October 2006


Nicholas Carr reviewed Andrew McAfee’s recent HBR article.  

I’m reminded of most of the  speeches at Caesar’s burial. They begin by praising someone, but then go onto do the opposite, and get a crowd excited.  Unlike Mark Antony and Brutus, Nicholas is less than convincing this time. (Shakespeare and Nicholas do have similar views on the wisdom of crowds stuff though)

What Nicholas didn’t say is far more interesting.

Two weeks ago Nicholas argued rather smuggly that there has been no rebound in IT spend,  this, he feels, vindicates his IT doesn’t matter position (2003)

Andrew kicks off his article:

corporate IT spending has bounced back from the plunge it took in 2001. In 1987, U.S. corporations’ investment in IT per employee averaged $1,500. By 2004, the latest year for which government data are available, that amount had more than tripled to $5,100 per employee. In fact, American companies spend as much on IT each year as they do on offices, warehouses, and factories put together.

Nicholas didn’t challenge this. That is because the facts are on Andrew’s side. IT spending is up. Organisations are spending even more money on ERP and other Enterprise stuff than ever before. SAP and Oracle’s financial results illustrate this clearly.

AMR backs up Andrew’s point with some  soothsayerisms,

AMR Research forecasts U.S. companies will increase their ERP budgets by 11.3 percent in 2007. “This year and next will experience levels of ERP investment that we haven’t seen since the late 1990s,” said Jim Shepherd, a senior vice president at AMR Research. “At that time, new customers were replacing legacy systems with ERP suites. Today, spending is driven by a healthy mix of new customers, consolidation projects, add-on applications, and deployment to additional users.”

Most industries would call an 11.3 growth pretty good. And this is boring old utilitiesque ERP. Additionally, if we look to the booming hip SaaS sector, we see SFDC, successfactors and others doing really well too. Collaborative tools like wikis are taking off (Socialtext and others are doing rather nicely)

Andrew’s final sentence is key,

Vendors offer a wide range of FIT, NIT, and EIT, so these technologies are not rare and seem to be highly imitable. However, people often forget that while the software itself might not be any of those things, a successfully implemented system isn’t easy to replicate. Because of the managerial challenges inherent in its implementation, IT meets all four criteria when a company succeeds in applying a technology and, consequently, gains valuable capabilities.

 I’m not the only one that thinks that Nicholas gets it wrong. Neil over at  Macehiter Ward-Dutton notes

However, I disagree with Carr’s conclusion:

McAfee’s article may not be quite as clarifying as it is intended to be.

Had McAfee had stopped at the classification then I would have agreed. It’s the marrying of the technology classification to the organisational implications where McAfee clarifies things, since it helps to facilitate a dialogue between business and IT in a language which both sides understand. Equally importantly, it moves beyond the technology selection phase to outline the role of the business during adoption and subsequent exploitation.

Nicholas picks up that Andrew’s 3-tier model is  a simpification of reality, and it doesn’t work in all contexts. But no model does.  Sitting here in software land I find the model more useful than blunt 1.0 vs 2.0 oversimplifications.  Does the model help managers understand IT better? Well yes it does.  In a page or two of an HBR article packed with case study snipbits one can’t really expect much more.

Nicholas, as a former editor, should know that Harvard Business Review is not really an academic publication- It is aimed a business manager readership, and lets us businessy types think that we are reading something academic. That makes us feel cleverer than we are, and that is a nice, warm feeling.  It is made up of short, interesting thought pieces but it is not the home of rigorous academic model building.  I think it is a fabulous magazine, no mistake.

I’d suggest that Nicholas should read this paper from Andrew and his colleagues, Erik Brynjolfsson, Michael Sorell, and Feng Zhu.  It is dense, heavygoing and empirically sound.  And it knocks his IT doesn’t matter argument for a Kevin Pieterson.

 To quote a bit….

