(BN) Dow, Cadila, Lancome, Wendy’s, Sinovel: Intellectual Property

(Bloomberg ) Akzo Nobel NV (AKZA) accused Dow Chemical Co. (DOW), the largest U.S. chemical maker, of misusing confidential information to seek two patents for coatings technology.

Dow entered a development agreement with a U.S. unit of Amsterdam-based Akzo in 2010, ended the agreement the following year, and in 2012, without Akzo's permission, said it would file the patent applications, according to a lawsuit filed June 25 in Delaware Chancery Court in Wilmington.

By using confidential information, Midland, Michigan-based Dow is responsible for wrongly "usurping to itself and for its own benefit intellectual property entrusted to it by Akzo," according to the complaint.

Akzo is seeking a ruling that Dow violated the contract, an order forcing Dow to sign over rights to the inventions and an award of unspecified damages and legal fees.

"Dow is aware of the new complaint," Nancy Lamb, a company spokeswoman, said in an e-mailed statement. Dow "believes it has acted in compliance with terms of the referenced joint development agreement" and will fight the lawsuit, she said.

The case is Akzo v. Dow, CA8666, Delaware Chancery Court (Wilmington).

Cadila Sued by Alpex Over Patent for Obesity Drug Suprenza

Cadila Healthcare Ltd. (CDH) a generic-drug maker based in Ahmedabad, India, was sued by Alpex Pharma SA for infringing a U.S. patent for the obesity drug Suprenza.

Alpex, based in Mezzovico, Switzerland, contends Cadila, doing business as Zydus Cadila, wrongly applied to the U.S. Food & Drug Administration to sell low-cost copies of the medicine before patent 6,149,938 expires in 2018, according to a lawsuit filed June 26 in federal court in Wilmington, Delaware.

Unless blocked by a judge, premature sales of the generic drug in the U.S. will cause "substantial and irreparable harm" to Alpex, the company said in court papers.

Sujatha Rajesh, a Cadila spokeswoman, didn't immediately respond to an e-mailed request for comment on the lawsuit.

The case is Alpex v. Zydus, 13-cv-01143, U.S. District Court, District of Delaware (Wilmington).

Trademark

Lancome's 'La Vie Est Belle' Trademark Rejected by Taiwan Court

Lancome Parfums Et Beaute Et Cie. SNC, the Paris-based parfumerie, won't be permitted to register "La Vie Est Belle" as a trademark in Taiwan, the Focus Taiwan website reported.

The company had filed an appeal of the Nov. 2011, rejection of its trademark application by Taiwan's Ministry of Economic Affairs, according to Focus Taiwan.

Taiwan's Supreme Administrative Court rejected the appeal, saying the phrase, which translates to "Life Is Beautiful," isn't distinctive enough to qualify for trademark protection, Focus Taiwan reported.

Lancome had hired actress Julia Roberts to promote its La Vie Est Belle brand, and argued unsuccessfully that the mark was totally distinctive because it represented her own wonderful life and perfect marriage, according to the news website.

Wendy's Sued Ohio Dairy Over Claims 'Frosty' Mark Is Infringed

Wendy's Co. (WEN), the Dublin, Ohio-based fast-food chain, sued an Ohio-based dairy company for trademark infringement.

According to the complaint file June 21 in federal court in Columbus, Ohio, United Dairy Farmers Inc. of Cincinnati, Ohio, is accused of infringing Wendy's "Frosty" trademark and the trade dress used for that product.

Wendy's said it has used the "Frosty" mark since 1969 for a product by the same name that is a cross between a milkshake and soft-serve ice cream. The product, which contains a proprietary cocoa formula, hasn't changed significantly since it was first placed on the restaurant chain's menu.

The company objects to the Frosties product produced by the dairy company. According to court papers and Wendy's statements, the United Dairy Farmers' product uses a red and yellow packaging that is confusingly similar to the containers in which the Frosty is served.

Wendy's claims the infringement is deliberate and is aimed at causing consumers to assume falsely that an affiliation exists between the two companies' products.

United Dairy Farmers didn't respond immediately to an e-mailed request for comment.

Wendy's asked the court to order United Dairy Farmers to halt the infringing actions and to engage in corrective advertising to correct what Wendy's says is confusion in the marketplace. The company requests awards of the dairy company's profits related to the alleged infringement, together with money damages, litigation costs and attorney fees.

The case is Wendy's International Inc., v. United Dairy Farmers Inc., 2:13-cv-00596-ALM-NMK, U.S. District Court, Southern District of Ohio (Columbus).

Trade Secrets/Industrial Espionage

China's Sinovel Charged by U.S. With Stealing Trade Secrets

Sinovel Wind Group Co., a Chinese wind-turbine company, was charged with stealing trade secrets from its former U.S. partner, a case of industrial espionage that may heighten tensions in U.S.-China relations in the wake of the Edward Snowden affair.

U.S. prosecutors secured an indictment of the company and two of its executives in federal court yesterday in Madison, Wisconsin. Also charged was Dejan Karabasevic, who pleaded guilty in Klagenfurt, Austria, to stealing source code for the turbine controllers made by American Superconductor Corp. (AMSC), his former employer. The company lost more than $1 billion in market value after the theft.

The timing of the indictment is likely to give it prominence in U.S. dispute with China over economic espionage. That conflict has only been inflamed by Snowden's disclosures of U.S. computer-based spying and China's decision to allow the ex-National Security Agency contractor to fly to Russia from Hong Kong, where he had fled.

"My 5-year-old understands that this is wrong," AMSC Chief Executive Officer Daniel McGahn said by telephone.

The indictment is the latest development in a legal struggle between AMSC, a maker of small industrial computers that fit inside wind turbines, and the company that was formerly its largest customer. AMSC, based in Devens, Massachusetts, is seeking more than $1.2 billion in damages from Sinovel in Chinese courts, accusing Sinovel of putting the stolen source code in more than 1,000 turbines that it sold in China.

Prosecutors allege that Sinovel, which was charged with conspiracy, theft of trade secrets and fraud, cheated AMSC out of more than $800 million.

The case is U.S. v. Sinovel Wind Group Co. (601558) Ltd., 13-cr-00084, U.S. District Court, Western District of Wisconsin (Madison).

Lofgren Introduced Private Trade-Secret Section to EEA

Democratic Representative Zoe Lofgren of California introduced legislation to allow individuals to recover damages under the Economic Espionage Act.

