In the High-Tech Patent Wars, an Inventor\'s Lament

A long, narrative article we ran last week on the challenges facing the patent system, “The Patent, Used as a Sword,” prompted a lot of comments, and we posted more than 275 of them.

But I thought it might be worthwhile to present one more - an extended commentary from one of the sources who made a cameo appearance in the piece, Stephen G. Perlman. In the article, Mr. Perlman was a counterpoint to the main focus of the piece, which was big companies using patents as tools and weapons in the smartphone patent wars. (What he says below comes from both earlier interviews, and a lengthy e-mail he sent after the article ran.)

Mr. Perlman is a successful inventor and entrepreneur. He helped design Apple's Quicktime multimedia software. Over the years, his start-up ventures have ranged from WebTV, for bringing Internet services to television (sold to Microsoft in 1997 for $425 million), to Mova, for producing extraordinarily detailed computer-generated facial imag ery like the reverse-aging of Brad Pitt's face in “The Curious Case of Benjamin Button,” which won an Academy Award.

The latest creation of his San Francisco invention factory, Rearden, is a technology called DIDO, which Mr. Perlman thinks promises a breakthrough in wireless communications - speeds of more than 100 times faster than current cell networks, without the need for cell towers.

Mr. Perlman holds about 100 granted patents with roughly the same number of applications pending. He knows what each patent does, and has never sold one. “It's a very different breed of patent,” he said, “than we're seeing with the clash of the smartphone titans, with truckloads of patents for minor sub-features being bought and sold like commodities.”

“There are patents, and then there are fundamental patents,” he added. “In my world, we deal with fundamental patents.”

The different breeds of patents, according to Mr. Perlman, reflect different k inds of innovation. Most innovation is incremental, he says. “Incrementalism is 99 percent of what corporate research and development does,” Mr. Perlman said, adding:  ”Heavens, that is not to say it isn't vitally important. Where would we be without it.”

What Mr. Perlman labels incrementalism is what others call integrated innovation. By that, they mean that increasingly complex products, like smartphones, are triumphs of melding many different technologies - each, to be sure, a smallish step rather than breakthrough.

Again, Mr. Perlman does not belittle the incremental path. Speaking of smartphones, he said, “Man, it's incredible what they've done.”

But, Mr. Perlman wrote in an e-mail: “The problem is that fundamental patents are lumped together with incremental patents. And, as the world is trying to mitigate the over-litigation of incremental patents and patent offices are buried under them, little guys like us are just being steamrolled over. And it's not accidental steamrolling.”

“Incumbents with a deep vested interest in maintaining the status quo,” he continued, “see the screwed-up patent system as a means to disrupt our ability to bring breakthroughs to market.”

That kind of big-company gamesmanship played a role, Mr. Perlman suggests, in the recent bankruptcy of one of his start-ups, OnLive. The company had developed a wireless streaming technology for delivering online games and office productivity applications to tablet computers, with photo-realistic images and high-speed performance. In a review earlier this year, David Pogue of The Times called OnLive “jaw-dropping, extremely polished technology.”

Part of the problem for OnLive, Mr. Perlman said, was that it was five years before government patent examiners looked at the application for its basic patent - and three years more before it was granted. All the while, Mr. Perlman said, OnLive could not enforce its patent or use its patent asset to help raise further funding.

In August, OnLive went through a form of bankruptcy, called assignment for the benefit of creditors, and shareholders including Mr. Perlman lost their investment and employees were laid off. The OnLive service continues to operate.