This section empirically investigates the effects of rapid IT adoption on the competitive dynamics of US industries. As Figures 1a and 1b show, the U.S. economy became substantially more IT intensive from 1987-2004. Figure 1a plots corporate IT stock (at historical cost) per FTE by year; the graph shows accelerating IT intensity from 1987-2000, followed by two years of decline corresponding to recession. IT  per FTE resumed its upward trend in 2003. By 2004, at more than $2,600, it was the highest it had ever been and was more than three times higher than it had been in 1987, even before adjusting for the large increase in real computing power delivered per dollar of expenditure. Figure 1b plots IT’s percentage of total investment in tangible wealth each year, together with the equivalent percentages for equipment and plant (the three values for each year sum to 100). IT’s share of the total increased more than 10% during this period to almost 23% of total tangible wealth.

Stretching my Shakespeare metaphor beyond repair, it is time for Nicholas Carr and Andrew McAfee to meet at Philippi. 

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Like at Office 2.0, when the crowd wanted to know how to sell Web 2.0 into the enterprise and I said, “Um, the chaotic and grassroots nature of Web 2.0 is antithetical to enterprise. However, I do see the next generation of potential employees disrupting all that is enterprise anyway. I believe the nature of business itself is changing. It’s only time before the grassroots disrupts it.

If you read some folks in the blogsphere innovation is a magic dust sprinkles down only on folks that embrace chaos, cluetrains, grassroots, and openness.   Lots of these folks believe governments and big enterprise are evil bureaucracies that trample on the innovation flowerbed.  They predict revolutions and wholesale corporate carnage.

Indeed, many inventions and innovations percolate, and are serendipitous.  Post-it is the poster child, and every organisation can point to their own fabulous innovation that came from the deep cover boundary (cricketing equivalent of left field)

But I’ve a problem with an anti-enterprise dogma. I don’t buy that the workers will revolt with web 2.0. (workers of the world unite you have nothing to loose but your second life)  and I’ve reached my tipping point with the long tailed wisdom of the crowd. Not because of my deep rooted enterprisey conservatism, but because I’ve checked out some history.

”The likely prime reason for U.S. software supremacy is a paradoxical one –government support for the industry. The paradox arises from the fact that, although the United States is non-interventionist in principle, in practice it promoted the early industry massively by creating a market for computers and software through programs such as the SAGE project, the Department of Defense’s ADP program, and the NASA program, to mention only the largest..”  check out his book Martin Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry, MIT Press, Cambridge Mass., 2003.   

So, next time someone says check out this cool 2.0 thingy, remember that the biggest bureaucracy of them all made it happen.  No DARPA, No Internet.  If there is an innovation that is going to revolutionise anything anytime soon, odds are, a government or a big corporate somewhere is funding it. 

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Oh dear, Over on the cyberlaw site at Harvard I came across a paper I’d seen before but not actually read. I read it last night. Spam Works: Evidence from Stock Touts and Corresponding Market Activity.  by Frieder and Zittrain. Read it. It is scary stuff.  Here is a quote….

We match price and volume data from Pink Sheets, LLC to ticker symbols that appear in email touts received by one of the authors and by the Internet Usenet newsgroup net.admin.network.abuse.sightings (“NANAS”) between January 2004 and July 2005, and compare the presence and volume of spam that touts particular stocks with the price and volume behavior of those stocks before, during, and after the touts.

We find a significantly positive return on a day of heavy spam touting of a stock, along with the day preceding our detection of such touting. Volume also responds positively and significantly to heavy touting. Returns in the days following touting are significantly negative. Though we have no way of directly knowing if the spammer actually has holdings in the spammed stock apart from the spammer’s own admission, when it appears, and the surmise that some pecuniary motive inspires sending the spam, the evidence accords with a hypothesis that spammers tout stocks in order to increase trading activity and price enough to unload their positions at a profit. Selling pressure on the part of the spammer then results in negative returns following heavy touting.

Does this worry anyone else? Bill Gates reckoned he would have the SPAM problem fixed by now, but we are absolutely miles from any kind of resolution. SPAM filters are not the cure, they are  band-aids applied to a bullet wound.  The Internet is not all huggy huggy web2.0 goodness and freedom. Surely the SEC and others should go after these folks?

