From Idea to Intellectual Property – Season 2 Episode 2: That will never catch on!

So it was 1993, computer law, at the University of Melbourne, and we’re all shown into this lab.

There was one computer, and it was linked to another computer in another university.

And as we waited, there was a modem sound.

Then a green screen with a blinking cursor.

The lecturer said, So class, that was the Internet.

We shuffled out.

I turned back to the rest of the class, and I said to them all, Ah, the Internet, that will never catch on.

What makes something catch on and others fail?

And how do you pick them?

Hello, I’m Lisa Leong, and this is season two of From Idea to Intellectual Property.

It’s a podcast about today’s big ideas and the IP considerations behind them.

Dr.

Francis Gurry is a former director general at the World Intellectual Property Organisation.

He was recently awarded an Order of Australia for his distinguished service to IP, research and tertiary education.

And he’s a strategic advisor for IPH.

Hello, Francis.

Well, it’s hard to pick the winners.

I’ve got a patent for you.

US Patent Number 200521.

The invention consists in arranging a plate, diaphragm or other flexible body capable of being vibrated by the human voice or other sounds in conjunction with a material capable of registering the movements of such a vibrating body by embossing or inventing or altering such material in such a manner that such registered marks will be sufficient to cause a second vibrating plate or body to be set in motion by them and thus reproduce the motions of the first vibrating body.

I must admit, I don’t think it will catch on.

Francis, could you tell us a little bit about this patent?

Sure, Lisa.

So that’s Thomas Edison’s patent application for the phonograph.

And you know, there are many, many patent applications filed around the world, but very few of them are fundamental, really fundamental.

So he filed that in 1877, I think, and it was granted in 1878.

And it was an invention essentially for recording sound and reproducing it.

Well, people said, what are you going to do with that?

What’s it for?

There he put it out in a magazine called the North American Review in 1878, and he said, well, here are some of the uses.

The reproduction of music, and of course it was the foundation of the music recording industry that we’ve known for the following 140, 50 years.

With Prescience, he foresaw what we’re doing, podcasts.

He said, well, this can be used for educational purposes.

You can record a teacher and then replay it back.

So podcasts, I don’t think, came around until the internet, which you famously predicted.

And then he also foresaw audiobooks.

He said, this is a good way of you can read it in the text of a book into it for blind persons.

Again, 100 years before this was commercialized on a widespread basis.

And the dictation machine.

He said, you can dictate to a stenographer instead of doing it live.

So he really foresaw, well, he was a genius.

He really foresaw extraordinary uses from this well before any of those were commercialized in a major sense.

Let’s go to one genius invention.

US patent number 400131919 filed by engineer Steve Sass.

The field of invention.

This invention relates in general to electronic imaging apparatus, and in particular to an electronic scale camera that employs a non-volatile reusable storage medium for recording scene images.

This was, of course, the digital camera, and Steve Sasson was an engineer working for Kodak in 1975.

This is a very interesting case study, isn’t it, Francis?

It’s a great case study, Lisa, because you had, with digital photography, a fundamentally disruptive technology.

So it was going to disrupt all the forms of photography that we had previously, and you need someone who had the commercial NAS to be able to say, oh, that is going to catch on, and that is going to be the basis of photography henceforth.

You know, a pioneer in photography, missing being able to read the direction which technology was going, even though they invented it.

That’s quite an interesting example of how companies always have to be looking for the disruptive technology that’s coming along.

Francis, why is it so hard to pick winners?

Yeah, well, I think the simple answer to that is that if it was easy, we wouldn’t need a venture capital industry.

But we have venture catalysts, and they’re there because they are…

Chief task is financing, of course, but picking the winners to finance.

And that’s extraordinarily difficult.

You have to link the technology to the market.

So it takes a long while to construct a market.

People have to be convinced that this new invention is somehow useful to them.

It’s going to improve their lives in some way.

That’s reasonably easy in the health field, but it’s not so easy in some of the consumer tech inventions to which we’re very used now.

And there are, I think, many, many, many examples of inventors seeing things at an early stage.

And one of the great things that the patent system does for us is to get this technology out into the open because all patent applications are published.

And that way we have a library, which is really a history of humanities technology.

Francis, what is one example of how the patent system gets inventions out in the open for the benefit of humanity?

Well, let’s take the example of the saxophone.

See, the saxophone was patented by Adolphe Sax, who was a Belgian, patented in France, in 1848.

Now, over the course of the following 20 years, and indeed further, further patents were filed by Sax, but by other people, improvements.

He was trying to solve a fundamental problem, which was he wanted to have an instrument which had the softness of the wind instruments, but that would be able to be used in the context of what was very popular at the time, the outdoor bandstands that we still see in the parks.

But the woodwind instruments kept getting drowned out.

The invention he came up with, which had the softness of the woodwind.

And then we fast forward, let’s fast forward, you know, 20 or 30 years, and the patent is disclosed, the method of manufacturing is disclosed, and the patent right has ceased, and anyone can use that technology, anyone can make a saxophone.

Now, compare that to violins, where musicians tell us, musicologists tell us, the very best violins were made in Cremona, in Italy, at the beginning of the 18th century.

(*violin playing*) Where you had Stradivari, and you had Guarneri, making these fantastic stringed instruments, and the violins in particular, but the method of transmission of knowledge there was family workshops, and it was kept secret.

And the result is that to this day, we still really don’t know what the secret was to make those very best violins that have ever been made.

So the patent systems, the sax, is a very good example of the contribution, the benefit of the patent system.