HR2466 would give "any person who suffers injury" under a violation of this act to purse a civil case against the violator in order to be compensated. Under this legislation, a case must be brought within two years of the date of the action or the discovery of damage.

The legislation doesn't cover reverse engineering. In fact, it specifically states that those who obtain information without authorization who have worked backward "from a lawfully obtained known product or service to divine the process that aided its development or manufacture" may not be charged.

(BN) Microsoft Sues U.S. Customs for Failed Google Phone Ban

Microsoft Corp. (MSFT) accused U.S. Customs officials of refusing to follow a trade agency's order to block imports of phones made by Google Inc. (GOOG)'s Motorola Mobility unit in a lawsuit that seeks to alter how such cases are handled.

The U.S. International Trade Commission in Washington issued the import ban in May 2012 after deciding that Motorola Mobility devices infringed a Microsoft patent for a way mobile phones synchronize calendar events with other computers. Microsoft's lawsuit, filed yesterday in Washington, says that order isn't being enforced.

U.S. Customs and Border Protection, after having secret meetings with Google, continued to let the Motorola Mobility mobile phones enter the country even though Google has done nothing to remove the feature at the heart of the ITC case, Microsoft said in the complaint. The case illustrates what Lexmark International Inc. (LXK) and Lutron Electronics Co. in May called an "increasingly ineffective and unpredictable enforcement" of import bans imposed by the trade agency.

"Customs has a clear responsibility to carry out ITC decisions, which are reached after a full trial and rigorous legal review," Microsoft Deputy General Counsel David Howard said in a statement. "Here Customs repeatedly ignored its obligation and did so based on secret discussions."

Motorola Mobility convinced the agency that the order didn't apply to syncing through Google rather than Microsoft servers, and to give it a grace period to allow changes to take effect. Both of those requests had previously been rejected by the ITC, according to Redmond, Washington-based Microsoft.

Google Response

"U.S. Customs appropriately rejected Microsoft's effort to broaden its patent claims to block Americans from using a wide range of legitimate calendar functions, like scheduling meetings, on their mobile phones," Matt Kallman, a Google spokesman, said in an e-mailed statement. "We're confident that the court will agree."

Jenny Burke, a spokeswoman for Customs, said the agency doesn't comment on pending litigation.

The complaint filed yesterday in Washington also named Homeland Security Secretary Janet Napolitano, who oversees the Customs agency. She announced yesterday she was stepping down to head the University of California system.

The ITC order is in effect until Microsoft's patent expires in April 2018. An appeal in the case is scheduled to be heard Aug. 6 in Washington.

'Secret Presentations'

Meetings between Mountain View, California-based Google and Customs were held in secret in April, with Microsoft not privy to their existence until after the June 24 Customs decision allowing the continued importation of the phones, according to Microsoft's filings asking the court to halt the Motorola Mobility shipments.

"The only conclusion that can reasonably be drawn from CBP's pattern of conduct is that CBP will not enforce the commission's exclusion order absent a court order compelling it to do so," Microsoft said in the filing. "CBP has repeatedly allowed Motorola to evade that order based on secret presentations that CBP has refused to share with Microsoft."

The ITC's job is to protect U.S. markets from unfair competition, including infringement of patents or theft of trade secrets. It's become a key forum for disputes between smartphone manufacturers.

Once the import bans are ordered, it's common for both patent owners and importers to lobby Customs and neither side is told what the other is saying for fear of exposing trade secrets, lawyers involved in ITC cases said in March.

Apple, Samsung

A ban on some older models of Apple Inc. (AAPL)'s iPhone is scheduled to take effect Aug. 5 unless it's overturned by President Barack Obama or put on hold pending appeal. The models were found to infringe a Samsung Electronics Co. (005930) patent for a way data are transmitted. On Aug. 1, the agency is scheduled to announce whether it will order an import ban on some models of Samsung's phones based on patent allegations filed by Apple.

The trade agency is compiling information on how well its orders are being enforced, and Obama last month called for a review of ITC and Customs procedures. In their joint letter to the ITC, Lexmark and Lutron said the "current problems with enforcement of orders requires immediate attention."

Criticism of Customs comes in large part because an agency in charge of protecting the U.S. border from terrorists and unauthorized foreigners also has to analyze increasingly complex electronics and compare them to patents that are often written in jargon only specialists can understand.

'Red Flags'

"They want to focus their efforts on terrorism, and the issues related to intellectual property is not their concern," said patent lawyer Robert Stoll of Drinker Biddle & Reath LLP in Washington.

Past surveys had no "huge red flags" of the process in part because they often involved less complicated products, said former ITC Chairwoman Deanna Tanner Okun, who left the agency last year after 12 years and is now with Adduci Mastriani & Schaumberg in Washington. The commission has the authority now to take a greater role to address disputes about how the import bans are being enforced, she said.

"Both agencies are working with outdated policies and procedures that need to be changed to make the commission orders effective," she said in an interview.

It's not just patents that companies are complaining about with regard to Customs. The National Association of Manufacturers, in a July 2012 letter to the Senate Finance Committee, supported legislation that would boost customs enforcement of anti-dumping orders imposed by the ITC.

'Duty Evasion'

"Industries have continued to see increases in unlawful duty evasion," the manufacturers lobbying group wrote. "There are significant implications from continued duty evasion, including job losses."

Corning Inc. (GLW)'s Corning Gilbert, a manufacturer of coaxial cables for televisions, was shut out of the U.S. market for more than a year after Customs officials decided it was subject to a broadly worded order won by a competing company. Corning Gilbert had not been named in the complaint, and sued. A U.S. trade judge ruled last year that Customs had failed to conduct a proper analysis before blocking the Corning Gilbert imports.

Apple had to file an enforcement action after Customs allowed Taoyuan, Taiwan-based HTC Corp. (2498) to continue shipments of some of its mobile phones that had been found to infringe the iPhone manufacturer's patent for data-detection technology. The two companies settled their patent fights before that issue was heard.

Trade-off Q&A: better than optimal.

Tobias Enders (@TobEnders, one of my students in the Principles class at Stanford University CSP) emailed me a question about trade-offs in Scalable Innovation (Prologue, page xxii, figure 0.1).

In the book we argue that great innovations break trade-offs and do better than optimal. Tobias' question prompted me to explain briefly the figure. With his permission, I reproduce parts of our email exchange.