 Check out the Spamhaus site for more details on the extent of the spam problem. Neither existing laws nor the current Internet governance seem to be workin. Spamhaus noted in 2003  that

As an international organization, but one which is based in the United Kingdom where the sending of Unsolicited Bulk Email is now illegal, Spamhaus sees the introduction of the CAN-SPAM Act of 2003 (S.877/HR 2214) as a serious failure of the United States government to understand the Spam problem.

3 years later it would seem that they were right.  I do find it rather odd that the organisation leading the fight against spam is a 25 person non-for-profit organisation.  The UK government won’t fund them, and they rely on donations to keep operating.

The spamming software is getting more sophisicated.

“Although we’ve seen automated spam networks set up by malware before…this is one of the more sophisticated efforts. The complexity and scope of the project rivals some commercial software. Clearly the spammers have made quite an investment in infrastructure in order to maintain their level of income,” the advisory concludes.

Geeklawyer  led me to a case in the UK and the US  relating to spamming .  This has all the making of a Rumpole episode. Details here and here I think. Zoli suggested an approach to deal with some of the spam you get. In addition to Zoli’s point, stick the FTC on cc. According to the FTC website.

If you get spam email that you think is deceptive, forward it to spam@uce.gov. The FTC uses the spam stored in this database to pursue law enforcement actions against people who send deceptive email.

enough said.

 

I prefer Emergence and emergent  to Enterprise 2.0, as I ranted recently One of the folks at SAP who walks this walk is Craig. He is one of the main guys driving SDN at SAP, and he has an interesting personal blog too, never mind all his SDN evangelising.

I’ve read a lot about the Office 2.0 event, but I really enjoyed his post on why he was there.

….ways for the Information Worker of tomorrow to get their jobs done we’ll see more and more ways of integrating enterprise levels processes into online and collaborative environments.

This is not that far away from what Kagermann said to AMR the other week.

Herewith AMR talking to the SAP CEO.

AMR Research: What do you think of all the buzz around Web 2.0?

Kagermann: (He laughs). Hasso was just here yesterday saying that we need to do build more Web 2.0 into our software. (He is referring to Hasso Plattner, one of SAP’s cofounders and his predecessor as CEO at SAP.) With SOA, you can have all these different user experiences with 100% business system integrity.

AMR Research: Inside SAP, your company is using a lot of collaborative tools like wikis. Do you see these becoming part of future SAP products? The primary concern seems to be the lack of security.

Kagermann: You’re right. We will add wikis and other tools when we can tie them into our security layer.

I’m not sure the future of E2.0 is only about startups spelt without vowels. SAP Ventures was an early investor in Socialtext, and SDN is not only a growing network, but a fabulous live experiment in emergence.  As with any new space, new players will spring up but it would be a mistake to assume that the enterprisey crowd will miss this train.  Is just my SAP zealot glasses  or SDN have something of the cluetrain about it?

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If anyone asks me for Netweaver-SOA  impact evidence,  the first thing I point to is the GUI.  I have commented on Duet, AJAX and Adobe in an SAP context before.  The decoupling of application logic and GUI layer has laid the groundwork for a lot of innovation and change in application presentation.

The other week  a customer told  me, “It is all very well all this openess business, but it is a bit confusing with all these options.” He was right, and this is not the first time I have heard this. Choice means decisions. 

Well, SDN to the rescue again.  Herewith the first of several whitepapers on SAP GUI strategy. (Hat tip Filip, and I’m sure he would appreciate feedback, postive or otherwise)

The paper provides a description of the Muse project (mentioned at Sapphire and Teched), - SAP’s approach to Rich Internet Applications.  

I sense that we are moving to a world where the GUI will change often. As new UI concepts emerge, (often from the consumer space) then enterprise applications will  adopt them, but without disrupting core application logic. I think we are seeing the start of this now.

I’m always on the look out for cool examples of bespoke UI stuff. Last week I was sent a fabulous  example of employee performance management at a global pharmaceutical. Once I have a few more together I’ll post them.

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I spend a good portion of my time talking with large hairy and scary global companies about global systems. Often they employ 100,000′s of employees and make billions. The projects are complex and highly political, what with IT departments, users, executives,  consultants all with hidden and not-so-hidden agendas.

