Saturday, February 15, 2014

Invention of the Day: High-Speed Roller-Coaster

Inventor and entrepreneur J.A. Miller (Mueller) started working on roller coaster designs and implementations in 1893, when he was just 19. During his entire career, he kept creating installations that provided greater and greater thrills to the riding public. At a certain point, he hit a problem: the more exciting the curves of the coaster are, the less safe the roller coaster becomes for the riders. On vertical curves especially, the more abrupt the turn, the greater the chances that the ride will fly off the rails, injuring or even killing the thrill-seekers.
Here's how the inventor describes his challenge:

...vertical curves on pleasure railway structures have been limited on account of centrifugal force, the curves being` confined within limits which will permit gravity to overcome centrifugal force sufficiently to keep the cars on the rails and the passengers in their seats. More abrupt vertical curves will be more sensational as it will give the passengers the feeling of being lifted off their seats as the cars take the incline.

It seems like the only way to provide for user safety is to reduce the acceleration on the curve and the thrill, which would be a typical trade-off. As with many other breakthrough inventions, Miller found a solution that allowed a roller-coaster designer to escape the trade-off: the car would stay on a sharp vertical curve, held on the rails with three pairs of wheels: two vertical and one horizontal.

Before the Miller's solution, the force of gravity was not strong enough to hold the car in place when it accelerated along sharp curves, either vertical or horizontal. After the new side and bottom rollers were introduced, the car would stay on rails, compensating for centrifugal acceleration. Today, many roller-coasters use the 90 year-old solution to give the riders as much fun as they can bear.

tags: invention, trade-off, solution, problem

Friday, February 14, 2014

(BN) Honeywell, Budweiser, VKontakte: Intellectual Property

(Bloomberg ) A verdict finding Honeywell International Inc. (HON) didn't infringe a Solvay SA (SOLB) patent covering a technology to replace ozone-depleting chlorofluorocarbon refrigerants was upheld by a federal appeals court.

In September 2011, a jury in Delaware found that Morris Township, New Jersey-based Honeywell didn't infringe Solvay SA's patent 6,730,817. Honeywell argued that Russian inventors came up with the idea first and worked with Honeywell before Solvay sought its patent.

The case is Solvay SA v. Honeywell International, U.S. Court of Appeals for the Federal Circuit. The lower court case is Solvay SA v. Honeywell International Inc., 1:06-cv-00557, U.S. District Court, District of Delaware.

Korean Scientist, Once Disgraced, Receives U.S. Stem-Cell Patent

Hwang Woo-suk, the South Korean scientist who lost his post at Seoul National University after it was found he faked some of his research results, was awarded U.S. patent 8,647,872 Feb. 11, which was based on his research, Korea's Arirang News reported.

The patent covers the NT-1 embryonic stem cell line, created by transferring a human cell into a female egg, according to Arirang News.

Experts say the granting of the patent doesn't mean the process has been proved scientifically, Arirang News reported.


Lush Seeks U.K. Toiletries Mark Using Amazon Official's Name

Lush Retail Ltd., the U.K.-based cosmetics company, registered the name of an Inc. (AMZN) official as a trademark for toiletries after winning a dispute with the online retail giant, RetailWeek reported

Last week a U.K. court sided with Lush on its claims that Seattle-based Amazon diverted customers looking for its products to other company's products, according to Retail Week.

Lush registered the name "Christopher North" for perfumes and related items with the U.K.'s Intellectual Property Office, RetailWeek reported. North heads Amazon's U.K. operations, the trade publication said.

Anheuser-Busch's Canadian Unit Accused of 'Ambush Marketing'

Anheuser-Busch InBev NV (ABI)'s Labatt Brewing unit was accused of "ambush marketing" by the Canadian Olympic Committee, Toronto's Globe & Mail newspaper reported.

The committee said the brewer's advertising campaign in Canada for Budweiser, featuring scenes of Moscow and a Budweiser "Red Light" blimp designed to look like a hockey goal light, create a false association with the Sochi Olympics, the newspaper said.

A Labatt spokesman told the newspaper that the Budweiser Red Light isn't related to any one league or event.

The Canadian Olympic Committee's official beer sponsor in Canada is Molson Coors Brewing Co. (TAP), the Globe & Mail Reported.

Disney Sued by Stuffed-Animal Company Over 'Toy Story' Character

A Walt Disney Co. (DIS) unit was sued for trademark infringement by a New Jersey maker of stuffed animals over a bear featured in the film studio's "Toy Story 3."

Diece-Lisa Industries Inc. said in a complaint filed Feb 10 in federal court in Texas that the "Lots-O'-Huggin'" character in the 2010 film infringes trademarks for its "Lots of Hugs" bears.

The New Jersey company asked the court to award it Disney's profits related to the alleged infringement, as well as attorney fees and litigation costs. Diece-Lisa also asked for an order barring Burbank, California-based Disney from using "Lots-O'- Huggin'" or "Lotso" marks or characters.

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

The case is Diece-Lisa Industries Inc. v. Disney Enterprises Inc., 14-cv-00070, U.S. District Court, Eastern District of Texas (Marshall).


VKontakte Named 'Notorious Market' by U.S. Trade Representative

VKontakte, the Russian social-media website, is one of 22 entities on a list of "notorious markets" compiled by the Office of the U.S. Trade Representative.

The list identifies companies that enable copyright infringement and trademark piracy on a commercial scale, causing "significant financial losses for rights holders," the U.S. Trade Representative said in a report yesterday.

The Russian social media company has a business model that "appears to include enabling the unauthorized reproduction and distribution, including streaming, of music and other content," according to the report.

Wednesday, February 12, 2014

Lunch Talk: Happiness is a precursor to success.

Shawn Achor visits Google to discuss his most recent book, Before Happiness. In his last book, Shawn described why happiness is the precursor to success. Here, Shawn explains that before we can be happy or successful, we need to first develop the ability to see that positive change is possible.

About the Author: Shawn Achor is an American educator, author, and speaker known for his advocacy of positive psychology. He is best known for his research reversing the formula of success leading to happiness—his research shows that happiness in fact leads to success.

tags: lunchtalk, psychology

Tuesday, February 11, 2014

(BN) ARM Royalty Growth Slows as Cheap Smartphones Take Over

(Bloomberg ) ARM Holdings Plc (ARM), the semiconductor designer whose products power Apple Inc.'s iPhone and iPad, reported slower growth in royalty revenues in the fourth quarter as the market for high-end smartphones cooled.

Royalty revenue rose 7 percent to $146.4 million, the Cambridge, England-based company said in a statement. That's compared to 13 percent growth in the third quarter and a 19 percent increase a year earlier.

ARM's royalties are being hurt by a slowdown in sales of high-end smartphones as the market moves toward cheaper models. The company, whose designs are used in more than 95 percent of mobile phones, is branching out into chips that will run servers and connected devices, such as smartwatches.

(BN) Apple, Victoria’s Secret, Olympics: Intellectual Property

(Bloomberg ) Apple Inc. (AAPL)'s chances of defeating a 1.57 billion-euro ($2.2 billion) lawsuit in Germany depend on whether an IPCom GmbH patent protects a technology using one or three bits for coding software used in wireless networks.

IPCom will win only if it convinces the court the patent isn't limited to technology using just one bit for coding information, Presiding Judge Holger Kircher said yesterday at a hearing in Mannheim, Germany.

The case is LG Mannheim, 2 O 52/12.


Overstock Overreached in Trademark Complaint, NoMoreRack Claims Inc. (OSTK), an online discount retailer, overreached when it accused competitor Inc. of trademark infringement, said in a court filing.

Overstock sued New York-based NoMoreRack in federal court in Utah in December 2013, saying its use of "overstock" in Internet ads constituted trademark infringement.

NoMoreRack said in an answer to the complaint that its use of the term was innocent and in good faith, and that Salt Lake City-based Overstock waited too long to bring a claim.

A pretrial conference is set for March 12.

The case is Inc. v. Inc., 2:13-cv-01095, U.S. District Court, District of Utah.

Victoria's Secret Seeks to Cancel 'The Pink Store' Mark

L Brands Inc. (LB)'s Victoria's Secret unit asked the U.S. Patent and Trademark Office to cancel the registration of a mark belonging to a Nebraska retail store.

Victoria's Secret is objecting to "The Pink Store," a trademark registered to a Nebraska resident in May 2013. The lingerie chain claimed the phrase might cause confusion with its trademarks that use the word "pink."


Almost Amish Claims It Owns 'Light in The Valley' Quilt Pattern

Almost Amish, a shop in Lampeter, Pennsylvania, that sells goods made by members of the Amish community, sent cease-and-desist letters to shops telling them they can't sell quilts made to one particular design, LancasterOnline reported.

The retailer said that it owns the copyright to the "Light in the Valley" pattern, which gives the effect of a three-dimensional design, and that it will enforce its intellectual-property rights.

Zemfira Says Olympics Opening Used Her Song Without Permission

Russian singer Zemfira said the copyright to her song "You Want?" was infringed during the opening ceremony of the Sochi Olympics, the New Republic reported.

When confronted with her accusation, Konstantin Ernst, who directed the ceremony, said in a radio interview Feb. 10 that in the past he had done a lot for her career and dismissed her copyright-infringement claims as "pettiness," according to the New Republic.

Dan Wilson Homes Heads Off Architect's Infringement Claims

Dan Wilson Homes Inc., a homebuilder based in Lubbock, Texas, defeated an architect's copyright infringement claims.

Marshall Hunn of Lubbock sued the company in federal court in Texas in May 2012, claiming he owned the copyrights to the plans for several homes Dan Wilson built.

