

Lab Notebook: Steve Jobs and the sense of an innovation opportunity

In "Conceptual Spaces: The Geometry of Thought" Peter Gardenfors writes:

The spatial dimensions height, width, and depth as well as brightness are perceived by the visual sensory system, pitch by the auditory system, temperature by thermal sensors and weight, finally, by the kinaesthetic sensors.
... however, there is also a wealth of quality dimensions that are of an abstract non-sensory character. (Section 1.3.)

Somehow — probably because I believe innovation creates new domains and dimensions — my mind associates the phrase above with John Markoff's remark about Steve Jobs that he seemed to have a keen sense for big innovation opportunities. Maybe it was something like synesthesia, an ability to sense multiple dimensions where most of people perceive it as one.

Lab Notebook: Google Glass and 360-degree vision

Google Glass (or a similar connected, hands-off presentation device) should make a big difference in situations that require body-eye coordination and [related] learning of psycho-motor skills. For example, if I wear sensory clothing that talks to the device I should be able to see myself from any angle. The device might also provide an 3- or 4-D image of the desired position and help me adjust my posture closer to the ideal. Boys and girls would learn easily how to keep their backs straight and walk like models! :) Should also help the elderly to be aware of the need to exercise and improve their motor skills.
Eventually, it will become indispensable in sports, wellness, and all other applications requiring spatial dexterity, including surgical procedures.

In general, great innovations create new space and time (either real or virtual). The Google Glass (GG) project has a chance to do just that. In system terms (see Scalable Innovation, Chapter 2),

GG - Tool
sensor network - Source
reference db - Source
(wireless) communications  - Distribution
application - Control
brain - Control
encoded position info - Packaged Payload

tags: invention, space, time, problem, solution, innovation, pattern, system

Lab Notebook: Silicon Valley and the Law of Diminishing Marginal Utility

Silicon Valley seems to defy one of the fundamental laws of economics: The Law of Diminishing Marginal Utility. The law, according to an investopedia article (need to find a textbook reference), says:

A law of economics stating that as a person increases consumption of a product - while keeping consumption of other products constant - there is a decline in the marginal utility that person derives from consuming each additional unit of that product.

They illustrate the law with a short video about a hungry girl with a pizza. The first slice of pizza tastes better than anything before.

The second slice of pizza still tastes good, but by the fifth piece, the girl is already full and she hates the fact that she has to eat the entire thing.

Let's try to apply this law to a major Silicon Valley innovation: web-based email. We skip the Hotmail vs Rocketmail controversy and go directly to the Yahoo vs Google email rivalry. In the early 2000s, Yahoo mail was an undisputed leader in this web services domain. The company was giving users 10 or 20 MB storage for free and charged for extra. Then came Google and offered at least 1GB of free storage with its brand new gMail. According to the law of diminishing marginal utility, this move would be "unlawful." That is, why offer people a lot more if we know from economics that usefulness declines with quantity of goods consumed?

Paradoxically, the more storage gmail offered, the more useful its service proved to be to the users, myself included. Millions flocked to gmail, abandoning their yahoo mailboxes.

In general, exponential growth in processing power, storage, and bandwidth (what I call "Machine 1") that Silicon Companies have been driving for the last 50 years makes users happier, defying the economics textbook wisdom taken at face value.

tags: machine1, economics, 10X, innovation, book, google, yahoo

Lunch Talk: Inventions that shook the world (1930s) Discovery.

Featured Inventions: Helicopter, Xerography, Parking Meter, Walkie Talkie, Electric Guitar

Note the Cinderella story about the Xerox invention: at least 20 companies rejected the idea. 33min20sec.

Lab Notebook: NSA, Google, cookies

In Scalable Innovation (Chapter 5. System Control Points: Where to Aim the Silver Bullets), we introduce the concept of aboutness and use the example of web cookies to explain how it helps solve detection problems. In the second edition of the book, we should illustrate the concept with the recent revelation that NSA uses Google cookies to identify targets for hacking. This is exactly the use our system model predicts.