Projects often take on a political dimension that reminds me of Yes Minister.

Sir Humphrey: It is characteristic of all committee discussions and decisions that every member has a vivid recollection of them and that every member’s recollection of them differs violently from every other member’s recollection. Consequently, we accept the convention that the official decisions are those and only those which have been officially recorded in the minutes by the officials, from which it emerges with an elegant inevitability that any decision which has been officially reached will have been officially recorded in the minutes by the officials and any decision which is not recorded in the minutes has not been officially reached even if one or more members believe they can recollect it, so in this particular case, if the decision had been officially reached it would have been officially recorded in the minutes by the officials. And it isn’t so it wasn’t.

Somehow they manage to get implemented but the software is the pawn in the corporate chess game..

I often search on Google for SAP related stuff,  and I found a gem this morning.   It made me think about a different type of global company. The small global company.  How do you make a global supply chain work, how do you handle multiple tax and currencies… Not easy when you are big, but a real challenge when you are small.

Next time someone says SAP ERP  can’t support small, innovative companies,  I’ll point them to the Lonely Planet.  While lurking in Google looking for examples of big global titans, I found this presentation from the SAP Australia User Group meeting.  I’m simply blown away by what they have achieved, in terms of ambition, scope, resourcing and speed. Awesome.  I’ll be showing this to the big guys next time.

The success factors are the same whether you have 100 or 100,000 employees. Lonely Planet stated:

    We over invested in ensuring that we had clearly defined roles and responsibilities for everyone involved in the project, including our partners

• We changed peoples personal goals to reflect their responsibilities

• All subject matter experts (SME’s) are full time on the project and have had their day job backfilled

• We appointed process owners and empowered them as a group of decision makers through the whole program

• The project team sits together (and celebrates regularly)

• The project sponsors are very actively engaged in all aspects of the projects

• We have invested in formal change management including technical writers, trainers, communication managers

If only every project did this. Lonely Planet rocks. 

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There has been a mixed bag of positive and negative blogger comment out of European Teched.   But SDN continues to receive lots of kudos, even from the modern day PyrrhoDennis.  David is also impressed.

 What’s unique is the scale of the thing, and the way that SAP is embracing the changes it will bring.  There are over  570,000 subscribers, it is completely open, and the core service is free – I’ve just joined this morning.  You can ask any question you like, and there is passionate community, 94% of which aren’t SAP employees, who are willing to answer questions.  As well as spreading their knowledge, and promoting their expert status, contributors are awarded with a points system, which gets them things like free entrance to TechEd (and badges!).  There is an complementary service called or Business Process Expert community.  This offers the same kind of facility, but aimed more at the business analyst and consultant community rather than developers, with around 50,000 members and only a little overlap with SDN

It struck me that one of the best ways to convert those that doubt the power of the wiki (and blogs for that matter)  as an enterprise tool, would be to suggest that they watch how the SAP Wiki on SDN develops.  Tesha Harvey and the gang from SAP have done a fine job in getting it up, I’m looking forward to seeing it fly..

Have a look at the BSP stuff and the Enterprise Services Packages as a start. This is the future of application and process documentation.  Put simply, it rocks.  No walled gardens here.

The Enterprise Services Packages Wiki, a section of the SDN/BPX Wiki, exists to explain what ES Packages are in general and to provide detailed documentation of the services offered for specific ES Packages. The goal of the ES Packages Wiki is to engage the community of developers inside SAP and those in the customer and partner organizations who are using services in ES Packages and to promote the sharing of information. That is why anyone who has an idea can add it to the wiki. We encourage you to learn and to share your knowledge. The ES Packages wiki is the place to do the following things:  

Learn about how to put the services in ES Packages to work building composite applications

Share tips and tricks related to the use of the services.

Share ideas for new composite applications that could be constructed using the services.

 if wikis can be used effectively for documenting software development and processes, surely they could be used to document any other multi-person process? Coupled up with workflow and the right security, I could imagine all sorts of document intensive processes on wikis, performance appraisals, audit reports, designs, contracts, compliance documentation.