The case is Hunn v. Dan Wilson Homes Inc., 12-cv-00081, U.S. District Court, Northern District of Texas (Lubbock).

Facebook's new patent from the AOL portfolio (US 8,648,801).

Today, the US PTO awarded Facebook an interesting patent (US 8,648,801) with a funny title, "Aligned display navigation." Since the patent references one of my early patents, I've decided to check it out; and in the beginning it looked quite hot!

First, a little bit of background:

The patent belongs to the AOL portfolio that Facebook acquired from Microsoft for $550 Million. It covers user interactions with content using the touchscreen - a dominant UI solution in modern smartphones and tablets. The inventor, Luigi Lira, has a number of patents in this domain; most of them go back to 2002. For example, the original provisional application for this patent was filed in March, 2002.

The patent specification describes a touchscreen system that helps the user navigate between different sections of a web page. After 12 years of back-and-forth arguments with the US PTO, the patent lawyers for Facebook/AOL managed to generalize the notion of the page into "the content comprises a plurality of portions." The purpose of the generalization is clear: try to cover the modern multi-screen "swipe" interface for smartphones. One of the claims specifically mentions finger as the object being tracked by the system.

On the surface, the patent looks really broad and strong. Nevertheless, using our train analogy*, we can easily spot a logical flaw right in the middle of a long, somewhat obfuscated series of steps:

If I were to attack the patent in court, I would point out to the judge and jury that the patent describes a scenario where the move to the next screen happens BEFORE the system determines whether the user's "swipe" has been validated. That is, according to Claim 1, we move the screen first, and think second. If the system makes a mistake, i.e. the "swipe" turns out to be invalid, we return the user to the previous screen. In essence, we jerk the interface in reaction to any object flying near the screen. Obviously, modern systems do the opposite: they validate user input first, then move to the next screen.

The verdict: after 12 years of patent prosecution, Facebook received a marginally useful patent. It's biggest value would be in threatening other companies with a lawsuit that is not obviously frivolous.

* The train analogy goes as follows:

Imagine that instead of the content with multiple portions (e.g. a web page or app) that needs to be presented on a touchscreen, we have to unload a train with multiple cars. Note that each car has to be unloaded separately: one by one. To make our life easier, someone has sent us a telegram with a detailed description of each car and its relative positions in the train ( in Claim 1 they call it "data representative of content to be displayed on a touchscreen display" - typical aboutness).

Your station manager reads the telegram aloud to the workers and they do the unloading. According to the patent, as soon as the train engineer hears the manager say anything or even sneezes, he moves the next car into the unloading position. If the manager makes a mistake - Ooops! - the engineer moves the train back. Clearly, this is not the best way to organize the operations. The main reason for having a qualified crew, including the manager, is to avoid unnecessary jerking of the heavy train in response to the manager's every sneeze.

tags: patent, facebook, example

(BN) Google Deal Machine Ramps Up to Pass Intel in Top Spot

Google Inc. (GOOG), the company that leads Internet search, has gained a new superlative: top dealmaker.

From buying a digital-thermostat developer to selling a mobile-phone business, Google has executed more deals than any company in the world over the past three years, according to data compiled by Bloomberg through January, up from 13th place in the three years prior. Advertising-firm WPP Plc (WPP) was second, followed by chipmaker Intel Corp. (INTC)

Since taking over as chief executive officer in 2011, co-founder Larry Page has pushed Google beyond Web advertising. He's used the company's cash, which totaled $58.7 billion in the latest quarter, to invest in connected devices, business services and mobile applications. The mergers and acquisitions group, led by Don Harrison, has expanded by at least 50 percent in the past two years, a person with knowledge of the unit said. Meanwhile, Google Ventures has become a big startup spender, and a new group called Google Capital backs later-stage companies.

"It is absolutely starting to feel like a deal machine," said Maha Ibrahim, a partner at venture firm Canaan Partners in Menlo Park, California, which has co-invested with Google Ventures and Google Capital. "Because they have such a diverse base of interests, you see these acquisitions coming out of left field that have very little to do on the surface with the ad business."

Cash Deals

Including acquisitions, investments and the occasional divestiture, the Mountain View, California-based company has been involved with 127 deals in the past three years, more than double the number from January 2008 to 2011, according to the data. While the total value of Google's deals rose to $17.6 billion, that still trails companies such as General Electric Co. at $19.9 billion and Blackstone Group LP at $62.3 billion, the data show. That includes investments that came from other companies and excludes some venture deals that go undisclosed.

Intel, which also has a venture unit, led the prior three-year period with 104 deals, and fell to third in the most recent stretch with 121 transactions.

Google, whose cash holdings are larger than the economy of Tunisia, has been writing bigger checks, a shift from a few years ago, when deals were usually tied closely to online traffic or ads, and were rarely more than $1 billion.

Big Bets

Google agreed last month to buy digital-thermostat maker Nest Labs Inc. for $3.2 billion, moving further into hardware. To bolster its experiments in robotics, Google acquired Boston Dynamics Inc. in December, adding to several other purchases in the industry last year, and bought DeepMind Technologies Ltd., a London-based artificial intelligence developer, in January.

"Google is willing to take equity bets and cash bets trying to acquire the next new revenue stream," said Salman Ullah, who led M&A at Google from 2004 to 2007 and is now a partner at Merus Capital in Palo Alto, California. In the past, "there was a reluctance to do super people-intensive deals and that fell by the wayside. The appetite for non-traditional targets has gone up."

In 2013, the two biggest private financings of U.S. technology companies, not including takeovers, involved cash from Google. Online questionnaire service SurveyMonkey Inc. raised about $444 million in January 2013, with Google Capital taking part, and two months later Google Ventures led a $361.2 million investment in car-booking app Uber Technologies Inc.

Active Pipeline

Last year, Google's corporate development team outflanked Facebook Inc. (FB) in acquiring mapping-software provider Waze Inc. for almost $1 billion. Facebook had also been in talks to buy DeepMind when Google swept in, The Information reported.

Harrison, who was Google's deputy general counsel before taking over the M&A team more than a year ago, said at a Bloomberg conference in June that his group is closing a transaction about every two weeks and has a "pretty active pipeline." Prior to joining Google's legal team, Harrison, worked at law firm Wilson Sonsini Goodrich & Rosati.

"They're very good professional acquirers," said John Malloy, a partner at BlueRun Ventures and investor in Waze. "They know what they're doing."

Former M&A chief Ullah worked with Harrison on Google's $1 billion investment in AOL in 2005. Ullah said that while he was on the verge of falling asleep in the seemingly never-ending meetings, Harrison just kept going.

"He has unlimited stamina," Ullah said. "No amount of detail is too much for him."

Google declined to make Harrison available for comment.

Wide Reach

The spending spree is also raising concern that Google has an unfair advantage over smaller competitors because of its cozy relationships and inside knowledge of so many industries, said Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington. Google controls two-thirds of the U.S. search market and has more than 1 billion users of its YouTube video service.

"Increasingly the question arises -- why isn't there greater scrutiny of Google's practices?" Rotenberg said.

Google's strategy is in contrast to that of Apple Inc., the only Silicon Valley company with more cash on its balance sheet. The iPhone maker has only taken part in 12 deals in the past three years, according to data compiled by Bloomberg, and has been sending cash back to shareholders in the form of dividends and buybacks. Google's shares have climbed 97 percent over the period, while Apple has advanced 48 percent.

Ideas, Moonshots

Google agreed last month to sell its Motorola handset business, which it bought for $12.4 billion in 2012, to Lenovo Group Ltd. for $2.91 billion. Google said it was better off focusing on its mobile Android software and retaining key patents valued at $5.5 billion at the time. Google also sold off Motorola's set-top box business for $2.24 billion last year.

While there is concern that Google is extending its reach too far, the co-founders are keeping with their vision of seeking technology that can solve big problems, according to Patrick Mork, a former marketing director at Google Play, which sells applications and content for Android devices.

"These guys have always been a little idealistic about wanting to use technology to change things on a large scale," said Mork, who is now an entrepreneur in residence at Signia Venture Partners. "It's by taking these moonshots."

Broad Approach

Google Capital is the newest unit for later-stage investments. It has at least a half-dozen employees, according to current public profiles on LinkedIn Corp. That includes partner Gene Frantz, who joined last year from TPG Capital, where he worked for more than a decade. David Lawee, Google's former M&A chief, leads the group.

Last year, Google Capital was part of a $125 million investment in LendingClub Corp., an online peer-to-peer loan service in San Francisco. Earlier, it joined private-equity investors in backing SurveyMonkey. Both companies are aiming to serve small businesses, an area of focus for Google as it expands its cloud software offerings.

"Google has been a very good acquirer as they have been good at integrating and benefiting from their deals," said Dave Goldberg, CEO of Palo Alto-based SurveyMonkey.

With Google Ventures, the company makes bets on startups that may not have a lot of market traction or revenue. The unit started in 2009 and is funded by its parent, which is providing $300 million a year, up from $200 million in 2012. Google Ventures made 75 investments last year and had 10 exits, including three initial public offerings. The group has more than 50 employees, including nine general partners and one managing partner.

New Technologies

"When we founded Google Ventures, we structured the fund to build in an unprecedented level of autonomy," Bill Maris, managing partner at Google Ventures, wrote in an e-mail. "The idea was never, 'What can startups do for Google?' It was always, and remains, 'What can we do for startups?'"

Tom Moss, co-founder of Nextbit Systems Inc., took an investment from Google Ventures along with Accel Partners, where he's an entrepreneur-in-residence.

"Google is still very well regarded in the technology community, generally as a company that loves technology and wants to push technology forward," Moss said.