The National Security Agency is secretly piggybacking on the tools that enable Internet advertisers to track consumers, using "cookies" and location data to pinpoint targets for government hacking and to bolster surveillance.
The agency's internal presentation slides, provided by former NSA contractor Edward Snowden, show that when companies follow consumers on the Internet to better serve them advertising, the technique opens the door for similar tracking by the government. The slides also suggest that the agency is using these tracking techniques to help identify targets for offensive hacking operations. (Source: Washington Post, December 10, 2013).

tags: detection, control, system, model, example

Lab Notebook: Why money technology works

5 goats = 1 cow
12 eggs = 4 loafs of bread
1 gun = 2 horses
1 goat = 20 loafs of bread
1 horse = 3 goats

All these barter equations carry enormous amount of information about goods involved in the exchange and rules to calculate their "aboutness," including expectations about the future (weather, hunger, wisdom of the ruling king, etc.) The more goods, services, and experiences (GSE) are available, the more information is necessary to make calculations and decisions whether to transfer the GSEs into one's future.
When instead of the barter equations we use money, we compress huge amounts of GSE aboutness into a single number. That is, from an innovation perspective, money and markets are compression mechanisms. The compress payloads, so that we can increase the GSE space exponentially.

Thousands years ago, Spartans used heavy metal bars to represent value. You couldn't carry it; only mark up one's ownership of a "slice" of iron.
Today, we use hard drives of financial institutions to accomplish the same task. Except, using computer technology and market mechanisms, we managed to compress our expectations about the past, present, and future of a myriad of GSEs in a bunch of zeros and ones.

5 goats = 0000010000
12 eggs = 0000001010
1 gun = 0001010010

The amazing aspect of this mechanism is that money and markets allow us to decompress a single number into all kinds of GSEs - pure magic.
tags: invention, innovation, money, technology, book, tool, control, deontic, payload, aboutness

Friday, December 20, 2013

(BN) Most innovative states

(Bloomberg ) 

Microsoft, Amazon Propel Washington to Most Innovative State

The most innovative state in the U.S. isn't California, home of Google Inc. (GOOG) and Stanford University, according to data compiled by Bloomberg. It's Washington, where Microsoft Corp. (MSFT) and Amazon.com Inc. are based.

California came in second and Massachusetts third in the ranking, which looked at criteria such as the percentage of professionals in science, technology, engineering and mathematics, and the number of patents and public technology companies in each state.

Washington, known for rainy Seattle, abundant greenery and fleece-clad citizens, had the highest total score, not by topping any of the categories -- California is highest in patent activity and five states have more skilled workers -- but by placing near the top. That's due to the large technology workforce, high productivity rates and plethora of public companies in aerospace, biotechnology and computer technology.

Technology enterprises make up 21 percent of Washington's public companies, according to the ranking, while they comprise 29 percent in California and Massachusetts.

The state's strong engineering roots go back to Boeing Co. (BA), the airplane maker that was based in Seattle until 2001 and still has extensive manufacturing operations in the Puget Sound area. The company attracted not just employees but also suppliers to the area, said Ed Lazowska, who holds the Bill and Melinda Gates chair in computer science and engineering at the University of Washington in Seattle.

Microsoft's 1979 move to the suburbs of Seattle from Albuquerque, New Mexico, attracted computer engineers throughout the 1980s and 1990s, as did other area companies such as Aldus Corp., the maker of publishing-software PageMaker. Nintendo Co. (7974) chose Redmond, Washington, as its U.S. headquarters, pulling in game developers, Lazowska said.

Former employees of these companies have gone on to found local startups in and around Seattle. The availability of top engineers has attracted technology firms such as Google, Facebook Inc. (FB) and Salesforce.com Inc. (CRM), which have set up large offices in the area.

Washington state "arguably owns the cloud," said Lazowska, referring to computing services delivered via the Web that are offered by companies such as Amazon and Microsoft. The area also boasts a strong presence in segments such as data analytics and storage.

(BN) Samsung, Apple, Coca-Cola, WWE: Intellectual Property

(Bloomberg ) Samsung Electronics Co. (005930), Apple Inc.'s rival in the smartphone market, is seeking U.S. patent protection for a mobile device with dual screens.

Application 20130314338, published in the database of the U.S. Patent and Trademark Office on Nov. 18, covers a dual display apparatus and the method of its operation.

According to the application, the technology would make it possible for a user to see a second display, either through the first, or on a surface opposite to the first. This would enable a user to conduct two simultaneous operations, such as playing a game and holding a face-to-face conversation with another user.

The South Korean electronics company filed the application for this patent in May 2012.


Apple Reaches Accord With Kodak Over 'Retina' Mark in Russia

Apple Inc. (AAPL) and Kodak GmbH reached an agreement over use of the "Retina" trademark in Russia, the Russian legal information agency RAPSI reported.