 I will leave whether this is a revolution or not to Susan, but it seems to me that the content and document management space will never be quite the same again.

BTW. while over on the BPX site I saw a competition that may interest some of you.

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Many of my colleagues at SAP, and a number of bloggers, are off to Amsterdam for the European SAP Teched, including James, Dale, Sig and Dennis.   I won’t be there, but I’ll be in Brussels.  It would have been good to meet the folks that I read, and it is great to see the blogger at SAP event thang over here in little old Europe.

Our team is  running a roundtable  for Chief HR Officers focusing in on Employee Engagement and Sustainablity.  We have some great speakers, including the head of public affairs from HP EMEA, the Vice Dean of Esade, director of research from IES, the Heads of HR at Surrey County Council, Orsay, Atos Orgin…. The attendee list looks good too.

It is easy at SAP to get carried away with the cool new technology, enterprise 2.0, the state of the SaaS market,  but I can do that every day.  Luckily I meet with folks like Filip, Jeremiah, and Craig, ask them questions and have them explain it very slowly to me more than once.

Listening to 20 or so  HR leaders discussing the issues that concern them is a less common affair. Teched can wait.

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Salesforce.com are masters at marketing. The CEO, Benioff,  has built a very successful company, leveraging his own personality and vision. I’m very impressed by his philanthropic efforts too.  Respect! SF.com dominates the salesforce automation on demand space, and for that, they deserve credit and a rosy P/E ratio. I believe the core application is very competitive in terms of salesforce automation and is easy to use. Customer growth is impressive, especially in the small and medium size organisations. They have a  sales strategy that includes a strong direct -”line of business” play. There is much here in the starship enterprisey that we could learn from the folks at SF.com.

What about Apex and the appexchange? Several commentators, including the normally sceptical Nicholas Carr,  have drunk the kool-aid.

For the last couple of days on our irregulars email torrent we have been discussing Apex and Appexchange. I won’t highlight all the points here, as the other folks will probably blog on it themselves. Herewith my thoughts…

Appexchange looks great. It is easy to navigate, lots of interaction, 2.0 feel and so on. The roster of applications continues to grow.  APEX sounds cool doesn’t it?   But I’m not so sure that either are nearly as significant as SF.com would have us believe.

 On Apex.

Permit me a nostaligic moment.

In 1992,  straight out of university, I worked as a consultant on a mainframe HR implementation. Somehow I developed a sort of competence in the very flaky reportwriter. After a very short while I ended up writing some rather complex reports, I still shudder at the thought of unions, joins, secondary selection rules, primary keys, normalisation  and so on.

I wrote a really complex series of reports, basically to produce the contracts for 70,000 insurance brokers. When I tested the reports in the sandbox it was fine and I also ran it in the test system. I filled in a long form for permission to run it against the production system. The rule was that you had to sit with the sys admin guy on the first night the report ran, in case anything went wrong. You then had to be on call for a week…

After a couple of rewrites my JCL was approved by the JCL standards committee.  So, on the appointed evening, I got the special pass that allowed me to enter the data centre, and I sat down next to a long bearded Gent  who hadn’t seen daylight for sometime.  We ran the report, and after about 3 minutes, all hell broke loose.  The final report, instead of printing out contracts for the dozen new brokers, began to print out contracts for all 70.000. eeek, the lights dimmed in Cape Town as we sucked all the available energy up… We shut down the the report, and I thought I was in deep trouble. Actually what happened is that I had been told to set up the program to work with fixed block, and the production system used variable block (or the other way round) This meant that my report was reading field 4 digits out on the selection rule, and this messed up the whole report.

Despite layers of testing and change control, I still managed to break something that was supposed to be unbreakable.

Apparently:

 Apex is a fully protected language that is designed to operate in a seamless and safe fashion with our multi-tenant on-demand service. The Apex language was specifically designed to protect our service from poorly written code.

 Dan Farber  has more.

I guess salesforce.com will need to hire a lot of bearded blokes, and don’t let me write anything. I do wonder if they have really thought through the “we will host your code bit?”   There are lots of poor programmers out there,  never mind the malicious types who might want to attack this new shiny edifice.

