Wednesday, May 29, 2019

Don’t Let Your Sight Indict My Blindness

You probably never heard of Michael Servetus.  That’s fine because he was a heretic and was burned at the stake atop a pile of his own books – and green wood – under the orders of John Calvin on October 27, 1553.  And thank god for that.  Because if you describe yourself as a “Christian” today, Calvin’s accommodation of Catholic dogma kept doctrinal coherence to the “faith” that silly Michael sought to hold accountable to its own sacred texts.  The notion that the statement in John 1:14 – “…the Word was made flesh, and dwelt among us…” implied that Jesus came from God and was therefore not a temporal co-equal in the illusion of the Trinity was so dangerous that the thinker had to be executed.  Never mind the fact he was the first physician to correctly understand the role of the heart, blood and lungs in keeping the human body alive.  Forget his contribution to astronomy by calculating the occultation of Mars by the Moon.  He questioned a 1,200-year-old dogmatic illusion.  He must die!

Newton to Aristotle and Descartes; Galileo to Pope Urban VIII; Copernicus to Ptolemy; Alexander Winton to horses and carriages; what is it about “belief” that is dependent on extermination of observation?  It’s one thing to hold oppositional perspective.  Two observers of the same fact, pattern, occurrence or phenomenon may process the “same” observation differently.  This interaction can enrich knowledge by the plurality of perspective.  That is in stark contrast to observation held in opposition to unquestioned (or unquestionable) dogma, consensus inertia, or “belief”.  Far from enriching knowledge, this begets an existential crisis and provokes the impulse to exterminate the heretic.

An editorial note: these observations are just that – observations.  I don’t make them because “I’m right”.  I make them because they’re a perspective I have. 

Over the past 25 years, I’ve been immersed in the world of intellectual property while living here in Charlottesville Virginia – home of Thomas Jefferson.  In his letter in 1813 to Isaac McPherson, Jefferson famously wrote of the patent system…:

“Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody.”

The pursuit of “ideas which may produce utility” was a laudable aspiration.  But Jefferson never imagined a world in which German patent reparations taken by the U.S. at the end of World War II under Operation Paperclip would be used in the Cold War in areas ranging from rockets and missiles, to industrial chemicals, to medicine, to physics and mathematics.  He never imagined “Jack” Mullin would reverse engineer and appropriate (steal) the ferromagnetic tape (invented by Danish engineer Valdemar Poulsen in 1898 and perfected by the Third Reich in the late 1920s) upon which the digital revolution would be born.  And he certainly never imagined the collusion that President Ronald Reagan would enable – under the direction of Gerald Mossinghoff – between the patent granting process and industries desperate to obtain more patents faster to counter the growing innovation “threat” from Japan.  Collusion is a strong word but let’s examine the facts.  To lubricate the fabrication of faux “invention”, Congress authorized the United States Patent and Trademark Office to levy “user fees” which the Office would retain if it reduced the pendency of patents and increased its issuance of claims of invention.  And he certainly would have been appalled by 1985 President’s Commission On Industrial Competitiveness which suggested that Cold War deterrent by patent number (as opposed to quality) would be the solution to a growing competition from Asia.

Into Reagan’s world came the ecclesiastical council of Bronwyn Hall, Adam Jaffe, and Manuel Trajtenberg working sub rosa with the National Bureau of Economic Research (NBER).  While their work was far from a secret, their bias was.  Drawing data from patents issued between 1963 to 1999, they would become to innovation econometrics what Luther and Calvin were to the Reformation.  And it’s their opening assumptions that are both false and the basis for generalized error.

They recite that: 1) patents contain detailed information about “the innovation itself”; 2) they are sought for a monopoly incentive; and, 3) citations are a proxy for acclaim or “importance”.  Referencing the 1981 NBER work of Jerry Hausman, Bronwyn Hall and Zvi Griliches (though ignoring the uncomfortable weak correlations between research and development and patenting activity that they reported), these researchers instituted an econometric doctrine of “counting” patents as an indicator of inventive or innovative effort.  From that time until the present, academicians and economists have been blinded to the numeric glaucoma of the 1950s (did the U.S. or the U.S.S.R. have more Germans?) that begot the qualitative blindness rendered complete in 1981 (can we build a database to justify our desire to “out-invent” Japan by patent numbers?). 

For a moment, consider the published work of Deepak Somaya from the University of Illinois.  In his 2012 paper in the Journal of Management entitled “Patent Strategy and Management: An Integrative Review and Research Agenda”, he describes the motivations for patenting far afield from Jefferson’s market compromise.  And while the mountain of evidence at the Court of Appeals for the Federal Circuit and the Patent Trial Appeals Board continues to grow showing that granted patents are more often than not found to be in error when challenged, neither academicians nor economists are willing to consider that the artifact of a patent does not represent “invention” or “innovation”.

“The motivations of firms in obtaining patents provide considerable insight into the potential strategic uses of patents. Among the many reasons for patenting described in prior work are blocking (defensive and offensive), preventing copying, building fences and thickets, earning licensing income, avoiding litigation by others, use in negotiation and exchange, motivating and rewarding R&D personnel, measuring performance, attracting investors, and building image and reputation (Blind, Edler, Frietsch, & Schmoch, 2006; Blind et al., 2009; Cohen et al., 2000; Cohen, Goto, Nagata, Nelson, & Walsh, 2002; Duguet & Kabla, 1998). Research has also shown that different firm-level strategic motives predict characteristics of the firm’s patents as well as reactions from rival firms to these patents (e.g., filing oppositions) (Blind et al., 2009).”