Google needs to find new markets after sales growth slowed to 19 percent last year from 37 percent in 2012. In addition to the added revenue from acquisitions, investments have the potential to provide insights into emerging markets or promising technologies that Google wouldn't otherwise see.

"They really are all over the map," said Ethan Kurzweil, a partner at Bessemer Venture Partners in Menlo Park. "Every strategy you can imagine a company employing, they're employing in one way or another."

Monday, February 10, 2014

(BN) Motorola Mobility, Nokia, Samsung: Intellectual Property

(Bloomberg ) Motorola Mobility (MMI), which Google Inc. (GOOG) is selling to Lenovo Group Ltd., faces European Union curbs on its legal efforts to thwart Apple Inc. (AAPL) as antitrust regulators seek to boost competition for smartphones and tablets.

The company will get a "prohibition decision" for abusing key mobile-phone patents in its battle with the iPhone maker, Joaquin Almunia, the EU's competition commissioner, told reporters in London Feb. 7. Such rulings typically include an order to modify behavior. Almunia didn't specify whether the Google unit would face fines.

The EU is cracking down on possible patent abuses as Motorola Mobility, Microsoft Corp. (MSFT), Apple and Samsung Electronics Co. (005930) trade victories in divergent court rulings around the world on intellectual property. Almunia has said he's targeting the "rules of the game" to prevent companies from unfairly leveraging their inventions to thwart rivals.

The EU also plans to complete a settlement of a similar case against Suwon, South Korea-based Samsung in April, Almunia said.

Nokia and HTC Settle All Patent Litigation

Nokia Oyj (NOK1V) and HTC Corp. (2498) settled all pending patent litigation, the two companies said in a joint statement Feb. 7.

HTC, based in Taoyuan City, Taiwan, will make payments to Nokia related to wireless high-speed data communication patents, according to the statement.

Paul Melin, Nokia's chief intellectual property officer, said in the statement that the agreement will help his Espoo, Finland-based company focus on further licensing activities.


'Glee' Might Be Banned in U.K. After Adverse Trademark Ruling

Twenty-First Century Fox Inc. (FOXA)'s television program "Glee" may be forced off the air in the U.K. and the sale of its DVDs and music downloads halted there in the wake of a trademark ruling in favor of a chain of comedy clubs, the BBC reported.

A High Court judge found that the television program infringed trademark belonging to Comic Enterprises Ltd.'s chain of clubs known as the Glee Club, according to the BBC.

A spokesman for the television producers told the BBC the ruling would be appealed.

NHL's Phoenix Coyotes' Name Change May Face Trademark Hurdle

The National Hockey League Inc.'s Phoenix Coyotes' proposed name change may be forced into a time-out until trademark issues are settled, Arena Digest reported.

The name was to be changed to the Arizona Coyotes when the team moves to a new arena in Glendale, Arizona, according to the publication.

An Arizona resident has already registered the new name as a state trademark, Arena Digest said.

Samsung Asks Olympic Athletes to Cover Its Competitors' Logos

Samsung Electronics Co., which is giving Olympic athletes Samsung Galaxy Note 3 smartphones in their bags of gift merchandise, has asked that if they use any other manufacturer's device during the games, they cover up the logo so it's not visible, the BrandChannel website reported.

The Korean electronics company made a similar request at the London Olympics in 2012, according to BrandChannel.


Domain Registrar Key-Systems Is Found Liable for Infringement

A German court said an Internet domain registrar can be liable for copyright infringement by a website it registered if it's obvious the site is used for infringement and the registrar does nothing to halt it, PCWorld reported.

The ruling, from the Regional Court of Saarbrucken, came in a case between Universal Music and Key-Systems GmbH, a domain registrar based in St. Ingbert, Germany, according to PCWorld.

The case was brought to prevent unauthorized distribution of Robin Thicke's album "Blurred Lines," it said.

Key-Systems reportedly argued that it merely offered a technical service. The court said the infringement offered by one of the registered websites was so obvious that the registrar was obliged to act against it, according to PCWorld.

Sunday, February 09, 2014

(BN) Brain Implants Hold Promise Restoring Combat Memory Loss

(Bloomberg ) The Pentagon is exploring the development of implantable probes that may one day help reverse some memory loss caused by brain injury.

The goal of the project, still in early stages, is to treat some of the more than 280,000 troops who have suffered brain injuries since 2000, including in combat in Iraq and Afghanistan.

The Defense Advanced Research Projects Agency is focused on wounded veterans, though some research may benefit others such as seniors with dementia or athletes with brain injuries, said Geoff Ling, a physician and deputy director of Darpa's Defense Sciences office. It's still far from certain that such work will result in an anti-memory-loss device. Still, word of the project is creating excitement after more than a decade of failed attempts to develop drugs to treat brain injury and memory loss.

"The way human memory works is one of the great unsolved mysteries," said Andres Lozano, chairman of neurosurgery at the University of Toronto. "This has tremendous value from a basic science aspect. It may have huge implications for patients with disorders affecting memory, including those with dementia and Alzheimer's disease."

At least 1.7 million people in the U.S. are diagnosed with memory loss each year, costing the nation's economy more than $76 billion annually, according to the most recent federal health data. The Department of Veterans Affairs estimates it will spend $4.2 billion to care for former troops with brain injuries between fiscal 2013 and 2022.

Brain Stimulation

Medtronic Inc. (MDT) already sells implants used in deep brain stimulation treatment to reduce some symptoms of Parkinson's disease and other neurological conditions. Now, Darpa officials hope to build on neuroengineering advances, such as one that helped people with limited motor functions communicate with a device, according to agency documents posted online.

The Pentagon has sought research proposals from companies and organizations, asking for ideas on stimulating brain tissue to help restore memory. If the research pans out, it may attract interest from companies including General Electric Co. (GE) and International Business Machines Corp. (IBM) as well as Medtronic, said Art Caplan, medical ethics director at New York University's Langone Medical Center and an occasional Darpa adviser.

Federal health regulators have already authorized Medtronic's implant for sale in the U.S. St. Jude Medical Inc. (STJ), based in St. Paul, Minnesota, and Boston Scientific Corp. (BSX), based in Natick, Massachusetts, sell similar devices overseas and are seeking U.S. approval.

Implantable Probe

The memory project is part of President Barack Obama's BRAIN initiative, which funds research that seeks to find treatments for some of the most common brain disorders, such as Alzheimer's and brain injury.

Darpa is seeking to develop a portable, wireless device that "must incorporate implantable probes" to record and stimulate brain activity, according to documents posted online. Those submitting proposals were instructed to specify the number, size, spacing, weight and power requirements of the probes in their proposals, as well as what areas of the brain would be targeted and the surgical procedures used to implant the devices.

The existing Medtronic product to treat Parkinson's uses a surgically implanted device consisting of thin wires that carry a signal to electrodes that "deliver stimulation to the brain." Some of the wires are implanted inside the brain, while the rest are placed under the scalp. The electrical impulses are powered by a product located under the skin in the upper chest area, according to the company's website.

Roadside Bomb

Darpa's envisioned brain probe may one day help with some of the memory losses suffered by people like Thomas Green III, who said he was driving a five-ton truck in Iraq in 2004 when it hit a roadside bomb, then flipped 10 times. Green survived with a crushed pelvis, fractured back and a brain injury.

After the attack, the 31-year-old U.S. Army sergeant said he couldn't recall how to put on a shirt or brush his teeth. While dating the woman who is now his wife, he sometimes forgot to pick her up and didn't always remember her name.

Improvised explosive devices, the type of homemade bomb that Green said his truck hit, have contributed to war-time injuries, though many more have occurred among troops stationed at their bases in accidents such as vehicle crashes, falls and training injuries, according to military data.

Lost Memories

The Darpa initiative isn't designed to recover the type of memories used to recall a person's name. Instead, it would help wounded warriors recover "task-based motor skills" necessary for "life or livelihood," Ling said.

The brain implant, for example, might enable people to recall how to drive cars, tie their shoes and perhaps eventually operate machinery or fly planes, he said.

The Pentagon research office behind the memory project has a history of supporting programs that have led to commercial success. Darpa's work contributed to the creation of the Internet and stealth fighter jets. Its long-shot, far-out projects now under development include "geckskin," part of a program designed to help soldiers climb walls like lizards, and robotic pack mules capable of carrying gear.

"We strive to come up with projects that would ultimately be transformative," Ling said. "It you look at our portfolio, it supports that."

'Warrior Websuit'

Another Darpa program may lead to bodysuits designed to make soldiers stronger and less prone to injuries or fatigue. The suit may also be used in rehabilitative medicine, according to agency documents.

The odds of parts of both the bodysuit and brain implant projects being used in an application are as high as 70 to 80 percent, said Mike Hopmeier, who worked as a contractor and consultant at Darpa from the mid-1990s to 2005.

"If you're saying, well, at the end of the program will they actually turn out a brain chip, or put somebody in a warrior websuit, the probability of that is probably 10 to 15 percent," Hopmeier said.

Justin Ihle, a spokesman for Minneapolis-based Medtronic, didn't comment on whether the medical products company is bidding on the Darpa brain project. He said it is "interested in forming partnerships with institutions, such as Darpa, that may one day lead to new treatment options and better technology."

Nadeem Ishaque, a GE Global Research official, said in an e-mailed statement that while the company didn't plan to submit a proposal, it's starting to explore implantable devices. An IBM spokesman didn't provide comment on whether the company was interested in bidding on the Darpa memory project.

Green, a Fayetteville, North Carolina, resident who left the military in 2005, said he has developed ways to live with his memory loss.

The lapses mean he might arrive at work early to stay on top of his VA job helping other veterans find work. He sets up multiple reminders on his phone and computer.

