For the past few years, high-tech stocks have been pummeled. I felt very clever when I snapped up stock in some terrific companies at over 90% discounts. Unfortunately, that feeling passed when they kept right on dropping [1].

The tech wreck dragged down the entire world economy. Some analysts are on record saying that there won't be an economic recovery without a high-tech recovery [2].

Still, high tech accepts boom and bust cycles as inevitable. We're used to them. Most engineers just go about their jobs designing things and leave economic ponderings to the pundits. Most CEOs are focused on riding out the "recession" and keeping their jobs until the next upturn.

That's always worked, and it's a good strategy if there is a natural upturn coming. But what if we have to do something different to get the economy rebooted this time?

Larry Lessig was special master of the court, a surrogate judge, in the Microsoft case. He is a law professor at Stanford whose recent book, The Future of Ideas, is causing great controversy [3]. His book's core premise is this: "The story … is about how an environment designed to enable the new is being transformed to protect the old… ."

I'm not a Constitutional lawyer, but I do know that the body of law that governs innovation (telecom, patents, copyrights, etc.) was rewritten in the late 1990s. A quorum of America's Nobel laureates cosigned a letter to Congress warning of "lasting economic harm." They asked for an open debate before the patent laws were changed. Instead, Congress voted with no debate at all [4].

That's old history. Today, there is consensus that the telecom act of 1996 failed, and a growing chorus of voices is saying that our copyright and patent systems have broken down [5]. Others, of course, say they have not. The question gets down to this, "How are things now, and has anything fundamental changed?" If we embrace science, the way to answer that is to sample reality.

Some indications disturb me. I don't see much compelling innovation around. The Segway scooter was innovative, but is it significant? The new Macs have attractive styling, but so what? Napster was innovative, but died branded as a thief.

Chips, computers, and telecom are clearly in trouble. The shining hope for the computer industry was "convergence," where rich media and the Internet would allow all those MIPS to be used. Both are blocked by monopolies.

Rich media is forbidden by Hollywood. The new blue light DVDs offering 27 GB of recordable storage won't be available in the United States for years because of the law [6]. The local phone companies mostly block high-bandwidth access [7]. A small percentage does have broadband, but it doesn't help much. Service is poor and users of digital recorders must allow tracking of what they watch, what commercials they skip, and what files they transmit over the Internet [8]. I'll pass, thank you.

In any case, the official metrics for tracking innovation don't consider such things. Congress and the media count the huge surge in the number of patents issued and conclude that innovation is soaring [9].

I hope they're right, but the devil is in the details. Some of the new era patents are, well, odd. There's the "one click" patent, the patent on gasoline, and the patent on a swing consisting of a board and two ropes [10], [11]. Also, current law doesn't count patents from the same firm as prior art, so those with deep pockets can get many patents on similar things [12].

I'm conducting a "30-second survey" on innovation to find out how we're doing. You and your colleagues can take it anonymously over the Internet at http://www.trudelgroup.com/survey. htm. I'll report summary results on my Web page and in my free newsletter. Thank you for your help.

[1] "Never try to catch a falling knife," said my son, the lawyer.
[2] L. Conigliaro, "Backing out of the bubble," Goldman Sachs report; also see Wired, p. 78, Nov. 2001.
[3] L. Lessig, The Future of Ideas. New York: Random House, 2001.
[4] J.D. Trudel, "The patent wars," Analog, pp. 52-61, Jan. 2000. Available: http://reactor-core.org/patent-wars.html and http://www.trudelgroup.com/pwars.htm.
[5] The entire Summer 2002 issue of Forbes ASA was devoted to this issue, "A New Strategy for Igniting Inventiveness." I didn't agree with all the articles, but was glad that this is finally getting the attention it deserves.
[6] J.C. Dvorak, "Inside track," PC Magazine, vol. 21, no. 12, p. 73, 30 June 2002.
[7] J.F. Ince, "DSL's need for speed," Upside, pp. 44-49, Nov. 2001. There have been many other articles about the lack of broadband access. That issue has been high tech's top lobbying priority for some time.
[8] W. Machrome, "Extreme tech," PC Mag, vol. 21, no. 12, p. 69, 30 June 2002.
[9] Several reviewers said that the flood of patents stems not from the new law, but from reduced scrutiny and competence within the patent office as well as policies that pressure for quantity of patents. One said the examiners often have poor proficiency in English and an inadequate experience in the technology. Another claims that Ms. Fiorina, at Hewlett Packard, used this as a strategy during the Compaq proxy fight. According to this source, which must remain anonymous, she lowered the acceptable quality of patents to make HP appear to be more innovative by pointing to an increased number of filings under her tenure. Presumably other firms use similar strategies.
[10] "Gasoline joins the information age," The Wall Street Journal, 21 June 2000.
[11] S. Olson, "Method of swinging on a swing," U.S. Patent 6 368 227, April 9, 2002.
[12] 35 U.S.C. 103. Available: http://www.uspto. gov/. I'll leave it to the lawyers to debate what "similar things" means. There are limitations. For example, the "claims" do have to be different.

© 2002, John D. Trudel