The Moscow Commercial Court approved the settlement, according to RAPSI. Initially, Apple had sought cancellation of Kodak's "Retina" mark, according to the news service.

Under terms of agreement, Apple will use the mark with display devices supplied by LG Display and Samsung Electronics Co. in its products, while Kodak will be limited to using the mark with its own products, RAPSI reported.

Frucor Doesn't Infringe Coca-Cola Trademarks, NZ Court Rules

Frucor Beverages Ltd., a New Zealand producer of soft drinks, bested the Coca-Cola Co. (KO) in a battle over bottle shape, the New Zealand Herald reported.

Coca-Cola had claimed that Frucor was infringing its trademark by bottling PepsiCo Inc. (PEP) products in bottles the U.S. company claimed resembled the shape of the Coca-Cola bottles, according to the newspaper.

New Zealand's high court agreed with Frucor that the bottles were sufficiently different and, in each case, clearly marked with Pepsi's brands, the newspaper reported.

The court also said it took Coca-Cola almost a year after the bottles' introduction to complain about their shape and hadn't filed infringement actions in any other country where beverages packaged in that particular bottle shape were sold, according to the Herald.

WWE's 'Second City Punk' Mark Opposed by Chicago Comedy Club

Second City Inc., operators of the Chicago comedy club, have until March 26 to file papers in opposition to World Wrestling Entertainment Inc. (WWE)'s "Second City Saint" trademark application, according to the database of the U.S. Patent and Trademark Office.

WWE, based in Stamford, Connecticut, filed an application July 19 to register the term for use with entertainment services focused on wrestling. Its performer CM Punk once wrestled as a member of the Second City Punk team.

Second City is where many well-known comedians once performed in early stages of their career, including Gilda Radner, John Belushi, Joan Rivers, Peter Boyle, Bill Murray, Dan Aykroyd and Stephen Colbert.


Boundless Dispute With Textbook Publishers Nears Settlement

Boundless Learning Inc., a Boston-based online education company, is near settlement of a copyright suit brought by three publishers of college textbooks, according to a Dec. 16 court filing.

Pearson Plc (PSON)'s Person Education unit, Cengage Learning Inc. and Verlagsgruppe Georg von Holtzbrinck GmbH's MacMillan Higher Education unit sued Boundless in federal court in New York in March 2012, complaining that the company's educational material infringed their copyrights.

In their complaint, the publishers said Boundless "replacement textbooks" copied the "distinctive selection, arrangement and presentation" of their own books, along with "other original text, imagery and protected expression" of the publishers and their authors. The publishers said Boundless gets "an F in originality."

They asked the court for awards of money damages, attorney fees and litigation costs, and for an order barring further infringement of their works.

Arial Diaz, founder of Boundless, said in a Dec. 17 blog posting that there is a confidential settlement in the case, in addition to a public judgment and court order. He said the company now has a "clear path" for building and marketing its textbook alternatives, "without treading on" the publishers' rights.

Plaintiffs lawyers said in a Dec. 16 court filing that they are reviewing draft settlement papers. They have requested a status conference on Jan. 3.

The case is Pearson Education Inc. v. Boundless Learning Inc., 1:12-cv-01986, U.S. District Court, Southern District of New York (Manhattan).

Thursday, December 19, 2013

Lunch Talk: Inventions that shook the world (1920s) Discovery

Featured Inventions: Television, Rocket, Sound Film, Lie Detector, Einstein's Refrigerator

Lab Notebook: an illustration to Machines 1 & 2 concepts

Two Silicon Valley companies merge, citing the need to build computing capabilities (Machine 1 is a bottleneck for Machine 2):

Rosati [the CEO of the merged company] added, “If we are to become the workplace for the world, we need to make massive investments in technology, massive investments in data science, massive investments in predictable business outcomes. Fundamentally, we have a shot at building a business on the scale of Amazon or LinkedIn or iTunes.” (ref: Gannes, Liz. oDesk and Elance Merge to Create One Big Freelancer Company. All Things D, December 18, 2013.)

