A recent dust-up over patent rights between Apple and Burst.com, Inc. has brought surprising, short-term celebrity to a fellow named Kane Kramer.
He is an Englishman who created a prototype of Apple’s phenomenally successful iPod as early as 1979.
Basically, what Kramer invented was a solid-state digital music player about the size of a cigarette pack, capable of playing about three and a half minutes of music on insertable memory chips.
His idea was to create a computer network connecting record stores by dedicated phone line to a centralized music database.
Consumers would bring their media players (called IXIs), along with a collection of memory chips (IXI chips) to these stores, and pay to have the songs of their choice uploaded onto the chips.
They could then wander around playing those songs, like a collection of “forty-fives,” from the chips their pockets.
OK, all of that can sound a little quaint and lame in these post-Napster days of iTunes and high-speed internet to the home; but, given the technological context of the early ‘80s, the idea, though a bit of a long shot, was not actually silly at all.
(If you are interested, you can find a fuller description of their plans in the sales pitch document Kramer developed in the 1980s at http://kanekramer.com/downloads/IXI-Report.pdf.)
Kramer and his partner, a fellow named James Campbell, were forward-thinking young men in their early 20s, in those days — but their problem, I think, was that, like many young people, they had more vision than sense, and they made some bad business mistakes.
Basically, they lost out because they patented their idea in the wrong way, and at the wrong time.
Just when, where, and how they secured their patents remains a little obscure; but Kane Kramer himself has said he lost the patent in the course of an “office coup” sometime in 1988.
In the course of this internal fight, he found himself lacking the 60,000 English pounds he needed to maintain what he calls his “worldwide patent” rights.
When I saw that figure of sixty thousand pounds, I went a little cross-eyed.
Sixty thousand pounds in 1988 would have been about US$102,000 — a heck of a big sum for a start-up company to be carrying for intellectual property protection, particularly in those days.
I can only assume that, for that price, they must have been using the services of some patent lawyer’s office, which was handling the American, Canadian, European and perhaps various Asian patent rights.
But why the heck would a company which had only produced of four prototypes of its end-user product — and, on top of that, a product whose value depended on a complicated service infrastructure that did not exist at all — want to spend that much money protecting its intellectual property worldwide?
Given the nature of the service they envisioned, they had to know they were at least 10 years away from being commercially viable (and, actually, it turns out to have been more like 22).
It is a truism, of course, that you get what you pay for; and they were paying for the best intellectual property protection they could get.
But it is also just plain bad business to spend money on products that you don’t need, and that do nothing for you; which is also what they were doing.
Had I been on the board of the company (as the old duffer I am now, not the hippy-dippy type I was in ‘79), I would have advised them to forgo patenting altogether, until the business was closer to actually rolling out its product.
After all, a utility patent is only good for twenty years.
Why waste half of those years — or, maybe, all of them — protecting an idea whose time is going to take a long time coming?
Had I been overruled on that advice, I would have recommended filing only one patent, probably in the USA.
The US, after all, was then, and remains today, the world’s largest single market for electronic and other leisure products, and is usually the place where such products see their first commercial light of day.
If you have the US rights secured, you have guaranteed yourself a reliable, lucrative market regardless of what happens with your intellectual property in Europe or anywhere else.
As it happened, of course they lost the patent long before their potential 20-year period was up.
But they would have lost out, anyway.
Their patent would have expired in 1999.
The iPod did not launch until 2001 — ironically, with a design inspired by some of the IXI’s features, for which Apple is not legally required to pay anything.
I suspect the IXI company could have easily gone on for another 10 years — say, to 1989 — without anyone seriously predating on their development idea.
It was not until widely available internet service arrived that any plans for a digital media player like the IXI really became commercially realistic, and worth making a grab for.
But the IXI company did its patenting way too broadly, and way too soon.
The upshot is that Kane Kramer, whose furniture design business failed just recently, apparently remains a “serial inventor” and a valued member of the British technology innovation community — but not the rich man he could have been, with a little more foresight and patience.