February 2011 – artdiamondblog.com

Kappos Says Private Company Would Have Run Patent Office Better

“David Kappos of the Patent Office, with an Edison bulb.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) “There is no company I know of that would have permitted its information technology to get into the state we’re in,” David J. Kappos, who 18 months ago became director of the Patent and Trademark Office and undersecretary of commerce for intellectual property, said in a recent interview. “If it had, the C.E.O. would have been fired, the board would have been thrown out, and you would have had shareholder lawsuits.”

Once patent applications are in the system, they sit — for years. The patent office’s pipeline is so clogged it takes two years for an inventor to get an initial ruling, and an additional year or more before a patent is finally issued.
The delays and inefficiencies are more than a nuisance for inventors. Patentable ideas are the basis for many start-up companies and small businesses. Venture capitalists often require start-ups to have a patent before offering financing. That means that patent delays cost jobs, slow the economy and threaten the ability of American companies to compete with foreign businesses.

For the full story, see:

EDWARD WYATT. “U.S. Sets 21st-Century Goal: Building a Better Patent Office.” The New York Times (Mon., February 21, 2011): A1 & A3.
(Note: the online version of the article is dated February 20, 2011.)

Patent Importance Survives the Results of Moser’s Worlds Fairs Data Analysis

(p. 264) Petra Moser, now a professor at MIT’s Sloan School of Management, spent four years examining more than 15,000 different inventions exhibited at nineteenth-century worlds fairs, and their equivalents, and discovered a fact that seems at first glance to discredit the idea that patent protection was essential for innovation: Nations without patent laws were in many cases just as inventive as those with them. Or even more inventive; some of the nations best represented at those industrial fairs actively discouraged the patenting of inventions.

The reason seems to be that whether or not they enforced a patent law, smaller nations or domains, such as the Netherlands and Switzerland, were vulnerable to the theft of their innovations by competitors in larger nations. The bargain of patent protection runs two ways: The state, in return for making an idea public, offers legal recourse to its creator should someone within the state steal the idea. Since making one’s invention public in a nation with patent protection offered protection against theft only up to its own borders, only a large nation offered a large enough market to make the deal a good one, and (in Moser’s words) the small nations “would have been silly to patent [their] innovations.”
This logic inhibited investment in entire categories of innovation. Those nations that relied on secrecy rather than patent tended to specialize in the sort of inventions that cannot be easily reverse–engineered, such as chemicals or dyes.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: italics and bracketed word in original.)

How Bacardi Fought Predatory Taxation in Pre-Castro Cuba

Source of book image: http://www.nytimes.com/2008/09/21/business/21shelf.html?_r=1

(p. W6) When it comes to chronicling the Bacardi rum dynasty, the best model may be “Buddenbrooks” or some other novelistic attempt to capture the experience of a family business trying to survive across generations. Tom Gjelten’s “Bacardi and the Long Fight for Cuba” — though fact-driven history and far more upbeat that Thomas Mann’s tale of dynastic decline — feels very much in this literary tradition.
. . .
Perhaps the most fascinating figure in the Bacardi tale is José Bosch, called Pepín, a young businessman who also married into the Bacardi family and was an early opponent of Gerardo Machado’s corrupt rule in the 1920s. Machado made Bacardi, one of Cuba’s most successful companies, a target of predatory taxation, but a proposed rum tax was more than the distiller could stand. Bacardi opened new facilities in Mexico and threatened to move its operations there if the tax was enacted. The Cuban legislature dropped the idea — and Bacardi soon found itself with a Mexican distillery it didn’t need, trying to sell a liquor to tequila- quaffing public that didn’t want it.
Bosch was dispatched in 1933 to shut down the Mexican facility, but instead he saved it. “Noticing that Mexicans drank a lot of Coca-Cola,” Mr. Gjelten writes, Bosch urged the company to promote Bacardi-and-Coke cocktails. Observing the rich tradition of Mexican handicrafts, he also suggested that the locals would be more inclined to drink rum if it was sold in the sort of wicker-covered jugs often used for it in Cuba. Sales in 1934 doubled.

For the full review, see:
ALVARO VARGAS LLOSA. “The Family Spirit.” The Wall Street Journal (Fri., September 12, 2008): W6.
(Note: ellipsis added.)

The book being reviewed, is:
Gjelten, Tom. Bacardi and the Long Fight for Cuba: The Biography of a Cause. New York: Viking Penguin, 2008.

Paul Romer Looking to Found a “Charter City”

Romer’s idea of setting up a Charter City sounds like a more advanced version of a free trade zone. It might work if you could find a well-governed nation to serve as guarantor of the city’s charter. That’s a big “if.”
Still, it’s a more intriguing idea for advancing economic development than most of the default policies (like sending foreign aid to be stolen by corrupt dictators).

(p. A2) For the past couple of years, economist Paul Romer has been hopscotching the globe looking for a country desperate enough to try his audacious notion: Start a new “charter city,” an enclave free of old laws and practices, as William Penn did in Pennsylvania. (Think “charter school,” a school free of union contracts and school bureaucracy.)

