Friday, October 31, 2008

What the Bilski decision means for software patents

I am not a lawyer. I think that needs repeating, I m not a lawyer. :-) So, please get an opinion from a true IP attorney.

I have been doing a bit of digging around the last couple of days to try to understand what this decision means. I can't possibly do as good a job as the Patent Law Blog, so go here and read the whole thing:

I'll summarize what I think is the most important point:

"the court made clear that business methods and Software will still be patentable – if they meet the machine-or-transformation test."
As long as the software is tied to a specific thing, such as software to control a fuel injection system on an automobile. But, you have to remember this:
"A general purpose computer is not a particular machine, and thus innovative software processes are unpatentable if they are tied only to a general purpose computer."
However, you also have the transformation test. So, what is "transformation"?
"transformed articles must be physical objects or substances [or] representative of physical objects or substances."
And, then there's this:
"a claimed process where every step may be performed entirely in the human mind. In that situation, the machine-or-transformation test would lead to unpatentability"
In my personal view, it would appear that there are still many potentially patentable software innovations. But, patenting pure algorithms is out. Sorry, your new method for improving the bubble-sort probably won't fly.

What do you think? Please add your thoughts in the comments.


Wednesday, October 29, 2008

Happy Birthday, Tech Square!


Technology Square at Georgia Tech opened five years ago this month. (The photo above shows former GT President Wayne Clough speaking at the opening celebration, with Mayor Shirley Franklin waiting her turn to his right.)

In five years, Tech Square has transformed Midtown, vastly improved Georgia Tech's physical and social connectivity to the rest of Atlanta, and become the hub of high-tech commercialization and startup activity for the region.

Off the top of my head (I'm sure I've forgotten some neighbors; my apologies), it's now the home for:

Georgia Tech

  • College of Management
  • Global Learning Center
  • Bookstore (Barnes & Noble)
  • Enterprise Innovation Institute
  • Advanced Technology Development Center (ATDC), incubating around 30 startup companies
  • VentureLab
  • Georgia Electronic Design Center (GEDC)
  • Graphics Visualization and Usability Center (GVU)
  • Georgia Centers for Advanced Telecommunications Technology (GCATT)
  • Georgia Tech Foundation

  • Georgia Department of Economic Development
  • Technology Association of Georgia
  • Atlanta Technology Angels
  • three venture capital firms
  • every semiconductor company in Georgia (all five of them!)
  • TechDrawl (ssh!)
  • Accenture
  • Georgia Power
  • Interface
  • Carbon Motors
  • LifeSync
  • GSE Simulations
  • Samsung
  • Siemens
  • Georgia Tech Hotel
  • a dozen shops and restaurants, including
  • the all-important Starbucks!

Not bad for a few blocks that used to be dangerous, dirty, and under-developed.

Congratulations to the Georgia Tech Foundation, The University Financing Foundation, Fifth Street Management, and everyone else who helped make Tech Square a success!


Monday, October 13, 2008

Now is the time to invest in R&D

In the early 1930's, there was another financial crisis you might have heard about. In the midst of that, Thomas Watson of IBM made the decision to invest $1M to build a stand-alone research facility in Endicott, New York. That was a significant amount of money back then, in fact, it was 6% of IBM's revenues. There is no doubt it was a brilliant move. A great lesson for today?


Monday, October 6, 2008

Teaching Cats to Swim

So I was at the NCET2 University Startups Conference in Washington last week, and one of the hot topics was the role of faculty members in university spinout companies.

I have strong feelings about this, which I've documented here. But since not all the readers of this blog will have suffered through one of my presentations, I figured it was worth writing about.

Jack Biddle (co-founder of Novak Biddle, a top-notch VC firm in northern Virginia) started the controversy by saying that his goal was to pull faculty members out of the university... and that smart universities (he explicitly mentioned Stanford) will have liberal leave-of-absence policies to encourage just that. He minimized the value of licensing the university's intellectual property... "If we have the people, we don't need a license. And the license isn't worth anything without the people."

Niloo Howe from Paladin Capital responded by saying that they typically don't want the people... they just want the technology. "Companies led by professors focus on science experiments, and we don't fund science experiments.)

My take? They're both right, and they're both wrong.

As I've said so many times over the last few years: Teaching faculty members to be entrepreneurial is like teaching cats to swim.


  • It can be done.
  • You will lose blood.
  • You’ll never be satisfied with the results.
  • You will annoy the cat.

At Georgia Tech's VentureLab, in most cases, we try to discourage faculty members from becoming CEO of their startups. CEOs require a particular mindset, a particular focus... and, usually, a particular set of experiences and scar tissue that most faculty members don't have.

(There are exceptions to every rule, including this one.)

Faculty members make great Chief Scientists, or Chief Technology Officers, and even board members. (And Georgia Tech faculty can spend significant time on such tasks without taking a leave of absence.) As the originators of the technology underpinning a startup, they deserve significant founders' equity. But once you've made tenure at a university like Georgia Tech, you have developed a certain skill set that frequently doesn't transfer to an entrepreneurial startup. (As Cali Tran of North Bridge Venture Partners pointed out, faculty members frequently manage laboratories with dozens of employees and million-dollar budgets... but "laboratories don't scale. Companies have to.")

At Georgia Tech, we actively recruit VentureLab Fellows... experienced entrepreneurs who use their market knowledge to evaluate innovations and build new companies. Typically, a VentureLab Fellow has already built one or more startup companies, so they have a deep understanding of the non-technical issues involved... recruiting, fundraising, dealmaking, etcetera.

This model works. The professor focuses on continually pushing the edge of the technology. The entrepreneur focuses on building the business. A few graduate students may be attracted from the laboratory to the startup, and that's not a bad thing (as long as academic conflicts of interest are avoided). And investors put their money into a proven entrepreneur who is building a professional management team, not an academic who may be distracted by science experiments.

We've done this a dozen times or more at VentureLab. Investors have endorsed our approach with over a quarter billion dollars in private equity investment. We plan to keep it up.