I’m not sure that the world needs another proprietary language.  There is an interesting post here comparing APEX to ABAP . Charles has similar views, well articulated, as usual. Charles notes..

Apex is arguably cooler than its predecessors. Things that are shiny and new always are. Of course things that are shiny and new also have no developer community, install base or ecosystem, but who am I to bring facts into the discussion (they call it Dreamforce for a reason I suppose)?

 My Thoughts On Appexchange

Perhaps I ought to pause a minute, and give you a yet another little corner of my CV. I’ve been at SAP since 1995, so if you cut me I tend to bleed sapjuice.  

What you probably don’t know is that in early 2000 I left SAP to do a startup. I had the idea to build a connectivity tool and marketplace service that connected the back office HR and procurements systems of large companies with those of recruiters, staffing agencies and training providers. I looked at all the marketplaces springing up, and said, there isn’t an HR channel to this. We managed to get a team of people together, a pilot customer and supplier, a SAP and Commerce One relationship, and things were starting to look good.  I got seed funding incubation and fantastic support from a UK SAP partner, and  we built an awesome prototype. 

We aimed  to be the HR channel to the global trading web, bringing Manpower, Adecco and the like to the world of B2B. To cut a long story short, we didn’t get it to fly. The marketplace bubble popped, and with it, our chance for funding fame and fortune.

It was a fabulous learning experience, and at least when I’m asked, “what did you do in the dot.com revolution?”, I have a war story.

Looking at Appexchange I see a lot of parallels to the heady days of  C1.

 SF.com seems to charge  money for products to appear there,  but it seems that the partners  aren’t really making money themselves.   SaaSblogs provides a detailed breakdown.

If we look at this “ecosystem” of 350+ applications, what is the breakdown? What might a stricter taxonomy look like? I recently compiled a list of these 350+ applications (I came up with 343, but I may have missed 8+) to do a little investigation. I found some wonderful tidbits of information. Did you know that at the time I retrieved the data (week of October 2, 2006)…

  •  
    • …24% of all listed applications were built by Salesforce.com rather than by partner vendors
    • …that 6 out of the 8 (that’s right, 75%) “Most Popular” applications are apps built by Salesforce.com and that are free.
    • …many of these apps extend the Salesforce.com main application functionality in ways that would traditionally classify the said “app” as a “plug-in” (Seriously, would anyone classify Clippyor the Microsoft Equation Editor as applications, or analogously would you buy a “song” on iTunes that was a Snare Drum Loop?)

Also  Josh commented: 

Right now the AppExchange ecosystem seems to be floating mainly on air, hot air at that. Only when some hard dollars are being exchanged in AppExchange will there be even the slightest chance that Benioff could do more than talk about taking market share from his self-proclaimed rivals. Until then, that’s what destroying SAP and Oracle is really all about: talk

Simply put, Appexhange needs to generate revenue for the folks publishing applications, otherwise it sounds just like the CommerceOne story. This is what gapingvoid means by a walled garden.

I’ll finish with one of my favourite quotes of all time…

Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce. .

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There has been alot of discussion about Patents recently, triggered partly by the IBM “open”patent announcement, Charles posted, as did Brad and  Jason.  There was a clash with  a Harvard Law Prof,  Jim Moore.  I’ll leave you to figure out who is winning.

My small contribution to the Patent debate is to split the issue. Is the problem with Patent Law itself, or with the execution and administration of the law?

It is good to look back in history. We might learn stuff.

It was never the object of patent laws to grant a monopoly for every trifling device, every shadow of a shade of an idea, which would naturally and spontaneously occur to any skilled mechanic or operator in the ordinary progress of manufactures. Such an indiscriminate creation of exclusive privileges tends rather to obstruct than to stimulate invention. It creates a class of speculative schemers who make it their business to watch the advancing wave of improvement, and gather its foam in the form of patented  monopolies, which enable them to lay a heavy tax on the industry of the country, without contributing anything to the real advancement of the arts.

