Assignment 13- Part 4

This post will further discuss what I learned this semester in IEOR 190G.

I learned a lot about patents!
- What can and can not be patented
- The difference between different types of IP
- What Obviousness and anticipation are
- What a prior art is
- What the claims on a patent look like
- How to go about writing the claims
- What a Patent troll is
-etc

What all of this comes down to is I am planning on writing a patent of my own. My cousin and I have an idea for a startup that we have been throwing around for a while, and the idea of patenting the concept really never came up. Both my cousin and I knew what patents were before this semester, but after taking this class I feel I really have a grasp on how important patents are.

Especially in the tech field where there are so many competitors, having a patent can be the difference between life and death for a company. Without this class I would have never considered pursuing a patent. On top of that, I would have had no idea where to start looking to find out about patents. Basically, the only chance of filing a patent I had before this class was to go to a patent lawyer and pay exorbitant amounts of money for he/she to do it. Now I still don't feel like I know how to write a patent, but I feel like I could figure it out and I know the right questions to ask which I believe is the most important part.

Assignment 13- Part 3

This post will discuss what I learned from this class.

One of the biggest things this class taught me was how to correctly value patents and how that can be used to then value a company. I am going to be starting an internship in investment banking this summer where a large part of what I will be doing is valuing companies.

Historically companies have been valued on their physical assets, but more and more recently companies are being valued based on less tangible things. This include their brand name, reputation, following, human capital, and of course patents. I never really considered patents to be all that important, because I thought they expired so they didn't even last that long, and there were always ways around them. Now when I look at a company I think much more not only about patents, but about their non physical assets as a whole.

For example, Some these big pharmaceutical companies have very imporatant patents on blockbuster drugs. While the patents last, these drugs can individually bring in billions and billions of dollars for the company. After the patent has expired, other companies are free to produce other generics and thus decrease the profits from the name brand drug, but during the life of the patent it can be worth billions of dollars in yearly revenue. This idea explains why a certain pharmaceutical company buys another, as well as why it is paying so much for another drug company.

Assignment 13- Part 2

Discussion of Collaborative Social Media Learning part 2

This post will discuss a couple more positive aspects of using social media and a couple of the cons.

A big point that can be seen as both a  positive and a negative for this is that is it obviously public and thus can effect someone’s reputation. The positive side of this is that it helps you build your name and can potentially give you credibility if someone sees the excellent work that you have done as a student and extrapolates that to excellent work that you would maybe do as an employee. Further it shows a certain skill level and understanding of patents that most other college graduates would not possess.

The negative side of this is if one is self-conscience of their posts and would rather not have it be public than this could be an issue. This would be because they do not feel they understood the material well enough and thus the blog posts, twitter comments, and YouTube videos are a negative representation of their academic or intellectual abilities. The different would be that a PHD publicizes their thesis which is something they spent years working on opposed to a blog post which a student spent anywhere between minutes to hours on. Overall I acknowledge this con, but I would argue that you should be proud of the work you turn in and if you are not then work harder on it.

Another pro and con comes from the community aspects of using social media. In recent times we have seen the increase of a sharing economy. This has been seen through companies such as Airbnb and Uber. So if we see knowledge and insight as a private good that can be shared then I guess we are all part of this sharing economy to an extent by putting our knowledge and insight out there for everyone else to use and in return each of us receive the insight and knowledge of others. It makes knowledge and ideas much more like an open source project which in the end helps everyone by increasing everyones knowledge rather than a system where the information is only for a privileged few.

The negative side of this is that while we built a virtual community we failed at building a real one. I have commented on just about everyone in this class’s youtube and blog posts, but I have actually spoken to extremely few of them. As a result I may have gained some of their knowledge but I didn’t gain their trust, friendship, etc. Overall this could have been solved by having a group project or a different form of in class discussion in smaller groups.

Assignment 13- Part 1

Collaborative Social media learning #1

This post will discuss the collaborative social media learning that we did in class and what I see as some of the pros and cons of it.

Some of the obvious positive aspects of using social media tools are the speed and ease with which they can be used. Social media is all about instantaneous access and real time information. So apposed to many classes where you write a paper and then wait a couple days to turn it in this is instantaneous. The other physical aspect is ease with which one can embed videos and hyperlink websites within posts. Having hyperlinks and YouTube videos embedded in the blog posts makes it extremely convenient apposed to opening up multiple windows and type in different urls.