Question (Tobias):

You say that there is one optimum between in the middle between fuel efficiency and flexibility. From my understanding, the optimum can be anywhere on line that you have draw - depending on the preference of the customer. I.e. if you need more flexibility, you have to make a trade off on fuel efficiency and vice versa. I have used the same figure when I made a portfolio analysis for IBM some time ago (see fig below).

Answer (Eugene):

In your example, the customer locked into the optimized curve, either to the left or right, cannot get to a point where he has both high customization and high cost leadership. That is, the point on the left provides for high customization but low cost leadership; the point on the right does the opposite. A breakthrough would be a high-high combination, e.g. Google's large scale advertisement platform for search and other services (Company positioning).

The optimum on Fig 0.1 (Scalable Innovation, page xxii) applies when you want both fuel efficiency AND flexibility. In that case you end up with values somewhere in the middle of their respective ranges. Simply put, you can't have both high fuel efficiency AND high flexibility. 

Summary (Tobias): 

Got your point, Eugene.
If you want to have the best of 'both worlds' - i.e. fuel efficiency and flexibility - you end up [with neither, i.e.] in the middle of the line.

Google patent: If you don't skip ads you'll be watching them until we get tired showing them to you.

On July 2, 2013 USPTO issued to Google US Patent 8,474,713 "Targeted video advertising."

The patent covers a business model where a user can skip ads and the advertiser is charged only for the ads that actually get watched. In Claim 2 we read:

"...withholding display of a non-advertisement based video program to the user until the user has been shown a predetermined number of video advertisements without the user choosing to skip the displaying of one of the video advertisements."

Unlike in TV advertisement, video ads on the Internet will not stop if you just wait for them to stop. They will go on forever or until Google decides to stop them. As a result (since most services are personalized, claim 27) patient people will see tons of ads.

If you see an ad, skip it immediately!

(BN) Mail.ru Outshines Facebook in Russia With Monsters on Mobiles

(Bloomberg) Mail.ru Group Ltd. (MAIL) is reducing reliance on advertising revenue in Russia and plans to expand against Facebook Inc. (FB) by luring mobile users with a combination of online communication and entertainment.

While online games in the U.S. and Europe have historically been based on subscriptions, the Russian company follows a free-to-play model developed in Asia by operators including Tencent Holdings Ltd. (700), Dmitry Grishin, chief executive officer of Mail.ru, the country's largest social-network operator, said in an interview.

"We don't say: pay $20 or you can't go to the next level" of a game, Grishin said at Mail.ru's new 26-story headquarters in northern Moscow. "People can play for free, but they can purchase some extra features -- for instance, better protective ammunition in our military game 'Warface.' This model aligns interests of users and the company and at the end allows earning more money without coercion."

Mail.ru, controlled by Russian billionaire Alisher Usmanov, saw revenue from Internet value-added services, or IVAS, including sales of virtual gifts in social networks and extra features in games, surge 51 percent to $369 million last year. Mobile users often have phone accounts linked to their credit cards to pay for applications and this encourages spending. That makes IVAS even more important, said 34-year-old Grishin.

Virtual Gifts

"While advertising largely depends on economic booms and slowdowns, IVAS is a stable revenue stream," Grishin said. "It's a very sticky thing. When some holiday or someone's birthday is coming, people are buying virtual gifts. It's pretty much the same culture as you have offline."

Mail.ru plans to boost total sales by as much as 28 percent this year. In 2012, revenue climbed 39 percent to about $680 million as online advertising rose 23 percent to $239 million.

"Our 'communitainment' strategy works really well for mobile devices as that's what people do on them -- they interact with each other and play games," Grishin said. "For many Internet companies it's a problem that people don't use their product on mobile."

Science vs Sports Entertainment

The 2007 Nobel Prize Lecture, by Roger B. Myerson, was presented in a small auditorium that was almost empty.

On the other hand, the 2013 NBA finals were attended by tens of thousands of people and televised to millions.

 I wonder why...

(BN) Oracle Mends Fences With Microsoft, Salesforce in Cloud Push

(Bloomberg ) Oracle Corp. (ORCL) is casting aside longstanding rivalries with Microsoft Corp. (MSFT) and Salesforce.com Inc. (CRM), with partnerships to bolster its cloud-computing services aimed at businesses moving their software online.

In one alliance, Microsoft's Windows Azure cloud-computing service will run Oracle's database software, Java programming tools and application-connecting middleware, Microsoft Chief Executive Officer Steve Ballmer and Oracle co-President Mark Hurd said. Under a separate nine-year pact, Salesforce is buying Oracle hardware and software to power its applications.

"When customers choose cloud applications they expect rapid low-cost implementations," Ellison said in a statement today announcing the Salesforce partnership. "They also expect application integrations to work right out of the box -- even when the applications are from different vendors."

Oracle is mending fences with former foes as it shifts focus to subscription-based online software rather than programs installed on customers' own machines, a transition forced in part by nimbler cloud-computing rivals including Salesforce. Microsoft is competing with Google Inc. (GOOG) and Amazon.com Inc. (AMZN) as it seeks new sources of revenue from online services, as demand for personal computers slumps.

"It's about time, and we're really glad to have the chance to work in this much newer and more constructive way with Oracle," Ballmer said. "The partnership has an immediate benefit to customers of every size and shape."

Compatible Software

Microsoft and Oracle's collaboration would lure customers seeking more technical compatibility between products. Oracle plans to support versions of its database and Java software that customers run through the online Azure service, and when using Microsoft's Hyper-V virtualization software, which lets servers run more efficiently, Hurd said. Oracle also will let customers use their current software licenses on Azure, he said.

Oracle's database, which will be upgraded later this year as a new version called 12c, competes with Microsoft's own SQL Server. Companies using Microsoft's Azure cloud service, which lets companies build and run programs online, will be able to put information into Oracle's database.

The alliance with Microsoft lets Oracle offer its customers the option of sticking with its database and middleware at a time when businesses are moving more of their software to cloud-computing services. Oracle reported on June 20 that fiscal fourth-quarter software license and subscription sales grew just 1 percent, less than analysts had projected.

Database Market

Oracle controlled 45 percent of the $28.2 billion worldwide database market in 2012, compared with 20 percent for Microsoft and 18 percent for International Business Machines Corp. (IBM), according to IDC.

Azure's main competitor is Amazon Web Services, in a growing area called infrastructure as a service, which lets companies rent computing power, storage and database software via the Internet. That's the fastest-growing part of the cloud market, according to Gartner Inc., which estimates sales in the market segment to surge by an average of 38 percent annually to $30.6 billion by 2017, from $6.17 billion last year.