(BN) Bitcoin Price Plunges as Mt. Gox Exchange Halts Activity

(Bloomberg ) Bitcoin plunged more than 8 percent today after a Tokyo-based exchange halted withdrawals of the digital currency, citing technical malfunction. 

Mt. Gox, a popular exchange for dollar-based trades, said in a blog post it needed to "temporarily pause on all withdrawal requests to obtain a clear technical view of the currency processes." It promised an "update" -- not a reopening -- on Monday, Feb. 10, Japan time.

Yesterday, the Russian prosecutor general said in a statement on its website that after a meeting with the central bank, the Federal Security Service and Interior Ministry, it had concluded Bitcoin and other digital currencies are illegal under current law.

"Russia's official currency is the ruble," according to the statement. "The introduction of other currencies and the issue of money surrogates are banned."

Calls to the Russian prosecutor's press office in Moscow after hours went unanswered.

The report gained wider circulation on Twitter Inc.'s service today after, a Russian state broadcaster, published an English-language article on the action.

The price of Bitcoin was down more than 6.5 percent to $732.40 at 3:09 p.m. New York time, according to the CoinDesk Bitcoin Price Index, which averages prices from exchanges including Mt. Gox. The price had fallen more than 8 percent at 8:23 a.m.

Market Making

SecondMarket Inc., which runs a Bitcoin investment fund for accredited investors, announced it would buy Bitcoins, partly in response to the Mt. Gox closing. Barry Silbert, the New York-based company's chief executive officer, said in a message on Twitter that its trading team would "make a market on a pilot basis," for orders of at least 25 Bitcoins.

Silbert, whose company brokered trades of shares in closely held companies such as Facebook Inc. (FB) before they were publicly traded, said the trouble at Mt. Gox demonstrates "a clear need for a U.S.-based, regulated, compliant and trustworthy Bitcoin exchange."

"This could be the first step in that direction," Silbert said in an e-mail.

U.S.-based exchanges have either closed at the behest of law enforcement or had difficulties obtaining business bank accounts because of regulatory uncertainty. State regulators are currently considering how to license digital currency exchanges as money transmitters.

Bitcoin prices have generally traded at higher dollar prices on Mt. Gox because customers have had difficulties getting the U.S. currency out of the exchange. U.S. authorities twice seized, most recently in August, Mt. Gox bank accounts in the U.S. worth a total of $5 million after the company failed to register as a money transmitter.

Premium 'Collapsed'

In the past few days, Mt. Gox customers have also encountered delays in withdrawing Bitcoins, said Greg Schvey, head of research at the Genesis Block, a New York-based digital-currency analysis firm. As a result, the premium to other exchanges has "collapsed," Schvey said in an e-mail.

Mt. Gox has fallen to about 25 percent of global Bitcoin-dollar trades from about 80 percent last April, Schvey said, with other exchanges such as London-based Bitstamp picking up the volume. Around the time the Tokyo firm's bank accounts were seized, the company cited rising withdrawals as the reason why customers couldn't get dollars out of the exchange.

Saturday, February 08, 2014

(BN) NBC Said Poised for Sochi Profit With Twitter-Infused Olympics

(Bloomberg ) Comcast Corp. (CMCSA)'s NBCUniversal expects turn a profit on the Winter Olympics, employing a strategy that uses video clips on Twitter and Facebook to draw viewers to their TV sets, people with knowledge of the situation said.

In London two years ago, NBC found that sharing on Twitter and Facebook Inc. (FB) generated interest in broadcasts that aired hours later in prime time. At this winter's games, the network increased the hours being live-streamed by 42 percent, and struck a deal with Twitter Inc. (TWTR) that that lets smartphone users record events like ski jumping to watch when they get home.

"The more screens people watch on, the more they consume on TV," Alan Wurtzel, president of research at NBCUniversal, said in an interview.

The nine-hour time difference between New York and Sochi underscores the importance of the social-media sharing. By the time U.S. viewers settle in to their couches to watch prime-time coverage of slalom, figure skating or bobsledding, the results will have been known for hours.

More Hours

In London, where the time difference was five hours, people who watched the games on multiple devices also tended to watch more. They averaged 8 hours and 29 minutes of viewing a day, compared with 4 hours and 19 minutes for TV-only viewers, Wurtzel said. About half of that additional viewing took place on conventional TVs. The audience exceeded expectations, and Comcast's entertainment unit broke even on the production.

"Streaming added TV viewers, and that was the most important finding," Wurtzel said. "It was a pleasant surprise."

'Fingers Crossed'

One hurdle facing NBC in Sochi is political controversy of a Russian anti-gay law, which has attracted worldwide condemnation. Human Rights Watch is pressuring Olympics sponsors, including Coca-Cola Co., McDonald's Corp. (MCD) and Procter & Gamble (PG), to protest the measure. AT&T Inc., which isn't a sponsor, this week took a stand against the law. Many of the sponsors have said they've raised the issue with the International Olympic Committee.

As with any major international event, there is also the risk that the games get overtaken by political events. Air carriers flying to Russia were warned this week to watch for toothpaste tubes containing materials that could be turned into a bomb in flight.

"Although obviously we have our fingers crossed that nothing happens, if anything, the prospect of a terrorist event, the controversy over the anti-gay laws, those things in an odd way have increased awareness and interest in these games," Bob Costas, the NBC anchor, told reporters in January. "I think people will be curious about that."

Boosting TV

NBC will stream 1,000 hours of events live from Sochi, up from 700 in London and more than the total for the Vancouver and Turin Winter Games combined, said Sam Schwartz, chief business development officer at Philadelphia-based Comcast, which bought the remaining 49 percent of NBCUniversal last year. To access most of it, viewers need to be pay-TV customers.

The Web clips will run alongside 500 hours of broadcast and cable coverage, and 200 hours of video-on-demand on pay TV.

The Sochi Games are part of a multiyear commitment by NBCUniversal, which has broadcast every Olympics in the U.S. since 2000. NBC uses the games to launch new shows, like this year's late-night transition to Jimmy Fallon. The network also measures the effect of technology like Twitter and Facebook on viewing habits, and applies what it learns to subsequent games.

More Viewing

NBC Universal and Comcast spent several months studying audience metrics from London. One key finding: Of the 217 million U.S. viewers of the London Games, 53 million watched on a device other than a TV, Schwartz said. Events carried on the NBC Sports Live Extra application, available only to pay-TV customers, had higher audiences when rerun later on NBC's TV networks in prime time, he said, suggesting the app built audiences for conventional viewing.

NBC begins its prime-time coverage of Sochi events, including snowboard slopestyle and team figure skating, on Feb. 6, one night before the network's coverage of the Feb. 7 opening ceremonies. While the sports events will be webcast, NBC has said it won't put the opening ceremony online.

NBCUniversal also expanded its relationship with Twitter. The San Francisco-based microblogging service, with more than 241 million worldwide users, will incorporate NBC content into message streams during the games. This week, for example, it distributed a video segment, narrated by Ryan Seacrest, featuring South Korean figure skater Yuna Kim.

DVR Button

NBC is also taking advantage of the ability to share videos more easily than in past games. Twitter users will be able to access clips in posts using a feature called "SEEiT." By clicking a button, they can watch on a mobile device or online, or they can instruct their cable set-top box to record the event. The feature works for cable customers of Comcast, Time Warner Cable Inc. (TWC) and Charter Communications Inc. (CHTR)

Comcast is also using Sochi to promote subscriptions to its cable service, the largest in the U.S. Most of the 1,000 hours of Sochi clips available for the NBC Sports Live Extra app can be accessed only by pay-TV customers, of Comcast or other providers.

Wednesday, February 05, 2014

(BN) Tesla Breaks Into Top 5 Brands in Consumer Reports Survey

(Bloomberg ) Tesla Motors Inc. (TSLA), the youngest U.S. automaker, ranks in the top five brands among people surveyed by Consumer Reports, another accolade from the magazine that rates Tesla's Model S among the best cars it's ever tested.

Tesla was fifth in the poll, up from 11th last year, behind namesake brands of Toyota Motor Corp. (7203), Ford Motor Co. (F) and Honda Motor Co. as well as General Motors Co. (GM)'s Chevrolet, the Yonkers, New York-based magazine said today. The results are from a December survey of 1,578 vehicle owners asked to rank brand attributes including quality, safety, value, design and technology.

"Over the last six months or so there has been a lot of visibility for that brand, a lot of media attention, so there's more awareness for consumers," said Tom Libby, an auto analyst for Polk in Southfield, Michigan. Tesla's rise in the rankings "can't hurt as that is a highly respected publication that has no need to respond to any constituency."

A surge in Tesla shares began in May, after the Palo Alto, California-based company led by billionaire Elon Musk reported its first quarterly profit and Consumer Reports the next day gave the $71,000 battery-powered Model S a score matching the highest ever given to any vehicle. The magazine said in November that the Model S also topped its owner satisfaction poll, amid a review of the car by U.S. regulators after two crash-related battery fires.

Toyota Gains

The brand named for inventor Nikola Tesla got 88 points in the latest survey, up from 47 last year, ranking highly for "innovation, performance, and sleek styling," Consumer Reports said. The company displaced Daimler AG's Mercedes-Benz, which fell to seventh from fifth last year.

Toyota widened its lead in the survey, gaining five points to 145, to place ahead of Ford, which got 120, the magazine said. Honda slipped from second to third with 109 points, down 16 from a year ago, while Chevrolet gained 13 for a total of 105 points. Subaru, the auto brand of Fuji Heavy Industries Ltd., rose to sixth in the survey with 87 points from 13th a year earlier, the magazine said.

