Monday 22 August 2011

INTELLECTUAL CAPITAL


This is probably one of the most innovative times in the history of our industry. Not since the turn of the century have we seen so many new technologies being developed for the automobile. Patent applications are at an all-time high, but all is not well. In the USA alone, there is a patent
backlog of about 1.2 million applications. Acceptance rates have gone down as patent examiners try to prove they are doing a thorough job, and it typically takes well over three years to get a patent granted. My own “Uni-Chassis” patent has been sitting in the queue for four years! Coming out of the Great Recession, OEs and Tier 1 suppliers have been applying for patents in record numbers. This is quite a change from what I experienced as a young engineer. I remember coming up with a hydraulic anti-roll device. My boss immediately signed it and filed a disclosure, but my employer refused to go through the expense of patenting it.

Their policy was to file the disclosures so they couldn’t be precluded from using the technology, but
had no interest in keeping it proprietary. Imagine my chagrin when some 40 years
later a world-renowned company announced that its latest supercar is using that very same technology! It is good to see that the industry now recognizes that patenting new inventions can be a strategic advantage. Things are quite different, however, for the poor independent inventor. I know of at least two individuals who have developed worthwhile, innovative products. Their life’s fortune has been invested in their idea. Not only has the legal expense of applying for a patent and the long wait for its approval been a burden (while negotiation between the patent examiner and the patent attorney
keeps the meter running), but they then must spend all their time and resources trying to get an audience with a customer, let alone achieve acceptance. Let’s face it, OEs and Tier 1s (and I have been both) are not particularly fond of paying royalties to someone else. That’s
what their R&D departments are for. Engineers are rightly trained to look for what is wrong with an idea, and therefore an inventor can get mired in overcoming NIH and answering a never-ending series of questions – long before he makes his first dollar. Moreover, if a good idea is presented,
it usually stimulates another good idea that the reviewer may pursue with the resources of his employer, while the original inventor is left to fend for himself. Some argue that venture capital sources
are the mechanism for funding aspiring inventors. True; but remember that typically only one out of 10 inventions funded by venture capital succeeds, and for those that do, the inventor’s control often becomes
diluted long before significant profits are realized. The process of getting funded by a
venture capitalist has also become distorted. To get investors’ attention, and approval of funds, outlandish claims are encouraged, leaving many an honest inventor in the dust.

There must be a better way. I believe that every human being has at least one novel idea that could be of benefit to society.
My solution: create a non-profit Innovation Foundation. Inventors would be encouraged to submit their ideas to a panel of judges  engineers, patent attorneys, and marketers. The most promising ideas would be patented, developed, and promoted by the foundation. Benefits accruing from the invention would be split between the inventor and the foundation, with foundation monies used to support and promote other inventors. Let’s accelerate the innovation process. In the meantime, governments need to properly staff and streamline their patent offices. The country that best fosters an innovative environment will win the global
technology race. After all, a country’s true competitive advantage lies in its intellectual capital. Let the race begin.

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