I can use this example in explaining Machines 1&2 in the Greatest Innovations of Silicon Valley course/book.

tags: tgisv, book, example, machine1, machine2

Lab Notebook: an example to illustrate Invention vs Innovation and 10X

This example can be added to the 2nd edition of Scalable Innovation or elsewhere:

So he [Steve Jobs] explains it, and he says, ‘You know, [the Xerox mouse] is a mouse that cost three hundred dollars to build and it breaks within two weeks. Here’s your design spec: Our mouse needs to be manufacturable for less than fifteen bucks. It needs to not fail for a couple of years, and I want to be able to use it on Formica and my bluejeans.’ (ref: Gladwell, M. Creation Myth. The New Yorker, May 16, 2011).

The Xerox mouse was an invention with an innovation potential. Steve Jobs was able to organize an effort to realize the potential, i.e. create the innovation. Xerox just couldn't do it at all (see the failed Alto attempt).

Source: Scalable Innovation. Fig P.4.

Also, note Jobs' exponential (10X) thinking: from two weeks to two years; from special pads to common surfaces.

tags: creativity, innovation, invention, 10X, example

Wednesday, December 18, 2013

Vitamins is a $28B+ placebo industry

Based on multiple medical studies, Annals of Internal Medicine declares the multivitamin industry a fraud:

...we believe that the case is closed— supplementing the diet of well-nourished adults with (most) mineral or vitamin supplements has no clear benefit and might even be harmful. These vitamins should not be used for chronic disease prevention. Enough is enough.

Despite sobering evidence of no benefit or possible harm, use of multivitamin supplements increased among U.S. adults from 30% between 1988 to 1994 to 39% between 2003 to 2006, while overall use of dietary supplements increased from 42% to 53% (9). Longitudinal and secular trends show a steady increase in multivitamin supplement use and a decline in use of some individual supplements, such as β-carotene and vitamin E. The decline in use of β-carotene and vitamin E supplements followed reports of adverse outcomes in lung cancer and all-cause mortality, respectively. In contrast, sales of multivitamins and other supplements have not been affected by major studies with null results, and the U.S. supplement industry continues to grow, reaching $28 billion in annual sales in 2010. Similar trends have been observed in the United Kingdom and in other European countries.

The key notion here is "well-nourished." Since people don't know whether they are well-nourished or not, taking vitamins solves an important problem: it simplifies our efforts to find and stick to the right diet. That is, instead of a complex task to select the right food, we can simply take a vitamin pill to make sure we (our children, parents, and pets) get "the right" nourishment.

When food supplies were scares and of low quality supplementing it with vitamins and minerals was a great innovation. As the food industry caught up with the trend, the need for the supplements disappeared, but the perception of the need did not.

Moreover, the trend spread to pets! When we got our dog, the breeder recommended a whole range of dietary supplements from vitamins to "grass" tablets. Needless to say, that dogs don't need any of that stuff because they, unlike humans and monkeys, produce most vitamins internally. Despite being useless, pet food supplements are extremely popular and profitable. And they serve the same purpose as supplements for humans - generate a placebo effect.

I wonder, when a similar "enough is enough" article is going to be published about organic foods.

tags: control, industry, trend, science, biology, business

(BN) Facebook Starts Testing Video Advertisements in News Feed

(Bloomberg ) Facebook Inc. (FB) is testing video advertisements that automatically play in users' news feeds, seeking to catch up with other websites offering short commercials online.

The first promotions are starting to run this week, the company said in a statement today. One of the first clips will be a trailer for the Lions Gate Entertainment Corp. (LGF) film "Divergent," video posted on Facebook's website shows.

The world's largest social-networking service plans to offer 15-second spots, two people familiar with the plans said in July. While the company already allows advertisers to upload videos to their Facebook page and then broadcast them to a user's news feed, the new service would let marketers buy their way directly into a person's feed, according to the people.

"Facebook is focusing on trying to get parity with what other websites offer," said Nate Elliott, an analyst at Forrester Research Inc. in Cambridge, Massachusetts. "If we're just talking about 15-second auto-start video ads, YouTube has been offering them for five years now. Yahoo has been offering them for a decade."

The move follows efforts by Facebook's rivals to capture ad dollars that have traditionally gone to TV networks. Google Inc. (GOOG) began funding original content channels on its YouTube video-sharing website in recent years, giving it a more curated venue for commercials.

Delayed Start

AOL Inc. operates HuffPost Live, a CNN-like video stream running five days a week. Marketers are expected to spend $3.6 billion on online video ads this year, according to Forrester Research.

"We'll continue to refine this new way for brands to tell stories on Facebook to ensure the best experience for people and marketers," Facebook said in the statement.

