Is Defensive Publishing Appropriate for Small Businesses?

IBM has announced its plans to expand "defensive publishing" rather than patenting as a means to protect its intellectual property. A patent prevents others from practicing the specifics that are covered by the patent, but opens up a Pandora's box of potential work-arounds and litigation. Defensive Publishing is in essence placing IP into the public domain, rendering it thereby unpatentable by anyone, even the inventor.

Since public domain knowledge can be cited as prior art against patent applications, the onus would rest on any subsequent inventor to prove novelty beyond whatever is covered by the defensive publishing. Such an approach would allow IBM or anyone else to practice their art, to use the IP that has been published, making it more difficult for others to restrict that practice by means of a patent.

I have considered this an approach, easier and cheaper than preparing and submitting patent applications, then waiting the 2, 3, 5 years it takes to hear whether it's been approved or denied. The fear for a small business is that while a company like IBM has name recognition and a reputation to rest on, a small little-known quantity like my firm may easily be swallowed up. Were I to engage in defensive publishing, it would protect the ideas in preventing others from restricting my ability to practice them. But it might ring the death knoll of my company.

The fear is that as soon as those ideas become valuable, a large company with a top-notch marketing team, a long-standing reputation and credibility might simply scoop up the ideas, rebrand them, and put me out of business. It's a tough call, a very tough call. Because in the heart of, I'm a researcher. Far worse than going out of business would be for the ideas to never see the light of application.

But am I ready to prepay my company's cemetary plot, in hopes that we won't need to use it any time soon?

Harry Reid: Remiss of Duty

Senate Majority Leader Harry Reid circumvents the efforts of the leaders of the Finance Committee to strip the current Jobs bill of Small Business provisions. Just who does the leadership in Washington think will create jobs in this country?

Contact your Senator to do something about it!

Is China's Growth Unsustainable?

Of course, all things good and bad come to an end. The Economist's Robin Bew is projecting an 8%+ growth rate for China's economy in 2010. But a little talked about statistic may soon end China's hubris. As The Economist reported back in December, the year 2010 will likely mark a major milestone in China's demographics.

Largely a result of China's one-child policy, the percentage of the population dependent on others (mostly the elderly and the young) will begin to rise for the first time in decades. Over the coming years, as fewer and fewer active workers support greater numbers of pensioners, we will see China's economy plateau and then shrink. I wonder what the ramifications of this demographic shift will be on governance? Only time will tell.

Inside Boxes

In an article ostensibly lamenting the collateral impact of increased security for America's borders, the following sentence appears:

Among postdoctoral students doing top-level reasearch, 60% are foreign-born.

Putting aside the implication that native-born doctoral students are somehow subpar, I wonder at the worldview that might make sense of such a statistic. Just what could "top-level research" possibly mean objectively? By what stretch of the imagination might we constrain cutting-edge research into manageable gradations, such that some students' research could be deemed top-level, mid-level, low-level, remedial?

It would seem that such a worldview might in part be to blame for what Commerce Secretary Gary Locke has described as a broken innovation ecosystem. If innovation is stifled in America today, a large part of the blame rests in the assumption that the value of research can be known in advance, that such value can be assigned on the basis of what is already known, rather than on the basis of what is yet to be discovered.

At the risk of repeating myself, it is to support and sustain the discover of new innovations that there is such a need in the economy for seed funding, small pots of money to sustain a spare few researchers testing the mettle of their ideas, and driving the successful attempts to market. The Small Business Innovation Research program (SBIR) is one of the few sources for such seed funding, and just now it's being held hostage to the whims of the House Small Business Committee, in particular the committee's Chair, Nydia Velázquez, and Ranking Member Sam Graves. Their maneuvering has kept the SBIR program from reauthorization for two years now, doling out so far six short-term continuing resolutions. Whatever their motivation, support for innovation and small businesses is not among them!

Can Karen Mills pull it off?

SBA Administrator Karen Mills talks with NPR's Renee Montagne. It's good to hear all the recognition of the value and contribution of small businesses in creating jobs. Let's get on with it!