Microsoft, which said in April that revenue from Azure and related software sales topped $1 billion annually, has pledged to match Amazon Web Services' prices.

'Platform Wars'

"This deal gives Microsoft clear competitive advantages against two of its top rivals," James Staten, an analyst at Forrester Research, said in a blog post. It bolsters Microsoft's efforts to compete with VMware Inc. (VMW), the market leader in virtualization software, and "gives Windows Azure near-equal position against Amazon Web Services in the cloud platform wars," he said.

Oracle also will make its version of the open-source Linux operating system available through Azure.

"The cloud is the tipping point that made this happen," Hurd said. "This made a lot of sense for both of us."

The two companies have a long history of competition stretching back to the dawn of personal computers in the 1970s. Oracle CEO Larry Ellison, who first publicized the alliance on his company's earnings conference call last week, used to deride Redmond, Washington-based Microsoft as a "convicted monopolist" after it was found guilty in federal court of illegally defending its Windows monopoly to squelch competition.

Trash Inspection

In 2000, Redwood City, California-based Oracle said it hired detectives to comb the trash of two organizations supporting Microsoft in its antitrust trial. Ellison added that he'd be happy to ship his garbage to Redmond for inspection.

Still, Microsoft and Oracle have cooperated before. Oracle's database also runs on Windows, and developers using Microsoft's Web services software can build applications using Oracle's software tools.

Ballmer said that the companies would continue to compete, and that much of their cooperation so far had been done out of public view. The very nature of cloud computing, in which software applications span multiple companies' infrastructure software and Web sites, meant that approach was no longer sufficient, he said.

"That behind-the-scenes collaboration is not enough. People wanted more from us," Ballmer said. "In the world of cloud, you've got to do that kind of partnership actively, not passively."

Past Detente

The announcement was reminiscent of a 2004 detente between Ballmer and former Sun Microsystems CEO Scott McNealy, who appeared onstage together at a San Francisco hotel to swap hockey jerseys, demonstrate interoperability between their products and announce a settlement to legal disputes between the longtime rivals.

The deal with Salesforce comes after CEO Marc Benioff was scratched from a speaking spot at Oracle's OpenWorld conference in 2011, leading Benioff to stage a mock protest before speaking at a nearby hotel. Benioff, who used to work for Ellison as an Oracle salesman, has been winning business from Oracle with online tools for customer management, marketing and human resources.

Salesforce, which already uses Oracle's database software to run its cloud service, committed to continued use of that product, Oracle's Java middleware, and its Exadata server computers. Salesforce will use Oracle's financial management and HR software internally, and the two companies' applications will share some data.

"Larry and I both agree that Salesforce.com and Oracle need to integrate our clouds," Benioff said.

Ellison also said last week that he planned an alliance with NetSuite Inc. (N) -- of which he's a partial owner -- to use the upcoming 12c database. NetSuite and Salesforce already run Oracle's database to power its applications.

(BN) Fish Tie Kremlin to New Owner of Facebook’s Russian Rival

(Bloomberg ) While Facebook Inc. (FB) founder Mark Zuckerberg's motto is "move fast and break things," his new Russian rival says his is "stay discreet and reel them in."

Ilya Sherbovich, who's helped craft deals for people close to Vladimir Putin throughout his career, is the biggest shareholder in VKontakte, the social network with four times more subscribers than Facebook in Russia. Unlike Zuckerberg, the 38-year-old investor doesn't yet use his company's product because he's less interested in connecting people around the world than he is in catching fish.

"My real passion is Atlantic salmon," Sherbovich said in interviews in April after his Moscow-based United Capital Partners bought 48 percent of VKontakte from co-founders Vyacheslav Mirilashvili and Lev Leviev for an undisclosed sum.

Sherbovich's love for fishing led to the 2006 purchase of Ponoi River Co., which operates Arctic fishing camps on the Kola Peninsula near the Barents Sea. His customers have included Sergei Ivanov, the former KBG spy who's now President Putin's chief of staff, and Prime Minister Dmitry Medvedev, whose photos with Sherbovich are featured on Ponoi's website. Former Vice President Dick Cheney and former Federal Reserve Chairman Paul Volcker have also been guests at Ponoi, where a week's lodging can exceed $13,000.

Those fishing trips and Sherbovich's tenure on the board of OAO Rosneft (ROSN), the state oil champion run by long time Putin ally Igor Sechin, suggest he's backed by a Kremlin that's keen to control the Internet the way it does television, according to Yevgeny Minchenko, an independent political analyst in Moscow.

'Ignite Strife'

"Of course the Kremlin wants loyal owners at VK," Minchenko said. "Putin's entourage knows the opposition could use VK's 50 million users to ignite political strife."

Case in point is Alexei Navalny, who emerged as a leader of the opposition during protests in Moscow in 2011 and 2012 that were organized via VKontakte, where he and his supporters have 300,000 followers. Those demonstrations, which peaked when tens of thousands of people took to the streets Feb. 4, 2012, are the largest Putin has faced since coming to power in 2000.

Navalny, 37, has since been put on trial for defrauding a state timber company out of about $500,000, charges that could lead to 10 years in prison. He denies any wrongdoing and links the prosecution to his politics. Navalny said VKontakte's popularity is partly tied to the maverick attitude of its creator and chief executive officer, Pavel Durov, who was 15 when Putin succeeded Boris Yeltsin in the Kremlin in 2000.

FSB Snub

"When the FSB demanded that Durov shut down our VK blog, Durov refused to do it," Navalny said in an interview in Moscow, referring to the Federal Security Service (SFDL), the main successor to the Soviet-era KGB. "Naturally, authorities are not happy about that."

Durov responded to the FSB by posting a photo of a panting German shepherd wearing a hoodie. Earlier, after billionaire Alisher Usmanov's Mail.ru Group Ltd., which owns 40 percent of VKontakte, offered to buy out Durov and his partners, Durov posted a picture of himself with his middle finger extended, calling it his "official answer to trash holding Mail.ru." Usmanov later ceded the voting rights of his stake to the 28-year-old Durov, who owns 12 percent of the company.

Zuckerberg, Durov

Durov and Zuckerberg, who is five months older, both opened their networks to the public at about the same time in 2006. Vkontakte, which is based in St. Petersburg, now has 78 million monthly users, including 46 million in Russia, according to researcher comScore Inc. Facebook, based in Menlo Park, California, has 818 million users, though just 11.7 million in Russia, comScore data show.