The next and much larger aspect of social media is that it creates a conversation. In most of my classes the teacher teaches and then I turn in an assignment and I never see my fellow classmates work. Since they never see my work and I never see their work  I am left to believe that everyone did something pretty similar. This class has shown the compete opposite as I have seen that people have very different posts from me with different ideas and conclusions. As a result, I have been learning from my other students rather than simply learning from one source (the teacher) and then regurgitating the information on a paper or test.

This concept is best shown through the comments and comments on comments. In no other class of mine have I received candid feedback on my work from my fellow classmates. Not to discredit any of my professors, but having just their feedback is nowhere near as good as having the diverse opinions of 40 or 50 students who each have a different perspective.

The next post will give some more pros as well as the cons.

Assignment 12- Part 4

Discussion of Physical vs non Physical Assets

This post discusses the transformation from physical to intangible assets  that add value to companies.

In the past companies value could be attained through figuring out the price of all the physical assets that the company owned. This would include building, raw materials, inventory, etc. More recently we see companies like Google that have immense amounts of physical assets such as buildings and data centers, but these physical assets pale in comparison to the value of the intellectual property and human capital under Google’s control.

This move away from physical assets has large effects with regard to valuing a company. Tech companies are often sold between one another which is much harder than selling a fuel company which can quantify how much of a physical asset it has. As a result companies tend to include a category called goodwill which adds to the value of a company above its non physical assets such as its brand recognition and potential.

The other side of this that directly relates to patents is the PVGO ( present value of growth opportunities). Seeing as many of these tech companies stock prices are not based upon consistent earning but rather the potential for future earnings, patents may play a huge role. If a company has a patent that is expected to play a key role in an emerging technology than that company may expect 10 billion dollars for example over the next three years from a patent. They may also get 0 dollars depending on what actually happens with the technology. As a result a large portion of a company’s value may be based on the patents that it holds and the potential earning they may bring in rather than the physical structures and historical earnings.

Here is the article-  www.wipo.int/sme/en/ip_business/ip_asset/business_assets

Assignment 12- part 3

Patent litigation in Texas

This post will discuss an article I found online about why so much patent litigation happens in eastern Texas, and the implications of this.

The first reason that so much patent troll litigation happens in eastern Texas cities such as Marshal is actually quite innocent. When pursuing cases in larger cities such as Dallas or Houston there are many civil and criminal cases and thus getting a court date is much more likely to be delayed. The longer it takes for a legal battle to be settled the more it costs in lawyer and other fees. Thus for patent trolls it is much cheaper to go to court in these small towns.

The next less so innocent reason that patent trolls prefer these towns is that the citizens that make up these juries are generally quite ignorant with regard to patent law. They also are generally in favor of the patent trolls as they are easily swayed to believe that the large companies are infringing on the patents of these patent trolls as they are generally more conservative. As a result, they equate protection of personal rights/liberties with protecting patent trolls from illegal infringement.

At this point these small cities are encouraging more patent trolls to come. The small towns see increased revenue from having tourists in the form of lawyers who boost the small economy. This is simply another example of how patent trolls are unethical corporations that will use every loophole and immoral practice to get money out of legitimate companies.

The article is

http://www.chron.com/business/technology/article/Apple-sued-84-times-in-Texas-patent-courts-in-6-ye-6145522.php#photo-7681181

Assignment 12- Part 2

Kasznik’s talk continued

This post continues on the last one by discussing and summarizing the rest of Kasznik’s talk. She specifically talks about companies accumulating patents and what this can show us about the economy.

In a new/smaller market there are a number of players all with a handful of patents. As the industry starts to grow and certain big players are identified, they will generally start accumulating a portfolio of patents. An example of this is Google, which began with very few patents. They then both submitted more patent applications as well as increased their purchases of other companies and patents. At this point Google is buying patents and companies with patents at an incredible rate.

The idea behind this strategy is to accumulate as many patents as possible without putting too much undue stress on the company financially. Obviously companies want to purchase patents that show a positive NPV for the company, but the other concept is strategically getting patents that don’t necessarily have a positive NPV at the time of analysis.

While this concept seems counterintuitive it is gambling that a certain percentage of patents that currently don’t show much financial promise will have large upsides in the future. Similar to how venture capital firms invest, large companies can acquire patents that may potentially apply to future technologies. The example she gave was of Xerox and the Graphical User Interface which could have made them a very large some of money through either licensing or outright selling.

In conclusion it is generally in companies beset interests to build as large of a patent portfolio as they can within reason.