Listen here:

Direct Lending to Businesses

The New York Times reports on a small business owner's question posed recently to President Obama during a town hall meeting in Tampa, Florida. Steve Gordon's proposal was that if the government is to be involved in supporting loans to small businesses, why not lend directly to those small businesses? Obama's response was to explain that the SBA doesn't have the infrastructure in place to process and oversee direct loans; that local banks are better able to handle such loans more efficiently. The frustration of course is that even these local banks are still lending too little, too late.

Interestingly, this comes on the heels of the President's renewed pledge to do away with subsidies to support private lending to students, in favor of an expanded Direct Student Loan program. One difference perhaps is that the Direct Loan program already has in place the infrastructure to handle these loans. Regardless, there are still those who resist such a move toward reducing wasteful and inefficient government subsidies.

Is there any reason that the SBA and the Direct Student Loan programs couldn't team up to handle small business lending as well? With all the talk of increasing partnerships between universities and entrepreneurs, wouldn't such a pairing be an appropriate first step?

It is a valid question and worthwhile discussion to be had: what is the most efficient means for utilizing existing government revenues for the purpose of supporting and sustaining the development and growth of job-creating businesses?

Hidden Agenda in Supreme Court Decision?

No, I can't speak from any inside information, nor do I have the stomach to fathom or dissect the motivations of Supreme Court Justices. But the recent decision regarding campaign finance has a hidden impact that seems to be largely overlooked in the tumult of coverage:

Who has the most to gain from a greatly expanded and lucrative market for self-interested campaign ads?

I'll give you a hint: where will those ads appear? With all the widespread talk of trouble in the media world; with even Rupert Murdoch lambasting Google for republishing media content for free; newspapers dying; television advertising suffering...

Got the picture? Campaign ads provide a potential windfall for those advertising platforms currently suffering an immense reduction in revenues. The National Small Business Association implies as much in their reporting. Could the Supreme Court's ruling be influenced in part by the economic misery of traditional media? No telling. The results will likely speak for themselves!

Commerce Secretary Locke almost gets it

U.S. Secretary of Commerce Locke seems to have a sense that innovation is what drives an economy, that supporting entrepreneurship is key. Yet, the worldview he presents of where innovation comes from is deeply entrenched in the idea that smart ideas come from universities, and entrepreneurs' role is essentially limited to bringing smart university folks' ideas to market.

[Commerce Secretary Gary Locke Announces Plans for Forum on R&D Commercialization at Universities]

The problem that Secretary Locke seems to miss is that:

The university system is BROKEN! The rewards and incentives are not extant for the majority of the country's best and brightest innovators, who fall through the cracks of a broken university system!

There are simply not enough research faculty positions to employ the great bulk of innovative thinkers who are not hired for standard faculty positions because they're focused on researching new ideas that don't easily fit within the confines of traditional and change-averse disciplines, who are therefore erroneously judged to be less-qualified or less-desirable as teachers. Those who are granted tenure track positions are quite often bogged down with too many classes, too many students, and too many committee assignments to effectively teach and research.

If we really want to leverage the capabilities of our universities and entrepreneurs, we need to strengthen both! If we want a real stimulus to the innovation economy, we must:

• Provide the framework for universities to double their research faculty.
• Judge universities on the percentage of their doctoral graduates who are fully and appropriately employed upon graduation, and create incentives for those who are most successful in this regard.
• Provide the incentives for innovative thinkers to create, sustain, and grow their own research businesses (NEXT HINT: SBIR!)
• Enough with the dilly-dallying: let's remove the roadblocks to reauthorization; let's remove the hindrances and watering down of a truly cost-effective, job-creating program and get SBIR pushed ahead.
• Double the allocations (to 5%); keep award sizes within reason; retain the three-phase system; seed the ideas that drive the economy!

That's how to create a Research Entrepreneur economy! We want people who are equally passionate about research as about business. And we need to secure the environment where ideas thrive and are cultivated into proofs-of-concept; proofs are coaxed into prototypes; and prototypes are driven into the market.

Get on with it Washington!