Less than two weeks before Durov's partners closed the sale to Sherbovich, police in St. Petersburg opened a criminal probe into Durov for allegedly being the driver of a car that injured a traffic cop. TV Rain, a channel focused on young adults, said the CEO left the country to avoid questioning. Investigators later dropped the case and fined Durov, who hasn't spoken publicly since the incident, about $30. VKontakte's spokesman, Georgy Lobushkin, said June 13 he wouldn't comment on the case or Durov's whereabouts.

Sherbovich, who joined Rosneft's board last year and owns about $50 million of the oil company's stock, said his VKontakte investment has nothing to do with politics and that he has no plans to seek Durov's dismissal.

Billionaire

"No one in the Kremlin, in the government or in the business community asked me to buy the VK shares," Sherbovich said. "There are no undisclosed third parties with ownership or control rights over our stake."

Neither Putin nor Rosneft had anything to do with the VK deal, according to Dmitry Peskov, Putin's spokesman, and Vladimir Tyulin, a spokesman for Rosneft. Natalya Timakova, Medvedev's spokeswoman, said that while the prime minister and Sherbovich are "acquainted" with each other, she isn't aware of any contact between the two about VKontakte.

Still, Sherbovich has gotten rich by serving the interests of officials and businessmen close to Putin. How rich, though, he declined to say. Three bankers who've worked with United Capital Partners said his personal fortune has risen about fivefold in the past six years to almost $1 billion. They asked not to be identified, saying the information is private.

Goldman Sachs

"Ilya's main advantage is that even though he knows a lot of senior officials, he never gets involved in politics," Nick Jordan, co-head of Russia for Goldman Sachs Group Inc., said in an interview in Moscow. "Unlike many Russian businessmen, he maintains complete confidentiality," said Jordan, who's known Sherbovich for more than a decade. "He simply executes orders and can be fully trusted."

Sherbovich entered the Plekhanov Academy of Economics in Moscow at the age of 16 in 1990, just as the Soviet Union was unraveling. His first job came two years later, after Iosif Bakaleinik, a friend of his father, arranged an interview at the International Finance Corp., a World Bank unit. Bakaleinik would later become chief financial officer of TNK, the oil company that formed part of BP Plc (BP/)'s Russian venture, TNK-BP, until Sechin's Rosneft bought it for $55 billion this year.

In 1995, Sherbovich joined United Financial Group, one of Russia's first brokerages, which had just been set up by U.S. investor Charles Ryan and former Finance Minister Boris Fedorov.

Gazprom Limits

Russia limited foreign ownership of OAO Gazprom (OGZD) at the time, so UFG and Sherbovich pioneered ways to capitalize on the growing demand for stock of the world's largest gas producer. Those limits created price disparities between local and foreign-listed shares that UFG and Sherbovich exploited using legal loopholes, said Vadim Melkumov, who worked then at UFG.

By 2001, UFG and its clients had accumulated more than 10 percent of Gazprom, enough to get its co-founder Fedorov elected to the board. UFG lobbied for greater transparency and efficiency and hired Gazprom's first outside auditor, efforts that were backed by Alexey Miller, the man Putin had just selected to replace Rem Vyakhirev, a Yeltsin appointee, as CEO.

Two years later, Deutsche Bank AG bought 40 percent of UFG for less than $70 million and renamed it Deutsche UFG. By then, Sherbovich had become the largest shareholder after Ryan and Fedorov, with about 20 percent. When Deutsche Bank exercised its option to buy the remaining 60 percent of UFG in 2006, it valued the company at about $1 billion, former colleagues said, asking not to be identified because the information is private. The deal earned Sherbovich more than $200 million, they said.

Yukos Offer

Sherbovich stayed on at Deutsche UFG as president, for another year, during which time he entered into the biggest corporate battle of the Putin era -- the dismantling of OAO Yukos, once the country's largest company by market value, after the jailing of its billionaire CEO Mikhail Khodorkovsky.

As Yukos, which had already lost its largest asset to the government over tax claims, jockeyed to avoid complete liquidation in 2006, Sherbovich sent a letter to then-Yukos Chairman Viktor Gerashchenko offering to buy what was left of the company, debt and all.

"We were seriously studying the bankruptcy situation," Sherbovich said. "We thought the assets could be worth more than the debt obligations so we sent the letter, but it didn't go anywhere."

He left Deutsche UFG in 2007 to start United Capital Partners with the money he earned from selling his stake.

Sherbovich's skills have been appreciated by senior officials, who last year asked him to become a director at three state-run companies -- Rosneft, OAO Transneft and Federal Grid Co. (FEES) He said he agreed, "but only for a year,'' which in the case of Rosneft lasted until June 20.

For now, Sherbovich plans to focus on increasing the value of his VKontakte stake, which Forbes Russia estimated at about $1 billion. He told state television April 29 that he's aiming to boost the value of the company as a whole to $10 billion within a decade.

That is, of course, unless he sells out first -- to anyone who can afford it.

"We would be ready to sell the stake at any moment at a good price, assuming someone makes a relevant proposal," Sherbovich said.

(BN) Lenovo Playing Games in China to Challenge Samsung Phones

(Bloomberg ) To offset falling PC sales and reduce its reliance on ThinkPad notebooks, Lenovo Group Ltd. (992) is adding a gaming service that the computer maker says can help it overtake Samsung Electronics Co. in smartphones in China.

Lenovo Game World will include social-networking features, software reviews and gameplay tips when it starts in the third quarter, offering popular titles like "Fruit Ninja" for devices such as the computer maker's Ideaphone K900 that run Google Inc. (GOOG)'s Android operating system.

Software and services underpin Chief Executive Officer Yang Yuanqing's push to sell more handsets as demand for personal computers slides. While Lenovo's app store has logged more than 1 billion downloads since it opened in 2010, the company is looking to Game World for an edge in the biggest market for handsets, where mobile-game sales of $1.6 billion this year will rise about 50 percent annually for the next three years, researcher Analysys International predicts.

Unlike the U.S., where Google and Amazon.com Inc. dominate sales of Android applications, China has hundreds of companies offering mobile software. Lenovo wants to set itself apart from that crowd with features like those available on Apple Inc. (AAPL)'s Game Center, such as global leader boards that let players see how they compare to the world's best.