. . .
About a decade ago, he walked away from academia, started an online teaching company, sold it and then turned to his next big idea: To create jobs to lift millions out of poverty, take an uninhabited 1,000 square-kilometer tract (386 square miles), about the size of Hong Kong, preferably government-owned. Write a charter: the all-important rules. Allow anyone to move in or out. Invite foreign investors to build infrastructure for profit. And sign a treaty with a well-governed country, say Norway or Canada, to serve as “guarantor” to assure investors and residents that the charter will be respected, much as the British once did for Hong Kong, and–. . . .

For the full story, see:
DAVID WESSEL. “CAPITAL; The Quest for a ‘Charter City’.” The Wall Street Journal (Thurs., FEBRUARY 3, 2011): A2.
(Note: ellipses added.)

Grammar Mavens Are “Guilty of Turning Superstitions into Rules”

Source of book image: http://static.letsbuyit.com/filer/images/uk/products/original/132/76/the-lexicographer-s-dilemma-the-evolution-of-proper-english-from-shakespeare-to-south-park-13276063.jpeg

(p. C29) It’s getting harder to make a living as an editor of the printed word, what with newspapers and other publications cutting staff. And it will be harder still now that Jack Lynch has published “The Lexicographer’s Dilemma,” an entertaining tour of the English language in which he shows that many of the rules that editors and other grammatical zealots wave about like cudgels are arbitrary and destined to be swept aside as words and usage evolve.
. . .
“Too often,” he writes, “the mavens and pundits are talking through their hats. They’re guilty of turning superstitions into rules, and often their proclamations are nothing more than prejudice representing itself as principle.”
And, as he notes in his final chapter, the grammatical doomsayers had better find themselves some chill pills fast, because the crimes-against-the-language rate is going to skyrocket here in the electronic age. There is already much whining about the goofy truncated vocabulary of e-mail and text messaging (a phenomenon Mr. Lynch sees as good news, not bad; to mangle the rules of grammar, you first have to know the rules). And the Internet means that English is increasingly a global language.

For the full review, see:
JANET MASLIN. “Books of The Times; This Is English, Rules Are Optional.” The New York Times (Mon., May 4, 2009): C4.
(Note: ellipsis added.)
(Note: the online version of the article is dated May 3, 2009.)

The book being reviewed, is:
Lynch, Jack W. The Lexicographer’s Dilemma: The Evolution of ‘Proper’ English, from Shakespeare to South Park. New York: Walker & Company, 2009.

Chinese Encyclopedia Was Burned to Protect Monopolies Granted by Emperor

(p. 262) As with Tudor England, government monopoly of patronage meant control. Virtually all copies of the seventeenth–century Chinese encyclopedia, the T’ien Kung K’ai-wu or Exploitation of the Works of Nature, which included illustrations of everything from hydraulics to metallurgy, were destroyed because, according to Joseph Needham, much of the material touched on industries that had been granted monopoly status by the Qing emperors: “The absence of political competition did not mean that technological progress could not take place, but it did mean that one decision-(p. 263)maker [i.e. the Emperor] could deal it a mortal blow.” It is therefore no surprise that a high percentage of both the inventions and inventors we associate with China from the time of the Han Dynasty to the Qings were government sponsored and employed.

Another liability of a strong central government is that it is, well, strong. Europe’s fragmented system of sovereign states made it possible for innovative minds such as Paracelsus, Leibniz. Rousseau, and Voltaire to “shop” for more congenial places whenever they skated too close to heretical or otherwise challenging notions; in China, one had to travel a thousand miles to a place where the empire’s writ ran not.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: italics and bracketed words in original.)

Luther Burbank’s Income Suffered Because His Inventions Could Not Be Patented

“Luther Burbank pollinating poppies in Santa Rosa, Calif.” Source of book image: online version of the NYT review quoted and cited below.

(p. C4) There is a particular type of potato at the heart of Jane S. Smith’s book about Luther Burbank, a man who described himself as an “evoluter of new plants.” Ms. Smith nicknames that potato “the lucky spud.” That turn of phrase is one of many reasons to appreciate “The Garden of Invention,” her colorful, far-reaching book about the genetic, agricultural, economic and legal issues raised by Burbank’s life and legend.
. . .
This book takes more than a passing interest in Burbank’s income, insofar as it reflected his legal ability to protect his scientific advances. In his early professional years he grappled with the doctrine that held that while a gold mine was real property and a machine to extract gold was intellectual property, the actual mineral belonged to anyone who could find it; ditto with potatoes. Throughout his career, even as he developed friendships with tycoons like Ford and Thomas Edison, Burbank lived under constant financial pressure to keep creating new plant products. “His income was entirely dependent on his latest marvel,” Ms. Smith writes

For the full review, see:
JANET MASLIN. “Books of The Times; The Curious Man Lucky Enough to Create ‘the Lucky Spud’.” The New York Times (Mon., May 4, 2009): C4.
(Note: ellipsis added.)
(Note: the online version of the article is dated May 3, 2009.)

The book being reviewed, is:
Smith, Jane S. The Garden of Invention: Luther Burbank and the Business of Breeding Plants. New York: The Penguin Press, 2009.