Where is the consideration of patents representing laborious inquiry, genius, and invention?  Tragically, nowhere to be found!  So much for assumptions 1 & 2 of the catechism.  Not surprisingly, the third assumption that suggests that “citation” means you’ve been celebrated for your contribution is an error of academicians who seek tenure rather than reading patent law.  In the ivory towers of academic research, citation means someone recognizes you.  In contrast, in the world of patents, citation means that you are rendered irrelevant or surpassed by the “state-of-the-art”.  Each citation removes an option by a determination of “patentable distinction”.  The more cited a patent is, the more its range of market control options are limited!   This isn’t tenure, it’s competitive market restriction!  It is worth noting that, in academic research, being cited doesn’t necessarily mean you’re being celebrated.  Good research includes the challenging of previous work.  But don’t tell citation counters that unfortunate detail.  To be found – in their univariate world – is to be celebrated.  Not true in science; definitely not the case in patents.

And herein lies the problem.  To get funded research in the field of econometrics around innovation, one seems to be compelled to turn a blind eye towards the dubious selective relevance of NBER data; the fallacious conclusions drawn from the work of researchers who themselves didn’t check their assumptions; and, rationalize data to ignore the ground truth that, since 1981, patenting has been more about the mutual assured destruction doctrine built on missile silos of expensive litigation and costs of enforcement rather than on genuine innovation.  No wonder that Apple and Samsung were fighting over who “invented” the rectangle and who controls the movement of fingers across a screen.  Ah, poor Thomas Jefferson!

Around 80 AD, the Roman poet Martial may have coined the term “plagiarius” to describe the seduction and expropriation of things.  In the 17th century, the term became more explicitly part of literary parlance.  And in 1993, IBM started developing machine intelligence to detect plagiarism in text and code.  Not surprisingly, the cunning use of thesaurus and word substitution became inextricably part and parcel of patent filers in the 1980s.  The more convoluted the term “could” be, the more interpretation might be afforded to what wasn’t actually invented.  The courts concluded that a patent applicant could be “their own lexicographer” meaning that “meaning” didn’t “mean” what it “meant”.  Against that backdrop – to say nothing of the profit motives for granting and maintaining a plethora of “strategic” patents in the US, Europe and Asia – is it any wonder that we’re awash in patents?  Let’s see: if a printer was paid to print counterfeit $20 bills, might he print many?  So too, a patent office paid to issue and receive maintenance fees for the preservation of prolific (and dubious) patents may have an incentive to, that’s right, issue patents.  Precisely what they’ve been doing for four decades.

But are we prepared to measure quality rather than quantity?  Well so far, no.  While industry left the Constitutional intent of patenting activity nearly 40 years ago by turning patents into competitive deterrents rather than celebrations of ground-breaking invention, compliant researchers found the existence of a data artifact in the form of patents to be the only thing that was countable so, guess what, they counted them.  In 2001, when I first applied machine intelligence to the question of plagiarism in patents and reported in Congressional testimony that up to 1/3 were possibly at risk of being merely the product of thesaurus linguistics, did anyone take notice?  When Commerce Secretary Donald Evans began the drumbeat of Chinese IP theft while ignoring the rampant domestic evidence of innovation expropriation among competitors and within institutions (HP v Compaq; DuPont v Monsanto; Columbia University and its transgenic mouse; etc), did anyone ask if China was merely taking to scale abuses that were alive, well, and celebrated in the U.S. and Europe?  Are any market participants aware of the looming threat of machine intelligence applied to patents?  Not really.  And why?  For the simple reason that we’re still blindly reciting a counting game while the rest of the world calls the U.S. and European bluff.  Oh, and for the record, the Chinese aren’t “inventing” much.  They’re largely building jurisdictional thickets around the hedges that G-20 countries manicured for years.

In 2013, M·CAM started running an equity fund that measured the difference between companies that come up with new ideas and companies that merely expropriate the ideas of others.  We did this to prove the consequence of measuring what others ignored.  In 2015, that effort gave rise to the creation of the CNBC IQ100 powered by M·CAM.  During its publication period, the index out-performed the S&P500 around which it was inspired.  Now, we publish three indexes – Innovation a® United States (formerly the CNBC IQ100), Innovation a® Global, and the Martin Global Innovation Equity Trade War.  These indexes are based on a very simple premise:  if one genuinely contributes to ideas that build market opportunities, it is reasonable to expect that entity to ultimately perform better than those who merely copy the work of others.  And, as long as the Cold War mentality of patent counting prevails, I suspect our performance will be rewarded.  After all, if the smartest people in the room aren’t willing to ask the tough questions on the quality of that which they count, does counting count?

Which brings me back to the charred remains of our heretic.  Tragically, Michael asked the “wrong” question.  If the sacred text says, “In the beginning,” he puzzled, “doesn’t that mean ‘beginning’”?  And if in the beginning was the Word, and then the Word was made flesh, doesn’t that imply sequence?  And if there’s sequence, doesn’t that mean that the flesh and blood came after the Origin?  Alternatively, is the text misreporting the facts?  Servetus wasn’t demanding his position.  He was just saying that you can’t hold literal infallibility of text and the doctrine of the Trinity with credibility.  Pick a story.  Stick with it.  A great surge of our innovation policy was born of the Cold War.  Numeric deterrents mattered.  I don’t mind if we, as a society, decide to redefine patents from being temporary market incentives for genuine contributions to science and the useful arts (sorry for quoting the Constitution there) to being mine-fields of deterrents to disrupt those who would challenge incumbencies.  All I care about is that we pick a story and stick with it.  When the consensus illusion stands in the way of explicit observations, I’ve got a problem.  And with the emergence of “trade wars” justified by IP theft, there’s a lot burning at stake.  (Yes, I couldn’t miss the pun.  I’d say “I’m sorry” but I’d have to be my own lexicographer because I wouldn’t really mean “sorry”.)


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Thank you for your comment. I look forward to considering this in the expanding dialogue. Dave