"A mobile platform for entertainment is becoming more and more important in today's handset industry," said Ricky Lai, an analyst at Guotai Junan International Holdings Ltd. in Hong Kong. "The more fans Lenovo can get on their own platform, the more customers will want to use that kind of handset."

Air Hockey

Sales of mobile games in China will rise 55 percent to 9.6 billion yuan this year, Analysys forecast in a report last month. Users of mobile games will rise 30 percent to 280 million this year, Analysys says. While there is no comprehensive ranking of mobile application sellers in China, Lenovo's store is among the largest. China Mobile Ltd. (941), the world's largest wireless carrier, says its Mobile Market is the leading Chinese-language app store, with 600 million downloads last year. The company reported mobile gaming revenue of 869 million yuan ($142 million) for 2012.

Lenovo is expanding into smartphones, tablets, TVs and home entertainment systems such as the Horizon Table PC, a 27-inch touchscreen panel unveiled in January that lets multiple users play games like air hockey and Monopoly. The coffee table-sized Horizon, which uses Microsoft Corp.'s Windows 8 operating system, comes with accessories such as electronic dice and joysticks.

'Temple Run'

Lenovo plans to boost smartphone shipments 72 percent to 50 million units this year and start selling handsets in the U.S., CEO Yang said last month. With more than $3 billion in cash, Lenovo would consider acquisitions to help build its smartphone and software businesses, he said.

"Mobile devices are not just hardware," Yang said. "There's a combination of hardware, software, applications and content. We will further strengthen this area."

Reducing its reliance on ThinkPad personal computers is already paying off for Lenovo, which defied a slump in industry demand to post higher earnings last month. Net income jumped 90 percent to $127 million in the quarter ended in March, while global PC shipments fell 13.9 percent, according to researcher International Data Corp.

'Angry Birds'

Samsung buttresses its handset lineup with a Mandarin-language app store in China offering free downloads such as Tencent Holdings Ltd. (700)'s WeChat instant-messaging app and Rovio Entertainment Oy's "Angry Birds Star Wars" game. The site also sells games like "Where's My Water" and "Temple Run: Brave" for 6.08 yuan ($0.99) each.

Until recently, Android users haven't had a site like Apple's Game Center, which was introduced in 2010 with multiplayer games that include social features linking players. Google began offering similar functions last month with Google Play Game Services, but it hasn't been released in China. Google declined to say when it might be available there.

'Jetpack Joyride'

To mount its challenge to Samsung and Google, Lenovo teamed up with Shenzhen iDreamsky Technology Co., a software publisher backed by the investment arm of Lenovo's parent, Legend Holdings Ltd. IDreamsky has distribution rights in China to popular games such as "Temple Run 2," "Fruit Ninja" and "Jetpack Joyride."

Games need "deep localization" to make money in China, where few players are willing to pay for app downloads, according to Phil Larsen, chief marketing officer at Halfbrick Studios Pty, the maker of "Fruit Ninja." A key strategy is to add market-specific backgrounds, weapons and objects that give characters extra powers, which players pay extra for.

"China is so unique," Larsen said. "The business works totally differently."

Even if Lenovo can't get users in China to pay for app downloads, the game center can help the company strengthen its brand by creating a strong association between its handsets and the services that run on them, said Jean-Louis Lafayeedney, an analyst at JI Asia in Hong Kong.

"It is important to retain people on the hardware," Lafayeedney said. "So when they upgrade, they stay with Lenovo."

Misguided policies: Education, Skills, and Creativity.

Many economists and educators dismiss as odd cases when college dropouts like Bill Gates, Steve Jobs, Mark Zuckerberg, and others create incredibly successful businesses.

Nevertheless, a theory that accounts for the difference between education and skills would explain such successes. In fact, it appears that economists deliberately substitute education for skill because they can't measure the latter. Here's what Prof. Martha L. Olney says in her UC Berkeley lectures on US Economic History.

We can't measure (easily) skill, but we can measure educational attainment. [UC Berkeley. Economics 113, Spring 2013, Lecture 26. 8m 25s].

You can see from her slide that to improve the competitiveness of the US workers we need them to develop new skills (bullet 2), but since they cannot measure skill, economists advise for more education (bullet 3). That's how we get huge inflation in the education system.

How do things work out in education? Below are the results of a Gallup poll about skill attainment through education. The poll shows that the gap between education and real-life problem-solving skills gets closed substantially (65%) only by the time one gets a post graduate degree.

Such gap in skills would explain the growing income gap between top and bottom earners.

To summarize, while the US spends massively on education, its workforce remains non-competitive because our policies deliberately confuse education with skills. By contrast, Germany spends a lot of effort in developing skilled workers, who remain globally competitive despite their high wages.

A similar process takes place in creativity-related education. If students don't develop skills, they remain stuck in the left side of the skill-challenge space and, unlike Gates, Jobs, Zuckerberg, can't take on important challenges.

tags: education, creativity, system, control

The Problem Creation Problem: A Game of Thrones.

In "A Storm of Swords" (one of the fantasy novels that serve as a literary foundation for the popular HBO TV Show A Game of Thrones) the author creates a lot of problems for his characters to solve and for readers to enjoy. The more intractable the problem, the more entertainment value it provides because it requires ingenious solutions and plenty of opportunities for dangerous mistakes.
Personal intrigues about love, lust, and power aside, the novel poses interesting technical problems as well. For example, we find Jon Snow and less than a hundred of his fellow guards in charge of defending The Wall against more than a hundred thousand of Wildlings. The Wall itself is impregnable to the low tech assailants, but it has a narrow passage that allows people to get beyond the Wall. Jon Snow's biggest challenge is to prevent the Wildlings from getting through the passage.

In the book, both sides show great creativity in attacking and defending the passage. There's a king of giants who rips out its iron gate; there's a brave dozen of guards who kill him in the process, etc. The fight goes on for pages and its a lot of fun to read.

But when I put my inventor hat on, I wonder why have the passage at all. On the internal side of the Wall, the guards use an equivalent of a large elevator to get on and off the Wall. Since the guards on the Wall are in full control of the elevator, no enemy can get over the Wall. In short, the elevator is the safest method to get people "through" the Wall. You would think that the builders of the Wall should be smart enough to use the elevator on both sides; especially, on the dangerous side because the Wildlings would have no chance to penetrate the Wall when the guards lift or temporarily disable the elevator. Furthermore, according to the book, the passage is so narrow that its throughput capacity is no greater than that of the elevator. Then, why do we have the passage at all if it introduces a major design flaw?