Continued improvements for Ford and Chevrolet in the rankings bode well for those brands, Libby said.

"One isolated indicator doesn't mean that much, but as the accolades build one after the other it adds to the momentum that the changes are real," he said.

Volvo Cars (175), the Swedish brand owned by China's Zhejiang Geely Holding Group Co., ranked eighth, down from sixth, followed by GM's Cadillac and Bayerische Motoren Werke AG's BMW. Chrysler Group LLC's Dodge and Hyundai Motor Co.'s namesake brand both fell out of the top 10, the magazine said.

The lowest-ranked brands were Jaguar and Land Rover, British luxury lines owned by India's Tata Motors Ltd., and Fiat SpA's Maserati, according to Consumer Reports.

(BN) Burgers Beat Baguette Sandwiches, Steak-Frites in France

(Bloomberg ) Burgers have become the new favorite food in France, beating out steak-frites and baguette sandwiches, a study released today by Gira Conseil showed.

Three-quarters of France's 110,000 restaurants now include the American bun-and-beef classic on their menus. Their sales have jumped 40 percent since 2011 and the burger is beating out the traditional premium meat and fish dishes, the study showed.

"Protein between two slices of bread -- the French love it," Bernard Boutboul, head of Paris-based restaurant researcher Gira Conseil, said in an interview. "The explosion of burgers is coming from restaurants. It's affordable and chefs want to show they can make a quality burger."

The reign of the burger in the land of Jose Bove, the activist farmer and a one-time presidential candidate who famously accused McDonald's Corp. of serving "malbouffe," or junk food, comes as France's economic slump drives consumers toward cheap meals and ones that can be consumed quickly.

Burgers represent nearly half of all sandwiches sold in France, with 977 million units sold last year out of a total of 2.14 billion. While fancy restaurants now serve burgers, most of those sandwiches are sold at one of France's 1,300 McDonald's outlets.

The Oak Brook, Illinois-based company published sales of 4.5 billion euros (6.09 billion) in 2013 in France, a 2.4 percent increase from last year, its press office in Paris said. McDonald's gets between 1.8 and 2 million customers a day in the country, it said.

Burger Trucks

Also increasingly popular in Paris, Bordeaux and Lyon are burger trucks that draw long lines of customers. Restaurant critics have started publishing their favorite burger venues, including in the national newspaper Le Figaro's edition today.

A 2012 report by consumer market researcher NPD Group showed French people are the biggest burger consumers in continental Europe with 14 burgers per year per person. That's more than Germans, who ate 12 and fewer than the British, who ate 17. The study shows French people eat three times more burgers than they do a regular beef steak.

"The burger targets a mixed clientele, because half of their consumers are women," wrote Christine Tartanson, of NPD in France. "So it's much less divisive than red meat usually eaten by men."

Gira Conseil's study was conducted late last year.

Lunch Talk: BBC Mechanical Marvels Clockwork Dreams

tags: lunchtalk, innovation, invention

Tuesday, February 04, 2014

(BN) Apple Joins Google in Pressing Court to Curb Patent Abuse

(Bloomberg ) Apple Inc. (AAPL) and Google Inc. (GOOG), saying they're tired of being slapped with frivolous patent suits that cost millions of dollars in legal fees, are asking the U.S. Supreme Court to let them hit back.

The rival tech giants are leading a group of companies urging the court to make it easier to collect attorneys' fees from patent-holders who lose infringement suits. In two cases to be argued this month, the justices for the first time will consider the rules that govern fee awards in patent litigation.

For Apple and Google, change can't come soon enough. Each has been sued more than 190 times in the past five years by "patent-assertion entities," companies that get most of their revenue from patent licensing and enforcement, according to the research firm PatentFreedom. For every case that reaches court, Apple says, it gets dozens of letters demanding royalties.

"Technology companies are seeing an onslaught of patent claims," said Charlene Morrow, a Mountain View, California, patent lawyer with Fenwick & West, which represents some of Silicon Valley's biggest businesses. A favorable Supreme Court ruling "should make it less profitable to bring frivolous claims."

More than 100,000 companies were threatened in 2012 alone with infringement suits by businesses whose sole mission is to extract royalty revenue, according to a White House report. Those entities, dubbed "patent trolls" by critics, filed 19 percent of all patent lawsuits from 2007 to 2011, according to the Government Accountability Office.

Guessing Wrong

Some patent-holders say the technology companies are exaggerating the problem. Most suits are legitimate, said Robert Berman, chief executive officer of CopyTele Inc., a Melville, New York-based company that buys patents and has about three dozen suits pending. He said he shouldn't be penalized for guessing wrong about what a judge or jury will decide.

"If you look at which area of law has the most frivolous lawsuits, I'm not sure patent law is at the top of the list," Berman said.

The cases, to be argued on Feb. 26, give the Supreme Court two different avenues for allowing more fee awards.

One involves Octane Fitness LLC, a company seeking as much as $1.8 million in fees after defeating a patent suit. Octane was sued by Icon Health & Fitness Inc., another exercise equipment maker, over a component in elliptical machines.

Octane is challenging the test for awards established in 2005 by the U.S. Court of Appeals for the Federal Circuit, which handles patent cases. The Federal Circuit allows fees if a suit is "objectively baseless" and was filed in bad faith.

Insurmountable Hurdle

Octane says the Federal Circuit has erected an all but insurmountable hurdle. Trial judges instead should award fees when a patent holder "unreasonably pursues a case having an objectively low likelihood of success," argued the company, which is based in Brooklyn Park, Minnesota.

The U.S. Patent Act says fees can be awarded "in exceptional cases," leaving it to the courts to interpret that phrase.

The Federal Circuit's approach is also drawing criticism from some of the biggest names in the computer and telecommunications industries: Facebook Inc. (FB), Cisco Systems Inc., Intel Corp., Verizon Communications Inc. and Yahoo Inc. (YHOO), as well as Apple and Google.

Apple told the justices that the company faces 228 unresolved patent claims and employs two attorneys just to respond to letters that demand royalties. The iPad maker says it has been sued 92 times by patent-assertion entities in the last three years, settling 51 cases, with most of the rest pending.

'Small Consolation'

"Apple has rarely lost on the merits," the company said in court papers. "But victory figures as small consolation because in every one of these cases, Apple has been forced to bear its legal fees."

Google, joined by 13 other companies, told the justices that patent-assertion entities have an unfair advantage because they don't make products of their own, leaving them effectively immune from countersuits.

Icon says its case is the wrong one to deal with the issue. The Logan, Utah-based company has been making exercise equipment for more than three decades and sells the NordicTrack and Pro-Form machines.

The issue Octane and its allies are asking the court to resolve "is not presented in this case, which all concede does not involve a patent troll," Icon argued.

More Flexible

Icon contends that the Federal Circuit's standard for awarding fees is more flexible than Octane contends and that it gives trial judges ample leeway to punish frivolous suits.

Icon's position isn't garnering much support, at least away from the court: In an unusual twist, no outside group has filed a brief backing the company.

The other case does involve accusations that a company is a "patent troll." Highmark Inc., a Pennsylvania insurer, is seeking to reinstate a $5 million fee award it won after defeating a patent suit by Allcare Health Management Systems Inc.

The disputed patent, which Allcare acquired from an inventor for $75,000, covered a system that lets doctors enter symptom data into a computer and receive a list of possible treatments.

In making the fee award, a federal district judge in Fort Worth, Texas, said Allcare had engaged in deception, conducting a fake survey as a means of identifying targets for its royalty demands.

'Negative Connotation'

"Allcare's actions align the sort of conduct that gives the term 'patent troll' its negative connotation," U.S. District Judge Terry Means wrote.

The Federal Circuit rejected Means's conclusion and ordered a recalculation of the award. Voting 2-1, the appeals court said Allcare's reading of the patent, while wrong, was "not unreasonable."

The question for the Supreme Court is whether the Federal Circuit must defer to a trial judge's conclusion that a suit meets the standard for awarding fees.

Companies are also pushing Congress to make it easier for penalties to be imposed. One proposal, by House Judiciary Committee Chairman Bob Goodlatte, a Virginia Republican, would force the losers of patent cases to pay the winners' expenses in most cases.

Judges rarely order patent owners who lose their cases to pay the other side, and the Federal Circuit itself has been grappling with the issue. In 2012, it ordered a federal judge in Texas to impose sanctions against a company for making unreasonable claims of what its patent covered.

The cases are Octane Fitness v. Icon Health & Fitness, 12-1184, and Highmark v. Allcare Health Management Systems, 12-1163.

(BN) Google, Facebook, Ubisoft, Apple: Intellectual Property

(Bloomberg ) Google Inc. (GOOG) and Cisco Systems Inc. (CSCO), two of Silicon Valley's largest companies, entered a long-term deal to license each other's intellectual property, saying they want to curb the patent lawsuits that have plagued the industry.

The agreement covers a broad range of products and allows each company to extract "significant value" from its patents, according to a statement yesterday. Financial terms weren't disclosed.

The pact brings together two businesses that rarely compete directly. Cisco is the largest maker of networking equipment, while Google is the market leader in Internet searches and smartphone software. The agreement will decrease the risk of future lawsuits, the companies said in the statement.

Both San Jose, California-based Cisco and Mountain View, California-based Google belong to the advocacy group Coalition for Patent Fairness.


Facebook's 'Paper' App Followed by Software Firm's Registration

After Facebook Inc. (FB) said Jan. 30 that it was releasing a new application to be named "Paper," New York-based app-developer Fifty-Three Inc. filed with the U.S. Patent and Trademark Office to register "Paper" as a trademark to be used with application software.

Fifty-Three said in the filing that it had been using the term in commerce since March 2012.