Facebook members won't see a commercial more than three times in a given day, the people said. Depending on how large an audience an advertiser plans to reach, the ads will range in price from $1 million to about $2.5 million a day, according to the people.

Chief Executive Officer Mark Zuckerberg pushed back the start date for the video ads at least twice, wanting to make sure Facebook's user experience won't be tainted by the ads, according to the people. Zuckerberg wants high-definition video and easy-to-use playback features, the people said.

Facebook's move also would step up competition with social-networking rival Twitter Inc. (TWTR), which has been courting TV advertisers in its bid to reach $1 billion in sales by 2014. Twitter is known for its in-the-moment conversations.

Adding SportStream

Facebook today also acquired SportStream, a San Francisco-based company that will allow the social network to display real-time sports data -- another way it can compete with Twitter. The acquisition will improve how Facebook can interact with its partners that provide content, the company said in a blog post.

Silicon Valley companies have had difficulty luring away ad dollars from television networks because of a lack of a single measurement system that compares TV audiences directly to Internet audiences. Figures from measurement companies such as ComScore Inc. are difficult to compare against ratings from Nielsen, the dominant firm for measuring TV ratings.

== 1. an interesting problem: how to value online vide ads 

2. transition to a stream-based system


(BN) Viagra, Apple, KBC Groep, Huawei: Intellectual Property

(Bloomberg ) Generic Viagra will hit the market more than two years earlier than expected under a settlement reached by Teva Pharmaceutical Industries Ltd. (TEVA) and Pfizer Inc. (PFE), the maker of the impotence drug.

Teva can enter the market on Dec. 11, 2017, and will pay patent royalties through the expiration of the Viagra patent in April 2020, New York-based Pfizer said in a statement. Other terms weren't disclosed.

Viagra, whose chemical name is sildenafil citrate, is one of Pfizer's best-known medicines. The drug generated sales of $2.05 billion in 2012, its best year ever. Pfizer earlier this year began selling the blue pill through a company-sponsored website to combat counterfeit versions sold online.

The medicine came from a group of compounds considered during research to treat high blood pressure and angina. The assistance with erectile dysfunction was a side effect discovered during testing, and patent 6,469,012, issued in 2002, is for use of the compound to treat impotence.

Some aspects of the patent were earlier rejected in 2010 because it was similar to a Chinese herb known as Horny Goat Weed. Teva, based in Petach Tikva, Israel, lost its bid to invalidate the rest of the patent at trial and was appealing the case. The U.S. Court of Appeals for the Federal Circuit dismissed the appeals yesterday.

Apple Fails to Prevent 'DriPhone' Registration in New Zealand

Apple Inc. (AAPL), maker of the iPhone and the iPod, lost a New Zealand trademark fight with a maker of waterproof cases for mobile phones, the New Zealand Herald reported.

The Cupertino, California-based company opposed an application by DriPhone, of Hamilton, New Zealand, to register its company name as a trademark, according to the newspaper.

Apple claimed that the public would be confused and assume, falsely, that the California company was the source of products with the DriPhone name, according to the Herald.

Hayden Crowther, director of DriPhone, argued successfully that the trademark is readily distinguishable from Apple's iPhone mark, and was awarded NZ$2,950 ($2,437), the Herald reported.

KBC Wins Authorization to Use 'Kinnitty Castle' Irish Trademark

KBC Groep NV (KBC), the biggest bank in Belgium, will be able to use the Kinnitty Castle trademark for a hotel in Ireland's County Offaly, Ireland's High Court ruled, according to the Irish Times.

Cornelius Ryan, the hotel's owner, claimed that he owned the mark and originated the identity of the castle hotel, which is being operated by a bank-appointed received, the newspaper reported.

KBC appointed a receiver in 2008 and claims that Ryan owes 5 million euros ($6.89 million) on the property, according to the Times.

The court rejected Ryan's request for an order barring the receiver and KBC from continuing to call the hotel property Kinnitty Castle, the Times reported.

Huawei Seeks to Register 'PhoPad' as Trademark for Mobile Phones

Huawei Technologies Co., China's largest maker of phone network equipment, applied to register "PhoPad" as a trademark, according to the database of the U.S. Patent and Trademark office.

The company, which is waging a patent fight with Interdigital Inc. over mobile-phone technology, said it will use the mark with mobile phones, tablet computers and protective cases for phones and tablets.