Well, from a fun creation perspective, the passage is a "planted" intractable problem that allows the author to keep the struggle for the Wall going for pages and pages and pages. Not having the passage would be a great technology solution, but its entertainment value would be almost non-existent. As we discuss in the Prologue of Scalable Innovation, we humans prefer the entertainment value. That's why our discussions and practices of creativity are skewed toward fun and games, including games of thrones.

--
my earlier post on the Problem Creation Problem.

tags: problem, solution, entertainment, separation, bundle

(BN) Cisco Plans Israel’s Transformation Into First Digital Nation

(Bloomberg) Cisco Systems Inc. (CSCO) will make Israel the world's first fully digital country with a fiber-optic network to serve multiple requirements, showcasing technology that other nations may adopt, its chief executive officer said.

"Israel's transformation to next-generation 'Start-Up Nation,' the digitalization of the whole country, that is the future," CEO John Chambers said, referring to the title of a book on the country's technology industry. "Israel is going to be the first digital nation if we are successful."

Cisco is likely to start building the fast network for Israel Electric Corp. this year. It will compete with the networks of Hot Telecommunication System Ltd. and Bezeq The Israeli Telecommunication Corp. (BEZQ)and will eventually serve as the backbone for electricity, television, health care and even education, Chambers said in Jerusalem today.

"I'm beginning to believe this will actually happen," said Ori Licht, head of research at Tel Aviv-based IBI-Israel Brokerage & Investments, noting that the Israel Electric group now has enough money to start building the network, even as Israeli inexperience may raise obstacles.

The Finance Ministry has approved a group of investors and companies that will partner with Israel Electric for the project and the final signing is expected within weeks. Cisco will provide vendor financing of about $140 million and the cost of the entire infrastructure has been estimated at 5 billion shekels ($1.39 billion).

Growing Market

"There will be challenges and controversies along the way," said Chambers, without elaborating. "When you do something no other nation's done you are taking risk and it is a risk Cisco is very much committed to."

One challenge will be to protect the network, and San Jose, California-based Cisco will establish a lab in Israel to develop security technologies.

Israel is a good choice for the project because of the number of technology startups, the small land mass, the medium-size population, and the high level of education, Chambers said. The new network will be a model for other countries, and startups that develop for the infrastructure will find a growing market outside the country, he said.

Lunch Talk: (@Google) Intuition Pumps and Other Tools for Thinking .

Professor Dennett comes to Google to talk about his new book, Intuition Pumps and Other Tools for Thinking. Dennett deploys his thinking tools to gain traction on these thorny issues while offering readers insight into how and why each tool was built. Alongside well-known favorites like Occam's Razor and reductio ad absurdum lie thrilling descriptions of Dennett's own creations: Trapped in the Robot Control Room, Beware of the Prime Mammal, and The Wandering Two-Bitser. Ranging across disciplines as diverse as psychology, biology, computer science, and physics, Dennett's tools embrace in equal measure light-heartedness and accessibility as they welcome uninitiated and seasoned readers alike. As always, his goal remains to teach you how to "think reliably and even gracefully about really hard questions."

tags: creativity, thinking, tools

Scalable Innovation. Figures for Section III (chapters 21-27)

This post concludes the series of detailed figures from our book Scalable Innovation: A Guide for Inventors, Entrepreneurs, and IP Professionals.

Figures from the previous portions of the book are here:
- Introduction and Prologue: Unlearning What's Untrue.
- Section I. Using Systems Thinking for Understanding Technology, Inventions, and Patents.
- Section II. Thinking Outside the Box.
- Section III. System Evolution and Innovation Timing (Chapters 11-20)

Chapter 21.  Deconstructing Luck: Factors Affecting the Success of a System

Scalability is an inherent property of successful systems.

FIGURE 21.1 In large cities people walk faster than in small ones. Walking speed as a function of city population size. (From http:// www.pnas.org/content/104/17/7301.)

FIGURE 21.2 Monthly minutes per active user, photo and video apps. (From http:// blog.␣urry.com/.)

FIGURE 21.3 One of the early Facebook patents. Aaron Sittig and Mark Zuckerberg, US Patent 8,099,433

FIGURE 21.4    Network architecture diagrams from Baran’s 1962 paper on network reliability. Diagrams courtesy Rand Corporation [66].

FIGURE 21.5 Nicira platform as an interface between network software and hardware. The interface layer separates hardware and software, enabling rapid pace of innovation for both. Diagram courtesy of Nicira. US Patent Application 20100257263.

Chapter 22. Seeing the Invisible: The System behind the New Internet

FIGURE 22.1    A higher-level view of Facebook and other Internet services.

FIGURE 22.2 (a) Stated versus (b) actual distribution of privacy settings for individual posts.

FIGURE 22.3 Time that users spend on popular social networking services. (From http://venturebeat.com/2012/02/17/facebook-engagement/.)

Chapter 26.  System Efficiency: Solving Detection Problems to Improve Control

FIGURE 26.1 TiVo Thumbs Up and Down interface, US Patent 7,840,986 [86].

FIGURE 27.1 Example: Reinvention of the brick-and-mortar shopping cart.

Scalable Innovation. Figures for Section III (chapters 11-20)

This post continues with detailed figures from our book Scalable Innovation: A Guide for Inventors, Entrepreneurs, and IP Professionals.

Previously, on this blog:
- Introduction and Prologue: Unlearning What's Untrue.
- Section I. Using Systems Thinking for Understanding Technology, Inventions, and Patents.
- Section II. Thinking Outside the Box.


In Section III, we apply the model and outside-the-box thinking to determine the timing of a particular innovation.

Chapter 11. We start with the S-curve that describes a surprisingly diverse range of system evolution scenarios.

FIGURE 1.1a A generic S curve: Time/effort-performance. (From R.A. Burgelman, C.M. Christensen et al., Strategic Management of Technology and Innovation, 2009 [3].)

FIGURE 1.1b A typical age-weight S curve for a mammal, e.g. rat (From Geoffrey West, Ted Talk, July 2011 [4].)

FIGURE 1.1c Walmart: Time-Sales S curve. (From Geoffrey West, Ted Talk, July 2011 [4].)

FIGURE 1.1d Market adoption S curve. TVs and PCs. A 1984 actual and forecast. (From Everett M. Rogers, The diffusion of home computers among households in Silicon Valley, Marriage & Family Review 8, 1985 [5].)

