Abstract Ideas are not Patentable, Long Live Ideas

On June 19 of this year, the Supreme Court passed down what some consider to be a landmark decision, Alice Corp. Pty. Ltd. v. CLS Bank Int’l. The short of it is that an abstract idea alone cannot be patented. This is not a new rule by any means. But figuring out what constitutes an abstract idea and what pushes an idea over the patentability edge has always been a struggle.  Though this recent decision did not provide much extra guidance, it did solidify what appeared to be a waning rule: you can’t, like, OWN a basic concept maaaaan.

One of the first, and perhaps the most famous applications of this rule was in 1854 when the Supreme Court told Samuel Morse that he could not hold a patent on the use of electromagnetism to transmit messages. Since then, the rule has ebbed and flowed at all judiciary levels, several times appearing to nearly fizzle out or change to allow patents on basic concepts that can be used to make money. But the rule has come back stronger than before. In 1972, the Supreme Court used the rule to invalidate a patent on a mathematical algorithm for converting numbers in binary-coded decimal form into pure binary form, stating that “[a]n idea itself is not patentable.”  Again in 2010, the Supreme Court struck down a patent on hedging risk in commodities transactions.  And now, in Alice Corp., the same court invalidated a patentee’s exclusive rights on using a computer-mediated transaction auditor to hedge default risk. 

This makes sense.  After all, the point of patent law, according to the U.S. Constitution, is “to promote the Progress of Science and useful Arts.” Arguably, patents bestowing rights to exclude others from using basic ideas would harm, not promote that goal. 

But nowhere is it written that unpatentable abstract ideas have no value. The law is simply that you cannot get exclusive monopoly rights on such ideas. We at ideaphore challenge the concept that an unpatented, or even a yet-untested, idea has no value at all. It is only because there has been no outlet for them – no way to turn them into money – no way to be recognized for them – and no way to protect them in transit to a company that could use them – that people have held back their best ideas. That is, until now. 

What can we do with an idea if it is too abstract or if we are not interested in spending the money to find out whether it is patentable? We at ideaphore are proposing a new system: pitch enough of the idea to get interest without giving everything away and then sell the rest, together with all of the thought and all of the work you have already put into it, at a fair market price. That is the basic premise of ideaphore.

Inspiration often strikes randomly and without regard for patentability. And the thought, work product, research, writing, and prototyping that follows inspiration is often very valuable.  When it is valuable, the inspired would often rather sit on the product of their inspiration than to give it away for nothing, even to someone who can use it.

Just because an idea is basic or small does not mean that a particular employee at a particular company has considered whether it would bring value to that company. Sometimes the best innovations come from answers to questions you never thought to ask.

Long live ideas. 

Sign up for updates and to test drive our Beta.

Breaking Down Walls

At ideaphore, we have made it our jobs to break down the walls that have been built between businesses and their customers. The imaginary walls erected to make it seem as though the only way to find out what your customers want is to do so secretly, behind closed doors and one-way mirrors, and through a myriad of hooks and crooks.

Your suggestion box is dated, dangerous, and difficult for customers to find.  Your surveys ask the wrong questions and the wrong people respond providing limited insight amidst a lot of noise.  Your support forum and website usage analytics capture problems, not solutions and are expensive to mine.

You will stare at heatmaps of where people clicked on your site and charts of how long they stayed on what page. You will mine all the hashtags and sift through all that is trending.  You will go on time consuming coffee dates with people in the industry whom you hope have useful insight that they are willing to give away for free.  And you will read tons of emails, support tickets, and message boards with absolutely no intellectual property protection for the things that you and your employees read. These are all inadequate tools that provide some useful data that you can use for your business.

Nothing compares to the power of just telling your customers and potential customers that you are listening. Nothing beats telling them exactly what terms you are willing to listen to their feedback on. Nothing removes the fear of sharing ideas better than both sides understanding what contractual terms govern the conversation, before the conversation begins.  And if you pay the best idea creators, the ones that keep coming back with great insights that inspire your employees to think and act, the ones that provide you with the best negative and positive feedback, then the wall impeding trust and understanding comes tumbling down.  You can finally look your customer in the eye, and they you.

Click Here To Sign Up To Play With Our Beta

Open Innovation is the New Paradigm

In 2003, the world of corporate research and development (R&D) took a giant, if somewhat quiet, leap forward. That year, Henry Chesbrough announced in his book that we were experiencing a Kuhnian Paradigm Shift. The kind of shift that is only recognized when the current principles can no longer explain what is happening. The kind of shift that is so important that it’s named after some philosopher dude. The old paradigm, Chesbrough dubbed “closed innovation” – and the new paradigm: “open innovation.”

In the closed innovation world, everything is done inside the building. You place your employees within the four walls you have built and they do everything. They think of the product. They keep it a secret. They research it. They build it. They test it. They bring it to market. They service it. They think of improvements. And they update it. And this all keeps going in a circle until, for some reason, customers stop buying your products.

Open innovation looks outside the four walls of your building for both the R and the D. It brings ideas from the outside and allows you to mix them with your internal ideas and knowledge to build products. And it provides a channel for you to build ideas in house and sell them to others. 

This seems obvious now – almost second nature – especially with everyone becoming electronically networked. But it went completely against the grain of the most successful and famous companies on the planet. Every company thought that they had hired the best, trained them the best, and that their employees had all the answers.  They only internalized ideas that came from employees they controlled, which makes the universe of creative minds very small. And what do outsiders know anyway? 

They know a lot.

Several societal changes have taken place that pushed us into this paradigm shift.

• Information and knowledge are now more widely spread out. Skilled employees have more mobility to go from one company to another. This makes company secrets more difficult to keep in-house.
• There is an increasing number of college graduates and skilled foreign workers.  And people can live and work from almost anywhere. There are more people who can solve complicated problems and they are more spread out.
• Increased access to venture capital means that things can move faster. The time it takes to get a product to market or even to change it after it is already out there has been shrinking at a thrilling rate. And the shelf life of technology has been getting shorter and shorter.

All these changes mean that closed innovation is not sustainable for most, especially small, companies. 

It’s not that Chesbrough invented the concept. Proctor and Gamble started its open innovation initiative back in 1999. But Chesbrough’s book drove a giant thumbtack into the R&D roadmap of every company. There is now a stark noticeable difference between closed and open innovators. You can tell an open innovator by their agility, notoriety, and the love of their customers.  And while some closed innovators still thrive, they are now outnumbered.

With the advent of the lean startup movement pioneered by Steve Blank and Eric Reis, building a startup product or service is about getting feedback from customers and potential customers. The customer is involved early and constantly. This provides businesses mobility that they never had before. If businesses can get customers and potential customers thinking about what problems they need solved and sharing those thoughts, the business can make moves within the industry faster, with more confidence, and with a higher success rate. A company that builds products based on the educated guesses of their own employees cannot keep up with an open innovator. It’s not (just) that employees make mistakes, it is that their thought process becomes constrained to trying to please their boss rather than the customer. Between crowdsourcing, crowdfunding, and the agile development/customer development stack, a startup or new venture cannot get off the ground without open innovation.

All this open innovation gets complicated for the customer and the business. We think the conversation between a business and its customers and other creative individuals should be simple and available to everyone. And that’s exactly what we have done. If you’re excited about collaborating to create tomorrow’s best products and services, wait until you see what we have in store. When we get going, we will go from experiencing a paradigm shift to having experienced it. 

Sign up for updates on our startup.