U.S. Supreme Court, Atlantic Works v Brady, 1882

I found this quote in a paper written by Andrés Guadamuz González, a Law academic at Edinburgh University. ( I met him at the Geek law conference recently btw he has a super blog) The paper is worth reading, as it provides an interesting summary of the software IP issues here in good old europe. The postion is different from the US, but also far from ideal.

Like Andres, I found this decision  about a video game really really dumb.  (It is a European patent decision) Basically, someone has managed to patent passing the ball in a computer game. 

said guide displaying means further displays a pass guide mark (G3) accompanying another player character (P2) which belongs to the same team as said player character (P1) keeping said game medium (B) and to which said game medium (B) can most easily be passed from said player character (P1) keeping said game medium (B),”

The mind boggles. (In defence, perhaps for the English football team, given last weekend’s performance, passing is something new and non-obvious?)

My simplisitic view is that patents should:

1. Involve a much more detailed assessment of the prior art.
2. Clearer proof and burden of non-obviousness.

Patent departments in both the US and Europe are underfunded. This graph, although a few years old, shows the increase in work load in the US patent Office. this trend to has acclerated dramatically as more and more software related ideas have come to the market in the last 10 years or so.

 

 Charles made a similar point:

- The resource imbalance between industry and the US Patent Office. Industry has a lot more money to spend on patent filing than our government has to review. Currently there are 500,000 patent filings in backlog and that backlog is growing at the rate of 100,000 per year.

- The issue of uniqueness. Today many patents get through the PTO that are of questionable uniqueness. The PTO should filter these out but they’re so heavily outgunned by industry both in staff count, time and domain specific pedigree that it’s difficult to catch many of them. Once a company gets a non-unique patent through the PTO, it takes millions of dollars of litigation to un-ring the bell.

Do the Patent offices attract the right people? Do they earn enough? Are there enough of them? According to this report,  It seems not.

The U.S. Patent and Trademark Office (USPTO) is responsible for issuing U.S. patents that protect new ideas and investments in innovation and creativity.However, recent increases in both the complexity and volume of patent applications have lengthened the time it takes USPTO to process patents (“pendency”) and have raised concerns among intellectual property organizations, patent holders, and others about the quality of the patents that are issued. Over the last 10 years, the number of patent applications filed annually with USPTO has increased 91 percent from about 185,000 in 1994 to over 350,000 in 2004. USPTO’s resources have not kept pace with the rising number and complexity of patent applications it must review. Moreover, at times, USPTO officials acknowledge they have had difficulty competing with the private sector to attract and retain staff with the high degree of scientific, technical, and legal knowledge required to be patent examiners. To help the agency address these challenges, Congress passed a law requiring USPTO to improve patent quality, implement electronic government

The report is worth a read, as it highlights the challenges and progress that USPTO is and isn’t making…

Geeklawyer (Another good law blog — blawg) mentioned a similar thing when discussing the Blackberry case.

The adverse policy implications of patents are often rather hard to communicate to the public. The appalling state of the American Patent Office is generally of interest to no-one but digital rights activists patentees and their lawyers. The Blackberry debacle brings this into profound relief. News coverage seems to consist of large numbers of people all repeating the theme: “My life depends on this. If I can’t get my emails I’m in real trouble. This could be a personal disaster“.

Geeklawyer suspects that if you told these people that they are in this position because of a weak patent examination procedure caused by a combination of underfunding and policy skewed towards the applicant, as a result of corporate lobbying, they would march to Virginia and torch the place.

Assuming, that is, that someone hasn’t already patented public torchings.

It is easy to criticise bad patents, but that doesn’t mean that we should do away with patents, or necessarily drastically  reform the Patent  law itself. It has worked relatively well over the last 300 years or so.

My simple suggestion.  Fund the patent offices adequately. Attract great people to work in them, and give them the time to adequately assess the prior art.  If this means Patents end up costing more, are harder to get, and there are fewer of them, then so be it. 

Perhaps we need some innovations in Patent fees  somehow linked to the revenue that the patient generates?

I believe good patents stimulate invention and innovation. Bad patents do the opposite. European and US governments should invest more in the patent adminstration process.

 

 

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