Myhrvold Talks Innovation Past and Present

Nathan Myhrvold, former chief technology officer of Microsoft, commissioned the Difference Engine No. 2 that is set to debut at the Computer History Museum in Mountain View, California, on Saturday. It's the second such engine built from plans left by Charles Babbage, a 19th-century mathematician who was never able to build one. Myhrvold now leads Intellectual Ventures, a Bellevue, Washington, company, which he says fosters "invention capital" to help inventors get their products into the real world, but critics say it's a "patent troll," buying up patents so it can later sue companies that use them.

IDG News Service talked to Myhrvold about both Babbage and intellectual property at a press preview of the Babbage device last week.

IDGNS: What would be comparable to the Difference Engine today?

Myhrvold: If we go back to Babbage's day, the idea of doing large numerical calculation was something that just wasn't done. The idea that you had to mechanize it and automate it faster and faster, is just something that didn't exist in that era. So he had this crazy idea that you could do it. [He] spent a huge chunk of his life figuring out how to do it, developing many of the key ideas that later would be in the electronic computing age. ... the idea of programmability, he figured out. It was also, of course, a little bit too hard, so he never got it to actually work during his lifetime.

If you wanted to find a project like that today, you'd have to find a project that had a grand vision for something that people might not quite get. I think this one will succeed ... but Craig Venter has a project to make artificial life for useful purposes. Perhaps another grand vision that one might compare to this are the various folks interested in colonizing space.

IDGNS: I've heard you describe Intellectual Ventures as a new business model ... and apparently a lot of people don't get what you're trying to do. Is that comparable?

Myhrvold: Ha ha! Hoist on my own petard! Well, I don't think our idea is quite as grand as his. We have individual inventions that might be that grand. ... You're right, we have a crazy business model idea, which some people don't get and some people think is impossible, and other people think is great, and we are running the experiment to find out. And I sincerely hope that I know the answer to the experiment in my lifetime, and I'm pretty sure I will.

IDGNS: Can you give me an example of some of the ideas that you're working on?

Myhrvold: Well, we invent in a lot of areas. The computing industry, but also medical devices, solid-state physics. One area that we're really big on is something called metamaterials. Metamaterials, perhaps, is like a Babbage idea. Using nanotech techniques, you could engineer a material that has electromagnetic properties, or other properties, that's whatever you want. The most ambitious aspect will be a programmable material, but ... a lot of the work in metamaterials is focused on optical things. [For example] something with a negative index of refraction.

There's some amazing things you can do. You can make what's called a perfect lens, which is a lens that focuses light even below the diffraction limit. That's a nearly magical thing if you want to make tiny chip features. It's certainly not pragmatic as a kind of optics. Yet. But hopefully, at some point in the next 10 years, it will be.

IDGNS: Do we have a patent litigation crisis?

Myhrvold: If I compare the number of lawsuits to the number of patents that exist, it's down. If I compare it to the number of patent holders, it's down. Patent litigation has grown, but it's actually grown less fast than lots of other things have grown. Patent litigation is actually flat or down in most Silicon Valley-oriented things.

Lots of technology companies that are gigantic today weren't gigantic five or 10 years ago. They were little startups that grew like weeds. Or they were a company that acquired little startups. Many of these companies took whatever it took to become successful. Along the way, they probably copied lots of other people's ideas. And the reason they complain about patent litigation and claim that there's a problem is, they know they stole lots of stuff. And they're afraid someone's going to ask them for the money, and they'd prefer not to pay.

So there's a process that's been going on in Washington, D.C., over the past couple of years called patent reform. There is a lobbying group called the Coalition for Patent Fairness, which is a bunch of big companies that hate the idea of strong patents. Many of them openly say they would like to eliminate patents, but they can't quite lobby for that in Washington, D.C., so they said, "Let's weaken it." And it's very hard to come and say, "Look, I've become a billionaire personally, and my company has got a $100 million market capitalization, and we did this by copying lots of ideas from universities and small companies we never paid. But we'd like a free pass." So instead, you say, "Oh my God, there's this catastrophe, patent litigation is threatening to stop all innovation." What evidence is there of it? There's none.

IDGNS: Do you think that it is OK for a company to simply own a bunch of patents and not make anything?

Myhrvold: I would say, yes, there's nothing wrong with that. And the analogy I would use is, it'd be like saying, "Is it OK for someone to buy a chunk of the business and never show up there?" And the answer is, yes. We call them venture capitalists or shareholders. To have a system of taking risk and building valuable companies, you have to have people that are financiers or have other specialized roles.

The reason we think that invention capital is so important is that there are not sources of capital for people that just invent. There are sources of capital for people that will build a company ... but not for people that just have an idea.

By professionalizing the venture capital industry, creating a real industry, where there are tons of people whose job is not to do any direct technical work but to finance others, we have created tens of thousands of companies that wouldn't have existed. Many of which failed, but who cares? The successes totally changed the world.

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