The Story of Spielberg’s “World-Changing Movies” Deserves “a Detailed, Impassioned and Insightful Telling”

(p. 20) . . . , LaPorte combines tabloid celebrity worship with an older oddity: the incongruous fact that a free market also produces resentment, especially when a competitor like Spielberg demonstrates leadership, superior achievement and undeniable success. He’s one of the few filmmakers still committed to exploring the human condition — and in popular terms. This is what sets him apart and makes him admired, envied and even inscrutable to those who think only in craven terms of business and royalty.

. . .
So it’s a tabloid book. We can only hope it doesn’t become the historical record. LaPorte undermines her research with a headachy repetition of anonymous informants (“one insider,” “one former executive,” “one source”). She concludes that “inherent in all of it was hubris.” But a story this significant, about world-changing movies, doesn’t need homilies. It needs a detailed, impassioned and insightful telling, one that would help us better appreciate a frequently misunderstood, underinterpreted pop artist whose work connects with the public, defines the complexities of human experience and dwarfs most of contemporary Hollywood’s output. DreamWorks calls for a sensitive sociologist — a Tom Wolfe or a Norman Mailer or a Pauline Kael — who can discern the deep, divided heart of Hollywood.

For the full review, see:
ARMOND WHITE. “The Big Picture.” The New York Times Book Review (Sun., July 11, 2010): 20.
(Note: ellipses added.)
(Note: the online version of the review is dated July 9, 2010.)

The book White credibly pans is:
LaPorte, Nicole. The Men Who Would Be King; an Almost Epic Tale of Moguls, Movies, and a Company Called Dreamworks. New York: Houghton Mifflin Harcourt, 2010.

Did Bell, or Gray, Invent the Telephone?

Source of book image: http://www.xconomy.com/wordpress/wp-content/images/2008/01/telephone-gambit.jpg

A great and important debate is occurring about the desirability of the patent system. Should it be abolished, or reformed? If The Telephone Gambit book is right, one of the spectacular failures of the system is in the awarding of a patent to Bell for the telephone.
That’s a big “if”: some of the reviewers on Amazon give reasons for doubting Shulman’s story.
I hope to have time to look into this further.

(p. D10) It was a brilliant concept. But was it Bell’s? What had happened during his trip to Washington that allowed Bell to abandon the blind alleys he had been exploring and to suddenly, not incrementally, find the technological solution?

The answer to that question is a tale involving high-powered Washington lawyers, political influence, a patent clerk with a booze problem, and improper access to Elisha Gray’s patent filing, where Bell found the secret to making the telephone work. Mr. Shulman lays out the evidence — documentary, scientific, chronological and psychological — piece by damning piece. He shows most impressively how Bell’s subsequent behavior and actions are entirely in keeping with those of a decent and honorable man having to live most of his long life (Bell died in 1924) with the knowledge that behind his fortune and his fame lay a single instance of brazen dishonesty, of intellectual theft.
“The Telephone Gambit” is solid history, and Seth Shulman makes it as much fun to read as an Agatha Christie whodunit by using the techniques of historiography the way Hercule Poirot used his “little gray cells.” That’s no small accomplishment.

For the full review, see:
JOHN STEELE GORDON. “False Claim, Future Fortune.” The Wall Street Journal (Fri., JANUARY 16, 2008): D10.
(Note: ellipsis added.)

The book being reviewed, is:
Shulman, Seth. The Telephone Gambit: Chasing Alexander Graham Bell’s Secret. hardback ed. New York: W. W. Norton & Company, 2008.

“A Great Artisan Can Make a Family Prosperous; A Great Inventor Can Enrich an Entire Nation”

(p. 247) We feel real poignancy when we recall the bucolic life (even if we do so through the soft focus of nostalgia) of a country weaver happy in his work skills and content with his life. But those skills, like those of a medieval goldsmith or an ancient carpenter, could not, by their very nature, reproduce themselves outside the closed community of the initiates. One lesson of the Luddite rebellion specifically, and the Industrial Revolution generally, is that maintaining the prosperity of those closed communities–their pride in workmanship as well as their economic well-being—-can only be paid for by those outside the communities: by society at large. A great artisan can make a family prosperous; a great inventor can enrich an entire nation.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

Bloggers See Bad Conditions for Entrepreneurs

The chart above and the one below are from the recently-released results of the First Quarter 2011 influential blogger survey conducted by the Kauffman Foundation. (Tim Kane gave permission to put the charts on my blog.) artdiamondblog.com is one of the blogs included in the survey.

The results above show a perception that conditions are currently tough for entrepreneurs. The chart below displays one of the main reasons: the current economy is perceived as uncertain and fragile. There are many reasons for the uncertainty, but one of them is surely that the bloggers have doubts about the depth of support in government for the institutions and policies upon which entrepreneurship depends (like private property, restrained regulations, and low taxes).

For a full PDF report on the 2011 Q1 survey results, see:
http://www.kauffman.org/uploadedfiles/econ_blogger_outlook_q1_2011.pdf