Chapter 12. A Stage of System Evolution: Synthesis.
Here, we start looking why certain inventions can be too early to the market and what kind of problems innovators have to solve to get the system off the ground.

FIGURE 12.1   1979.  Electronic book, US Patent 4,159,417. David P. Rubicam [8].

FIGURE 12.2 Gartner hypecycle. (Fromhttp://en.wikipedia.org/wiki/Hype_cycle.)

FIGURE 12.3 Dr. Philips T. James et al., The worldwide obesity epidemic, Obesity Research 9, 2012 [11].

Chapter 13. A Stage of System Evolution: Early Growth. We talk about the key elements of system growth, including the Dominant Design and Copycats.

FIGURE 13.1 Dominant design: An ancient Roman bathtub in the Science Museum in London. The vast majority of modern bathtubs have the same form and function as this 2,000-year-old exhibit.

Chapter 15. A Paradigm Shift within the System. We discuss how growth enters a virtuous cycle.

FIGURE 15.1   The original shopping cart, US Patent 2,155,896

FIGURE 15.2    Shopping cart with multiple baskets, US Patent 2,196,914. You can see that Sylvan Goldman designed it using a folding chair and some wheels.

Chapter 16. Infrastructure Innovations: Timing Is Everything.

FIGURE 16.1    Google Fiber project diagram. (From a construction update, Google Fiber Blog, April 04, 2012 [33].)

Chapter 17. Infrastructure and Growth: Zooming In on the Micro Level

FIGURE 17.1 Moore’s original projection from 1965 to 1975. (From Gordon Moore, Cramming more components onto integrated circuits, Electronics 38, 1965.)

 FIGURE 17.2 3-D representation of a multilayer IC metallization scheme. (From http://en.wikipedia.org/wiki/Integrated_circuit.)

FIGURE 17.3 Optical versus electrical interconnect. (From Andrew Alduino and Mario Paniccia, Interconnects:␣Wiring electronics with light, Nature Photonics 1, 2007 [45].)

FIGURE 20.1   Wired: The web is dead. (From http://www.wired.com/magazine/2010/08/ff_webrip/ all/1.)

(To be continued...)

Scalable Innovation. Figures for Section II.

This post continues with detailed figures from our book Scalable Innovation: A Guide for Inventors, Entrepreneurs, and IP Professionals.

Previously, on this blog:
- Introduction and Prologue: Unlearning What's Untrue.
- Section I. Using Systems Thinking for Understanding Technology, Inventions, and Patents.

In Section II, we introduce tools for thinking outside the box, considers the role of luck in success of inventions, and presents tools for flexible thinking and imagination development.

Chapter 6. Outside the Box: Developing Skills for Creative Thinking.

The picture below illustrates how even a minor change in perspective can make a great change in  life of a "surprised turkey" from the Nassim Taleb's parable:

A turkey is fed for 1,000 days - every day lulling it more and more into the feeling that the human feeders are acting in its best interest. Except that on the 1,001st day, the butcher shows up and there is a surprise. The surprise is for the turkey, not the butcher.

FIGURE 6.2    Expanding “turkey” perspective beyond 1,000 days.

Chapter 7. Seeing the Outlines of the Box: Discovering the Boundaries of a System.

We show how to use the system model for changing perspective systematically, moving between "boxes", thinking outside or inside the box at will. In the example below, we discover a major innovation opportunity by seeing Edison's implementation as an element of a bigger system.

FIGURE 7.1 A diagram of a coal-based energy distribution system, with electrified Manhattan plugged in as an instance of the Tool. (1) Various city blocks “plugged” into the larger system (instances of the Tool). (2) Coal mines (instances of the Source). (3) Railroad routes for coal delivery (an instance of the Distribution). (4a) A coal barge (an instance of the Packaged Payload). (4b) A coal train (an instance of the Packaged Payload). (5) Railroad time table (representing an instance of the Control).

Chapter 8. Inventor’s Luck: A System Perspective.

success = talent + luck 

great success = a little more talent + a lot of luck

—Daniel Kahneman, psychologist, 2002 Nobel Laureate in Economics

[F]or the first fifteen years after sliced bread was available no one bought it; no one knew about it; it was a complete and total failure.
—Seth Godin, entrepreneur and author of eleven books on marketing␣methods␣

We use the story of Otto Rohwedder, the inventor of the original bread slicing machine, to show how an invention, not necessarily the inventor, can become "lucky."

FIGURE 8.1    The original design of the early GE toaster. (Courtesy www.toaster. org.)

FIGURE 8.2 Contemporary Toastmaster advertisement. (Courtesy www.toaster. org)

FIGURE 8.3    Contemporary advertisement for a commercial Toastmaster. (Courtesy www.toaster.org)

Chapter 9. The Three Magicians: Tools for Flexible Thinking

Below is an example of how we can use the method to understand a diverse range of user scenarios without missing critically important details, while maintaining our flexibility of perspective.

FIGURE 9.1 Whiteboard Divide–Connect sketches during a practice invention session for a novel blood pressure device. Stanford University Continuous Studies Program. Principles of Invention and Innovation (BUS 74), summer 2012. Photo courtesy Silvia Ramos.

FIGURE 9.2    The 9-screen view. The turkey is preoccupied with the day-to-day supply of grain at the lower level. He doesn’t see the bigger picture at the higher level.

FIGURE 9.3    The 9-screen navigation logic. To understand the situation, the turkey needs to follow the top level (blue) arrows and see how the problem develops in space and time.

Chapter 10. Imagination Development: Seeing the World beyond Present-Day Constraints

An example of exponential thinking that lead to the creation of Kiva Systems, a company that develops robotic systems for warehouse automation (bought by Amazon for $775M).

FIGURE 10.1 From zero to in␣nity. Mick Mountz’s TED talk screen shot. (From Mick Mountz: Let the inventory walk and talk).

FIGURE 10.2    A bird’s eye view of a large-scale, distributed robotic warehouse. Each dot represents a mobile runner-robot that can hold and deliver a good to packing stations on the right. To reduce handling time, robots with popular items can stay closer to the packing stations.

An application of 10X thinking to the memristor technology.

FIGURE 10.3    Recon␣gurable multilayer circuit, US Patent Application 20120007038

Another example of exponential change: high-frequency stock trading.

FIGURE 10.4    High-frequency stock trading process. (From Charles Duhigg, Stock traders find speed pays, in milliseconds, New York Times, July 23, 2009, http://www. nytimes.com/2009/07/24/business/24trading.html ).

(To be continued...)