In a Feb. 3 blog posting, Fifty-Three Chief Executive Officer Georg Petschnigg said that while Facebook apologized about the name confusion, he still wants the social-network company to stop using the name.

Ubisoft Says 'Watch Dogs' Mark Wasn't Abandoned, MCV Reports

Ubisoft Entertainment (UBI) SA, the French maker of video games, said someone purporting to be a company official made a false filing with the U.S. Patent and Trademark Office, asking that the company's application to register "watch dogs" be abandoned, according to MCV, a computer game news website.

The company told MCV that it's working with the patent office to reinstate the mark.

IAC's Home Shopping Network Stops Using Name of German Town

IAC/InterActiveCorp (IACI)'s Home Shopping Network, along with Martha Stewart and Emeril Lagasse, agreed to stop using the name of Solingen, Germany, to sell knives.

The agreement is part of the settlement of a trademark suit brought in federal court in Florida by the Chamber of Industry & Commerce Wuppertal-Solingen-Remscheid in September 2012. Other terms of the settlement weren't disclosed to the court.

The case is Chamber of Industry and Commerce Wuppertal-Solingen-Remscheid v. Stewart, 13-cv-00563, U.S. District Court, Middle District of Florida (Tampa).


Apple Asks Appeals Court to Halt Monitoring in E-Books Case

Apple Inc., facing as much as $840 million in state and consumer antitrust claims tied to price-fixing in the electronic-book market, asked an appeals court to halt oversight by a court-appointed compliance monitor.

The Cupertino, California-based company is challenging the monitor imposed by U.S. District Judge Denise Cote in Manhattan.

The case is U.S. v. Apple Inc. (AAPL) 14-60, U.S. Court of Appeals for the Second Circuit (Manhattan). The district court case is U.S. v. Apple Inc., 12-cv-02826, U.S. District Court, Southern District of New York (Manhattan).

The Web is Dead - mobile edition.

The hyperlink (or URL) is one of the greatest inventions of the web era. It is excellent for linking pages, navigating between sites, downloading content, etc. Unfortunately, the URL is largely useless on mobile devices because it doesn't work outside the browser. To solve the problem, mobile technology companies develop alternatives that allow launching one app from another. MIT Tech Review reports that,

Today mobile apps increasingly rule our free time and require us to dive into separate, walled-off digital containers that don’t link up.

The new kind of hyperlink could make apps seem less walled off from one another. Deep linking, as the technology is called, is also seen as a way to open up new forms of advertising that will provide revenue to make mobile advertising more closely match its online counterpart (see “Why No One Likes Mobile Ads”).

Once a suitable replacement for the URL is found, the decline of the web will become inevitable. Here's a cheesy Facebook video that explains the concept:

tags: web, technology, evolution, aboutness, mobile, application

Lunch Talk: Robert Noyce (1984)

Robert Noyce is credited with Jack Kilby for the invention of the integrated circuit and co-founded both Fairchild Semiconductor and Intel.

In this 1984 lecture, Robert Noyce reviews the development of the integrated circuit from its infancy in the 1950s to the early-1980s as well as its impact on technology and society. Noyce discusses the innovations in transistors that lead to the creation of the integrated circuit. Next, Robert Noyce talks about the technical challenges of building increasingly more compact and more powerful semiconductors as well as the overall effects of Moore's Law. Finally, Noyce looks ahead to the future of semiconductor development that was uncertain at the time of this lecture, but is now in our past.

tags: invention, innovation, lunchtalk

Facebook wireless wake-up patent (US 8,644,892)

Today, US Patent Office awarded Facebook a patent on a wireless device with a passive RFID tag that can trigger different power modes. In one scenario, when your iPhone is in sleep mode it receives a wake-up call from an RFID reader, powers up the main battery, and transfers the data from the tag to the device.

Again, the easiest way to explain the patent is through the train analogy we used in Scalable Innovation (Chapter 3). 

Imagine that instead of wireless devices and Radio Frequency signals you are running a train station operation. You also have a telegraph machine that allows you to receive and read telegrams from neighboring stations. It's early in the morning; no major load-unload processes are in progress; the only half-awake person in the building is one Thomas Alva Edison, your trainee telegraph operator.
Suddenly, his telegraph machine starts chattering and he receives a telegram from a neighboring station that a big train is departing toward you. Mr. Edison reads the telegram, wakes up your station crew, and reads the contents of the telegram to the station manager.

In the Facebook patent, the wireless device is your train station in wake up or sleep mode. The RFID tag is Edison with his telegraph apparatus. First, he can receive a telegram that no trains are coming and send everybody home. Then, the tag receives a wake-up signal from an RFID reader (the neighboring station) and transfers the contents of the signal (the telegram) to the main memory with a processor (the manager), which is configured to run a pre-defined program. That's it. The rest of the wording in the patent is for obfuscation purposes.

The invention fits the Telegram before the Train invention pattern we consider in detail in Chapter 25. 

tags: patent, packaged, payload, control, system, example, facebook

(BN) Google Forges Patent-Licensing Deal With Cisco to Curb Lawsuits

(Bloomberg ) Google Inc. (GOOG) and Cisco Systems Inc. (CSCO), two of Silicon Valley's largest companies, entered a long-term deal to license each other's intellectual property, saying they want to curb the patent lawsuits that have plagued the industry.

The agreement covers a broad range of products and allows each company to extract "significant value" from its patents, according to a statement today. Financial terms weren't disclosed.

The pact brings together two businesses that rarely compete directly: Cisco is the largest maker of networking equipment, while Google is the market leader in Internet searches and smartphone software. Still, the agreement will decrease the risk of future lawsuits, the companies said in the statement. The technology industry has been embroiled in litigation in recent years, especially over the smartphone technology developed by Apple Inc., Samsung Electronics Co. and Google.

"In today's overly litigious environment, crosslicensing is an effective way for technology companies to work together and help prevent unnecessary patent lawsuits," said Dan Lang, vice president of intellectual property at San Jose, California-based Cisco.

Both Cisco and Mountain View, California-based Google belong to a patent-advocacy group called Coalition for Patent Fairness.

Monday, February 03, 2014

(BN) Israel Emerging as Cybersecurity Powerhouse With Investor Kramer

(Bloomberg ) Israel's campaign to become a cybersecurity powerhouse, an effort trumpeted by Prime Minister Benjamin Netanyahu, owes a debt to entrepreneur and investor Shlomo Kramer.

Over more than two decades, Kramer has founded or backed six Israeli online-security companies, amassing a personal fortune of about $800 million, according to data compiled by Bloomberg. The 47-year-old has taken the money earned from deals and initial public offerings and plowed it back into new startups and technologies, developing fresh ways to fend off virtual enemies.

"He is my first call in terms of bouncing ideas and brainstorming in terms of security," said Asheem Chandna, a partner at Menlo Park, California-based Greylock Partners who has backed Kramer's companies and serves on the board of one of them. "He's able to map how these markets are headed. His crystal ball is as strong or as clear as anybody's out there."

A co-founder of Check Point Software Technologies Ltd., the second-largest listed Israeli company, Kramer represents a breed of innovators that the country is seeking to harness in a bid to boost technology exports. Online attacks against Web hosting servers and data centers are a growing threat, spurring demand for more advanced defenses. U.S.-based Neiman Marcus Group and Target Corp. were both recently compromised by hackers, who stole credit card information. Snapchat Inc., a popular photo-sharing site, also suffered a breach.

'Geeky' Upbringing

Like the hackers he pursues, Kramer has spent his life fiddling with technology. As a youth, he worked on mainframes and sold video games.

"I grew up very geeky," Kramer said in an interview from the offices of Imperva Inc., a maker of security software for business applications where he serves as chairman and chief executive officer. "I'm also a very competitive person, whether it's on the basketball court or managing a business."

Kramer's tech savvy and competitive streak helped land him in one of Israel's elite military-intelligence departments: the 8200 intelligence unit, a group tasked with decrypting online information and gathering data.

"You have certain units like 8200 which help produce people like Kramer because they're exposed to cutting-edge technology," said Saul Singer, co-author of the book "Start-up Nation," which tells the story of how Israel became a hotbed for tech companies. "The army is a natural breeding ground."

Hacker Wars

Eighteen-year-olds serving in the 8200 unit confront the world's hackers, just like veteran staffers at global intelligence agencies such as the U.S. National Security Agency. That environment instilled the confidence needed to solve complex problems, Kramer said.

"The army gave me tools to believe I can do quite a lot of things," he said. "It made us take for granted things like starting a security company."

After his early success with Check Point, Kramer kept building and financing companies that also went public. Imperva raised $90 million in its IPO in 2011. Another Kramer-backed startup, Palo Alto Networks Inc., raised more than $260 million in its stock offering the following year. In 2013, International Business Machines Corp. bought Trusteer Inc., a security-software maker where Kramer was an investor and director, for more than $800 million.

At the same time, Kramer has missed some opportunities. After the dot-com bust in the early 2000s, he sold most of his stake in Check Point, missing a rebound in the shares over the next decade. He also regrets not investing in FireEye Inc., a security company whose stock has more than tripled in the past 12 months.

Seeking Profits

His current crop of companies aren't yet profitable. Imperva lost an estimated $14.4 million last year, according to analyst estimates compiled by Bloomberg. Palo Alto Networks, meanwhile, has lost money for five of the last six years.

"These are companies in the process of investing in sales, marketing, and research and development," said David Kaplan, a Tel Aviv-based analyst at Barclays Plc. "It's not atypical for growing companies to struggle with growth in the beginning. Other companies in this space, such as Check Point, are now making lots of money."