The Shenzen, China-based company filed its application Dec. 2.


Chevron Accuses Ecuador of Misusing Copyright as Censorship

Chevron Corp. (CVX), the oil company being sued by Ecuadorean farmers over alleged environmental damage near oil wells in the Amazon rain forest, said the government of Ecuador is misusing copyright law to censor the company's videos on Google Inc.'s YouTube video-sharing website.

In a posting on Chevron's Amazon Post blog, the company said that its videos are presently down following copyright claims made by Ares Rights of Spain.

Chevron claims that Ares Rights is working on behalf of the government of Ecuador to censor negative messages and video content.

"When material placed on the Internet is perceived to be anti-government, Ares sends a letter to sites like YouTube, Google Scribd and Vimeo claiming it affects copyrights of one of its clients in an attempt to get the material removed by the hosting site," Chevron said on the blog.

The San Ramon, California-based oil company said copyrights for the content that is allegedly infringed by its videos doesn't belong to the clients on whose behalf Ares Rights is making the claim.

El Comercio and El Universo -- news outlets in Ecuador -- have raised questions about Ares Rights' possible role in censoring Internet content, according to the posting.

The Court of Appeal for Ontario ruled yesterday that the 47 villagers have the right to pursue Chevron's Canada assets. It reverses a ruling made on May 1 that stated the company didn't have any assets in Canada.

A court in Ecuador in 2011 found the company liable for about three decades of soil and water pollution near oil wells that ruined the health and livelihoods of Amazon rain forest dwellers. Since then, Ecuadorean farmers and fishermen have been trying to collect $19 billion in environmental damages from Chevron.

The Canadian judges said in the ruling that a Chevron spokesman had said: "We're going to fight this until hell freezes over. And then we'll fight it out on the ice."

Chevron's wish is granted, the judges said.

"After all these years, the Ecuadorean plaintiffs deserve to have recognition and enforcement of the Ecuadorean judgment heard on the merits in an appropriate jurisdiction. At this juncture, Ontario is that jurisdiction," according to the ruling.

Chevron has said it will appeal the decision.

The case is Yaiguaje v. Chevron Corp., C57019, Court of Appeal for Ontario (Toronto)

Trade Secrets/Industrial Espionage

VIA Says It Filed Trade-Secrets Suit in Taiwan Against Asustek

VIA Technologies Inc. (2388), a Taiwanese maker of chipsets for computer motherboards, said it filed a lawsuit in Taipei District Court seeking more than $138 million in damages from Taipei-based Asustek Computer Inc. (2357)

The suit followed a decision by the Taiwan prosecutor to file criminal trade secret charges against Asustek's Asmedia Technology unit and four of its employees, according to a company statement.

A former VIA employee left in 2007 to join Asmedia, taking VIA employees and intellectual property related to USB technology, according to the complaint.

Monday, December 16, 2013

Nobel Prize in Economics: Using models to make sense of models.

Lars Peter Hansen shared 2013 "Nobel Prize" in Economics for his work on models. Below are several slides from his Nobel Prize Lecture. Since I study innovation-related hype, the second slide, which shows how to model distorted beliefs, is quite interesting. Maybe we can use this approach to understand why Gartner Hype Cycle keeps showing up in innovation processes.

tags: science, economics, hype, model

Lunch Talk: Inventions that shook the world (1910s) - Discovery

Featured Inventions: Parachute, Gas Mask, Toaster, Tommy Gun, Sonar

Cognitive vs Noncognitive skills: employment impact

A brief quote from an NBER paper:

.. we find that noncognitive ability has a higher return than cognitive ability for unskilled workers and managers while skilled workers and non-managerial positions face a higher return on cognitive than to noncognitive ability.

Noncognitive traits are common to successful highly-paid managers and low-paid workers. This might explain a certain disdain highly-paid engineers show toward marketing and manager types.

tags: education, psychology, economics

2013 Patent Litigation costs

Just a few data points for future reference:

According to the American Intellectual Property Law Association (AIPLA), in 2013 typical patent litigation costs were as follows:

Source: AIPLA 2013 Report of the Economic Survey

Surprisingly, the costs stayed close to 2005 levels:

Source: The Entrepreneur's Guide to Law. 3rd ed.

The textbook mentions that "Intellectual property represents approximately 70% of an average firm’s value."

tags: patents, law, economics