So it sounds like the patent system is best for competitors rather than the original inventor.

Oh, yes, it’s a very good point that you make.

Yeah, it’s an enormously rich source of technological and economic intelligence.

Because if you look up, let’s take Apple, for example, you look up what’s coming out.

And in fact, if you were following Apple’s published patent applications, you would have seen that the smartphone had been, a patent for it had been applied for by Apple about three months before it was commercialized and on the market.

So you could have read that.

Now, since that example, companies have aligned their patent publication cycles with their product cycles and marketing cycles, so that there’s no advanced information put out by the patent system as it were.

Nevertheless, it’s an enormously important source of information because you get the technology.

And if you look at a particular company, for example, in a patent database, you can see which areas of technology they’re patenting in.

So what areas they consider to be important and what they’re working on.

And furthermore, by where they are patenting around the world, which markets are of interest to them.

Francis, you’ve had such a great perspective and purview across patents worldwide and patent development.

What would you say is the greatest thing that the patent system brings to encouraging incredible innovation and inventions that turn into big things like the phonograph changing the way in which we communicate, the saxophone changing the way we listen to 80s music and the like?

Yeah, so I think it’s definitely the reward incentive.

Now, a lot of people will, scientists have a love of science and they’ll continue to discover and to invent even if there’s no reward.

But people have to make a living.

They have to be able to have a viable economic existence.

And so the reward that you can get through a patent, that is having exclusive rights to the commercial exploitation of the invention, is exceptionally important role.

That’s, I think, role number one.

And the second role is to give the inventor a safe period to travel across what’s often called the Valley of Death.

You’ve got your idea, but you’ve got to have that idea commercialized in a way that it’s returning sufficient funds for you to be able to continue to invest in it and to create the market.

And one of the first questions that any venture capitalist will ask an inventor is, well, it’s a very nice idea, have you got protection for it?

Because we’re not going to invest in it if anyone else can just take the idea and build a commercial enterprise on it.

So I think it’s an indispensable part of an healthy and effective innovation ecosystem.

Francis, can you tell us more about the Valley of Death?

It sounds scary and dark.

Well, it’s that period, you know, when that all these startups are experiencing in a major way at the moment because of the shortage of, because the economic distress that’s around and venture capital is drying up, the appetite for taking risk is reduced.

So right now we have a period in which this Valley of Death is particularly pronounced or very dangerous.

And it’s the time where there are several stages of financing for an invention, and they get their initial funding to bring the idea into some commercial form, and then they will get a second round of funding, which will be further and a third round, and so on.

During this time, they have to get out in the market and start to get some return in such a way that the investors are going to recognise that this is something that they should continue to invest in because it’s on an upward curve.

So it’s that period of experimentation and commercialisation, which is so vital to innovation.

Have you got a case study, Francis, which might bring to life how somebody has sailed across the valley of death and come out the other side?

Well, one of the things that we’re seeing at the moment, I think, is that the take up of some successful new technologies is much quicker.

Now, take ChatGPT.

In the world of artificial intelligence, there’s been one name that’s been on everyone’s lips lately.

ChatGPT.

OpenAI, the San Francisco-based startup that created ChatGPT, opened the tool up for public testing in November 2022.

In under a week, the AI model amassed over a million users, according to OpenAI’s CEO.

If you go back to television, television took a long period to get to one million users.

And then you go through various other technologies, the internet, and now ChatGPT, it was like in two days, three days.

By the end of January, ChatGPT was averaging about 13 million visitors per day.

And now it’s exponential.

So if you really hit the jackpot and you really have something that people appreciate and it fills a vacuum, then we’re seeing this valley of death shorten so much.

Finally, Francis, is there a pattern that you’ve been following that you really hope will catch on?

Well, look, I think the thing, the action is moving rapidly into the life sciences area.

We’ve been saying the promise of biotechnology, the promise of biotechnology all the time, without it really being out there.

Imagine the ability to cure genetic disease for generations to come, to inoculate the human race against the next COVID-19 before it becomes a pandemic, or in a darker scenario, to choose the color of your baby’s skin.

Dr.

Jennifer Doudna pioneered a technology that may one day be able to do just that, one of the biggest scientific breakthroughs of our lifetimes.

I think now this fundamental invention, the CRISPR Cas9 gene editing, that’s a really fundamental invention again.

It’s called CRISPR, a bacterial defense system that can edit genetic material.

It already shows promise in eradicating malaria mosquitoes, appearing to cure patients with sickle cell anemia, improving cancer therapy and diagnosing COVID-19 more quickly.

And at the height of the pandemic in 2020, Doudna, along with Emmanuel Charpentier, won the Nobel Prize in Chemistry for their CRISPR innovations.

And like all fundamental technologies, it introduces an enormously beneficial range of possibilities that also has danger.

For example, scientists at the moment have a moratorium on gene editing in a hereditary manner.

So you can edit a gene to rectify a defect or to cure a disease, but there’s a moratorium on doing it in such a way that the progeny of the person whose genome is altered inherits the altered genome.

So that’s a whole new pioneering area which is gonna be with us in a massive way socially in the future and politically, because important decisions are gonna have to be taken as the technology advances and advances and advances.

Thanks so much, Francis.

Thank you, Lisa.

It’s always a pleasure.

That was Francis Gurry, strategic advisor to IPH, former director general of the World Intellectual Property Organization.

Thanks to our producer, Kara Jensen McKinnon.

This podcast is brought to you by IPH, helping you turn your big ideas into big business.

And I’m your host, Lisa Leong.

Bye for now.