Netanyahu, seeking to foster Israel's technology industry, formed the National Cyber Bureau in 2012 to help the military, universities and businesses collaborate. Startups with Israeli roots often set up headquarters in California's Silicon Valley: Imperva is based in Redwood City, while Palo Alto Networks is located in Santa Clara. Still, Israeli engineers typically remain integral to research and development.

Defense Contractors

Israel's military contractors -- including Elbit Systems Ltd., Rafael Advanced Defense Systems, Israel Aircraft Industries International Inc. and Israel Military Industries Ltd. -- also have created cybersecurity departments over the past year, according to a report from TheMarker.

At a conference last month for global technology leaders in Davos, Switzerland, Netanyahu said Israel "is interested in sharing with the world the considerable know-how that we have accumulated in protecting industries from technology-based attacks."

In the past three years, Israel's cybersecurity field has grown from a few dozen companies to more than 220 and raised more than $400 million, according to the Tel Aviv-based IVC Research Center. Twenty multinational companies now operate online-security development centers in Israel, half of which were established since 2011.

'Bad Guys'

"There's higher need for innovation in security than there is in enterprise software or networking," Kramer said. "The bad guys continue to innovate, so there's need for constant innovation on the vendor side."

A weightlifting champion in his youth, Kramer typically comes to work in jeans, sneakers and a polo shirt. His Tel Aviv office is still sparsely furnished after a recent decision to move back to Israel from California with his family.

His latest investments include Lacoon Mobile Security, which protects mobile phones from cyber-espionage, and WatchDox, a maker of software for securing documents on mobile devices and the cloud.

"He's got a very strong personality and can identify a diamond in the rough," said Steve Krausz, a general partner at Menlo Park-based U.S. Venture Partners, which invested in Trusteer. "There is a uniqueness about Israeli entrepreneurs in terms of their toughness and their ability to go very far on very little money."

(BN) SAP Joins Atos to Target State Cloud Deals Amid Spy Threats

(Bloomberg ) SAP AG (SAP) and Atos are accelerating an effort to help European governments protect citizens' data, in the biggest push by the region's software providers to counter spying threats since leaks about the U.S. National Security Agency's data-collection programs.

The German and French technology companies are working with the European Union to define standards for Web-based programs and data-storage services, SAP co-Chief Executive Officer Jim Hagemann Snabe said in an interview. The aim, backed by European Union Digital Agenda Commissioner Neelie Kroes, is to come up with labels that signal to authorities which services and programs are safe, potentially spurring demand, he said.

SAP and Atos are vying with Microsoft Corp. (MSFT), Oracle Corp (ORCL) and International Business Machines Corp. (IBM) as the market for government cloud contracts -- orders to handle services and data accessed over the Web -- is forecast to double to more than $100 billion in three years. Governments are stepping up information-technology investments amid revelations about U.S. spying and increasing frequency of hacking incidents.

"The political side has grown massively aware of the opportunity of cloud but also the risks associated with cloud," Snabe said last week at SAP's headquarters in Walldorf, Germany. "We're working with the EU Commission, but also the United States and other countries to try and define what we believe are the principals for a trusted cloud."

European Cloud

The European effort for standards seeks to go beyond existing nation-bound projects touting safe cloud services. The goal is to avoid the restrictions that could come from a country-per-country approach, a representative for Bezons, France-based Atos said.

While reports about spying by the NSA, leaked by former government contractor Edward Snowden, have prompted some consumers and businesses to switch providers for Internet services like e-mail and remote storage of files, governments have yet to respond with major changes to their information-technology contracts.

Snabe and Atos CEO Thierry Breton are members of a committee called the European Cloud Partnership, which advises the European Commission on cloud strategy. Other members include Ericsson AB CEO Hans Vestberg, Inc. Chief Technology Officer Werner Vogels and Matthew Key, head of Telefonica SA's digital unit.

The companies are seeking a competitive advantage in the race for contracts, betting the Europe-wide effort for cloud standards will encourage state spending on computer services.

'Maintain Trust'

"The public sector holds a huge amount of sensitive data on people," said Neville Cannon, an analyst at Gartner Inc. "It's absolutely vital for the public sector to maintain trust and confidence. Some of it has been eroded because of the NSA issues."

SAP rose 1.6 percent to 57.70 euros at 9:46 a.m. in Frankfurt. Atos slipped 1.2 percent to 65.08 euros in Paris.

European concerns about data security heightened last year as documents leaked by Snowden revealed spying activities targeting companies, European Union institutions and governments. SAP and Atos (ATO), which had discussed the partnership before the leaks began in June, have intensified work since, according to two people familiar with the matter.

Global spending on cloud services by governments will grow to $107 billion in 2017 from $47.4 billion last year, researcher IDC predicted in September. Local authorities, though they handle sensitive data about citizens and companies, often lack the technical expertise to help them cope with a rising number of computer threats and attacks.

Privacy Rules

A lot of the data held by governments, especially public and less sensitive information, could be stored by cloud-services providers, making it easier to access and analyze it, said Gartner's Cannon. Military or intelligence data won't be stored in the cloud, he said.

Diverging international rules on data privacy have put the world's Internet companies into a position where they may have to violate rules in one region if they want to comply with demands in another to allow access to data.

"We're helping the European Commission avoid rules for the cloud per country -- we think that's wrong," Snabe said.

The creation of single European standards for cloud services would be a boon for local service providers, EU's Kroes said in a blog posting on Nov. 14.

"We should not put up barriers within our single market," Kroes said. "Such barriers if anything would limit European leadership, so we continue to rely on solutions from overseas."

More organic food => harsher moral judgements.

A recent research paper on the influence of organic foods shows the "moral licensing" effect:
After viewing a few organic foods, comfort foods, or control foods, participants who were exposed to organic foods volunteered significantly less time to help a needy stranger, and they judged moral transgressions significantly harsher than those who viewed nonorganic foods.

(Source: Kendall J. Eskine. Social Psychological and Personality Science 2013 4: 251 originally published online 15 May 2012 DOI: 10.1177/1948550612447114).

People feel morally superior when they have even an unconscious perception of doing good things (eating organic, being "green," describing self in positive terms, etc.). There seems to be a trade-off between doing something prosocial now and anti-social later; as if we have limited "goodness" resources in our minds.

Another paper on the effects of green purchasing concludes:

...people act less altruistically and are more likely to cheat and steal after purchasing green products than after purchasing conventional products. ( Source: Do Green Products Make Us Better People? Nina Mazar and Chen-Bo Zhong Psychological Science 2010 21: 494 originally published online 5 March 2010 DOI: 10.1177/0956797610363538 )

tags: trade-off, psychology, social

(BN) Winklevosses’ Lawyer in Talks With SEC Over Bitcoin ETF

(Bloomberg ) The lawyer who drafted Cameron and Tyler Winklevoss's plan for an exchange-traded fund investing in the virtual currency Bitcoin said she is "in dialogue" with regulators over revising the plan.

An amended version of the proposal for the Winklevoss Bitcoin Trust, first filed with the U.S. Securities and Exchange Commission on July 1, will probably be submitted within two weeks, Kathleen H. Moriarty, a partner at Chicago-based law firm Katten Muchin Rosenman LLP, said in a Jan. 28 interview in Hollywood, Florida.

The Winklevoss twins, who claimed Mark Zuckerberg stole their idea for a social-networking website to start Facebook Inc. (FB), are seeking to open the first ETF tracking a virtual asset. More than 1,500 ETFs in the U.S. manage about $1.7 trillion, investing chiefly in stocks, bonds and commodities.

Approval for a new type of ETF can involve several rounds of comments from regulators, and multiple resubmissions of the application, said Moriarty. The approval process for the Bitcoin ETF is "progressing nicely and might occur at the end of 2014," she said.

The Winklevosses owned about $10 million in Bitcoins, or 1 percent of the outstanding amount, when they filed their initial application.

Bitcoin is a software protocol for issuing and moving money across the Internet. It has gained traction with merchants selling everything from Sacramento Kings basketball tickets to kitchen mixers on to illegal narcotics. Created five years ago by a person or group using the name Satoshi Nakamoto, the value of Bitcoins has varied. The CoinDesk Bitcoin Price Index valued the currency yesterday at $837.51.

Illicit Goods

Regulators and law-enforcement officials have expressed concern that virtual currencies could facilitate money laundering and sales of illegal goods. On Jan. 27, federal prosecutors indicted a prominent figure among Bitcoin entrepreneurs, Charlie Shrem, for alleged money laundering linked to Silk Road, a Bitcoin-driven website allegedly used for buying drugs and other illicit goods.

Shrem has denied the charges through his lawyer. After closing the site in October, authorities said their probe is "ongoing."

ETFs, unlike mutual funds, issue shares that trade on an exchange like a stock. They typically track an index. 

(BN) Twitter, Lilly, Chicago Bears: Intellectual Property

(Bloomberg ) Twitter Inc. (TWTR), the microblogging service that went public last year, agreed to buy 900 patents from International Business Machines Corp. (IBM) to gain access to new technology and build a defense against infringement suits.

The agreement, signed in December and announced Jan. 31, also resolves a dispute that prompted IBM to write to San Francisco-based Twitter last year about possible infringement of at least three patents.

Twitter had nine patents and 95 pending applications before its initial public offering in November, far fewer than other leading technology companies.

IBM, which has received the most U.S. patents of any company for 21 straight years, has made deals with patent-light technology firms before.

The Armonk, New York-based company has sold patents to Google Inc. (GOOG) to aid the Android software maker's battle with rivals over smartphone technology. A sale of 750 patents to Facebook Inc. helped the social-networking company settle a lawsuit with Yahoo! Inc.

Lilly Says Insulin Glargine Doesn't Violate Valid Sanofi (SAN) Patents

Eli Lilly & Co. responded to a patent-infringement lawsuit filed by Sanofi-Aventus U.S. LLC over the experimental insulin glargine, saying in a statement that its application for approval by the U.S. Food and Drug Administration doesn't infringe any claim of any of the patents at issue.

Lilly issued the statement Jan. 31, one day after Sanofi filed the patent suit in federal court in Delaware.

The case is Sanofi-Aventis US LLC v. Eli Lilly & Co (LLY), 14-cv-00113, U.S. District Court, District of Delaware (Wilmington).


Jack Wills's Pheasant Trumps House of Frasier's Pigeon Trademark

Jack Wills Ltd., a U.K. clothing company that targets college-age customers, prevailed in a trademark lawsuit against Iceland-based Mundur ehf's House of Frasier, the U.K.'s Express newspaper reported.

The dispute was over marks featuring fancifully attired birds: a pheasant in a top hat for Jack Wills and a bike-riding pigeon in a bowler for House of Fraser, according to the newspaper.

London's High Court ruled that the public was likely to confuse the two, the Express reported.


Six Super Bowl Champion Bears Sue Over Rights to Song, Video

Six members of the Chicago Bears squad that won the National Football League's 1986 championship sued Renaissance Marketing Corp., claiming the company failed to give needy families the royalties collected for the team's "Super Bowl Shuffle" song and video.

In a complaint filed in Illinois state court Jan. 31, the players allege that the song was always intended to be used to raise funds for charity.

The case is Dent v. Renaissance Marketing Corp., 2014-L-001003, Illinois Cook County Law Division.

Trade Secrets/Industrial Espionage

BP Defeats Trade Secret Claim Over Gulf Oil-Spill Well Cap

BP Plc (BP/) fended off a trade-secrets claim brought by a Florida resident who said he submitted an idea on how to cap the Gulf of Mexico well that blew up in April 2010, triggering the biggest U.S. offshore oil spill.

U.S. District Judge Steven D. Merryday in Tampa, Florida, said in a Jan. 23 order dismissing the case that John Laing failed to demonstrate that he made reasonable efforts to protect the secrecy of his idea or that there was anything in writing to show a contract had been made between him and the London-based oil company.

The judge gave Laing until Feb. 10 to amend his complaint.

The case is Laing v. BP Exploration & Production Inc., 13-cv-01041, U.S. District Court, Middle District of Florida (Tampa).

Cosmetics Makers Seek to Avoid Chemical Disclosures, Group Says

Women's Voices for the Earth, a Montana-based environmental advocacy group, released a list of cosmetics companies it says are using trade-secrets claims to avoid listing the chemical constituents of 1,500 products in California's Safe Cosmetics Program Database.

Among the 22 companies seeking trade-secret status are Japan's Shiseido Co. (4911), Colgate-Palmolive Co. (CL) and Henkel AG's Dial Corp., according to the group's statement.

(BN) Talking Cars to Prevent Wrecks Get U.S. Rules

(Bloomberg ) U.S. regulators will take a step toward making talking cars a reality today, as Transportation Secretary Anthony Foxx is expected to propose standards for vehicle-to-vehicle communications that could prevent crashes.

The National Highway Traffic Safety Administration scheduled a news conference with the agency's acting administrator, David Friedman, and Foxx at noon Washington time.

Technology companies including Cisco Systems Inc. (CSCO) are among those vying to build the architecture of the so-called Internet of Cars. Google Inc. and Tesla Motors Inc. are among companies looking at employing automated systems that could be precursors to self-driving cars.

NHTSA, the U.S. auto-safety regulator, released its first draft of a policy last May that encouraged development of technologies that could be components of autonomous vehicles. It conducted a pilot project in Ann Arbor, Michigan, to test short-range communication technologies that it has said could prevent, or reduce in severity, as many as 80 percent of crashes involving non-impaired drivers. About a third of U.S. highway fatalities are alcohol-related.

David Strickland, then NHTSA's administrator, said in May that the agency was looking at whether to regulate crash-imminent braking, a technology featured in a number of luxury models that applies brakes automatically if sensors indicate a crash is about to occur.

Vehicle-to-vehicle systems would go a step beyond such systems by allowing communications to take place between cars, or between a car and the road.

Senate Commerce Committee Chairman Jay Rockefeller, a West Virginia Democrat, raised concerns in May that the communications advances being discussed could make cars vulnerable to hacking.

Sunday, February 02, 2014

(BN) McDonald’s Seeks to Out-Latte Starbucks in Coffee War

(Bloomberg ) McDonald's Corp. (MCD) is counting on coffee to give sagging U.S. sales a jolt.

One of the chain's top priorities is boosting "coffee-driven visits," according to a document laying out the company's 2014 to 2016 U.S. strategy. In a Jan. 28 memo, U.S. operations chief Jim Johannesen and U.S. brand chief Kevin Newell exhorted franchisees to deliver "a gold-standard cup of coffee with every visit." Earlier this month, in a webcast for restaurant owners, McDonald's vowed to become the "envy" of rivals and said Starbucks Corp. (SBUX) was leading the "coffee wars."

McDonald's is battling fast-food chains, coffee sellers and even convenience stores hawking breakfast as cash-strapped Americans eat out less. Earlier this month, the world's largest restaurant chain said U.S. same-store sales fell 1.4 percent in the fourth quarter; profit barely budged.

The ramped-up coffee effort comes almost five years after the U.S. debut of the McCafe menu and strategy, which hasn't lived up to its original intent. Initially, the chain planned to transform thousands of restaurants into Starbucks-style cafes painted in earth tones and offering free Wi-Fi. While drip coffee has won a following, the company's hot espresso drinks haven't caught on and many franchisees balked at remodeling costs and buying $13,000 espresso machines.

"McDonald's is trying to look and feel more like Starbucks," said Howard Penney, managing director at Hedgeye Risk Management LLC, who has covered the industry for 20 years. "It's actually hurting them, not helping them" because the chain's competitive advantage is food not beverages and because making complicated coffee drinks slows down service.

Midday Struggles

In the webcast, the Oak Brook, Illinois-based company drew attention to struggles attracting diners in the middle of the day, when Starbucks is starting to get traction with a new line of baked goods. McDonald's comparable-store sales in its U.S. central division fell 1.7 percent at lunch last year through November, the webcast shows. Snack and dinner sales were down in that time, too, while breakfast sales rose 1.6 percent.

McDonald's shares gained 10 percent last year, compared with a 46 percent surge for Starbucks. McDonald's fell 0.3 percent to $93.94 at 9:31 a.m. in New York, while Starbucks slipped 0.7 percent to $73.34.

"As always, our priority is to provide our customers a great restaurant experience," Lisa McComb, a McDonald's spokeswoman, said in an e-mail. "Serving an exceptional cup of coffee along with great-tasting food has been, and will continue to be, a strong area of focus for us."

She declined to provide details of the renewed coffee push and said "stay tuned."

Overseas Foothold

In 2009, McDonald's called McCafe its largest U.S initiative since the Egg McMuffin's 1970s debut. So far, the strategy has fared better outside the U.S., in countries where McDonald's got a foothold before Starbucks arrived and expanded.

In Australia, where the company introduced McCafe in 1993, McDonald's sells sweets including apricot danishes and banana bread to complement its espresso drinks. In Europe, there are about 1,600 McCafe locations, typically separate areas inside restaurants that sell specialty coffees, desserts and snacks.

While McDonald's tried to mimic that success in the U.S., most U.S. stores weren't big enough or designed to have separate counters and display cases for coffee and bakery items.

"They basically now just hang a sign from the ceiling that says 'McCafe' over the espresso machine," Penney said. "It was rolled out very differently than it was first imagined."

Starbucks Echo

About two years ago, McDonald's took a page from Starbucks and began selling seasonal hot coffee beverages, including peppermint mochas in the U.S. In another Starbucks echo, McDonald's introduced pumpkin-spice lattes last year. This week the chain rolled out a new drink: McCafe chocolate-covered strawberry frappes, to be sold until late February. In Chicago, a medium latte from McDonald's sells for about $2.89, whereas the same-size drink from Starbucks is $3.65.

Terry Smith, who owns three McDonald's stores in Burlington County, Vermont, says Americans typically don't think of McDonald's for "specialty hot beverages -- the lattes, the hot mochas, the espresso drinks." Still, once they get a taste, they become "addicted," he said. Smith is glad the company is putting more emphasis on breakfast and stepping up its marketing of the McCafe brand.

A new advertising campaign encourages diners to "Make the most of breakfast with McCafe." The chain recently added drawings of red coffee beans and such slogans as "Smooth" and "Good Days Start Here" to its hot-beverage cups. McDonald's is also selling packaged ground and whole-bean coffee in grocery stores this year to spread the word that the the company is as much about java as burgers and fries.

Impulse Purchase

"By selling coffee in grocery stores and in other outlets, we're marketing the brand so a person is reminded to come into a McDonald's restaurant," Chief Executive Officer Donald Thompson said during a Bloomberg event in Chicago last year. "Coffee is an impulse purchase largely so we want to make sure we can capture that traffic."

In the U.S., coffee and snack-shop sales are projected to outpace that of fast-food chains, according to reports from researcher IBISWorld Inc. Fast-food restaurant revenue will increase 2.1 percent this year and 2.2 percent in 2015, compared with gains of 4.1 percent and 2.9 percent, respectively, for the coffee and snack category, the data shows.

Pushing coffee is "probably a good idea if they can get their customer to buy more of it," said Peter Saleh, a New York-based analyst at Telsey Advisory Group. "I don't think they're going to be attracting the Starbucks customer to go there -- I really don't."