Rembrandts in the Attic - Kevin G. Rivette and David Kline

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Rembrandts in the Attic

by
Kevin G. Rivette
and
David Kline

general information | review summaries | our review | links | about the authors

Title:	Rembrandts in the Attic
Author:	Kevin G. Rivette and David Kline
Genre:	Law/Business
Written:	2000
Length:	206 pages
Availability:	Rembrandts in the Attic - US
	Rembrandts in the Attic - UK
	Rembrandts in the Attic - Canada

Unlocking the Hidden Values of Patents

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Our Assessment:

B : simplistic, but useful as an overview of and introduction to an overlooked but important subject

See our review for fuller assessment.

Review Summaries
Source	Rating	Date	Reviewer
Electric Business	.	1/2000	Gina Fraone
Research Tech. Management	.	3-4/2000	.
Sloan Management Rev.	.	Winter/2000	Judith Maas
Technology Review	.	3-4/2000	Wade Roush

  Review Consensus:

  Reviews are descriptive rather than critical.

  From the Reviews:

"Rembrandts serves as a simple but useful primer for the CEO who knows that it's time to make patenting a significant part of the company's strategy, but isn't quite sure how or where to begin. The book nicely outlines how executives can start implementing an intellectual property strategy, how to grow it and what pitfalls to avoid." - Gina Fraone, Electronic Business

"This is a book about maximizing profits, not about morals, and on that level it is a success. But inadvertently, it also opens a window on a disturbing world, one where ideas can be bought and sold like chattel and executives would rather sue each other for patent infringement than think an original thought." - Wade Roush, Technology Review

Please note that these ratings solely represent the complete review's biased interpretation and subjective opinion of the actual reviews and do not claim to accurately reflect or represent the views of the reviewers. Similarly the illustrative quotes chosen here are merely those the complete review subjectively believes represent the tenor and judgment of the review as a whole. We acknowledge (and remind and warn you) that they may, in fact, be entirely unrepresentative of the actual reviews by any other measure.

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The complete review's Review:

       "This book is about intellectual property (IP), once considered the most boring subject in the world", Kevin Rivette and David Kline begin their book. Patents themselves remain a relatively boring and dry area (read one and see for yourself), but in protecting intellectual property and in giving patent-holders the exclusive right to determine what to do with it they can be of great value -- and value can make almost anything, even patents, appear sexy. There's actually nothing new to this -- patents have been used to build huge businesses for well over a century now. Master-patenter Thomas Edison was one of the first to use the system systematically and extensively, and others have followed in his footsteps.
       Nevertheless, many companies have not used the inherent wealth-producing potential of patents effectively. With the rise of the Internet and the associated industries around it patents have become a hot issue again -- especially since not only "inventions" but also specific business methods and approaches can be (and have been) patented.
       The subtitle of the book speaks of Unlocking the Hidden Value of Patents. In fact, much of the value is not so much hidden as simply ignored or forgotten. Rivette and Kline give many amusing (and sad) examples of companies that fail to take advantage of the intellectual property they own, whether by utilizing the patents themselves or though licensing. The wake-up call seems a desperately needed one: intellectual property is an asset, and can often be a valuable one, and companies must have a mechanism in place for properly utilizing it.
       Rembrandts in the Attic primarily seeks to force the reader into recognizing patents to be assets (and to be treated as such), but it also suggests a larger patent strategy for companies. The authors address various relevant concerns and considerations, and make for a convincing case for a management-managed (as opposed to lawyer-led) patent strategy for corporations.
       Obviously, such intellectual property issues are not directly relevant to all companies and industries, much less to individuals, but in fact they should be of interest to almost all readers for two reasons. First, as the authors point out, patents do represent value and can (and increasingly will) be taken into account in the valuation of companies; any investor (at least any in it for the longer term) must consider a company's patent portfolio and strategy in an overall valuation of the company. As the authors suggest, the market seems to be starting to take these factors properly into account, but such concerns are by no means universal yet.
       A second significant point is that almost all companies may be vulnerable to patent infringement suits under the contributory and inducement to infringe provisions of the law, especially in this Internet age. An example the authors use is Amazon.com's associate program (which the complete review is affiliated with), where they suggest that Amazon.com's hundreds of thousands of associates might possibly be sued for a patent infringement regarding that business method if Amazon.com itself is sued. As it turns out, it is in fact Amazon.com that nabbed the patent on the associates idea (patent 6,029,141, issued February 22, 2000, after the book itself was published) -- but the issue remains the same. Amazon.com's associates seem safe -- but what of all those affiliated with other companies, including Amazon.com rival Barnes & Noble ?
       The authors actually condemn Amazon.com's patent strategy (prematurely), finding only three patents by the time the book went to press and suggesting that:

Amazon's commercial fortunes would have been far better served had it patented technologies truly strategic to its business, such as the one-click ordering system that the company pioneered and that is used widely by on-line retailers today.

       Amazon.com was, however, well aware of the potential value of this process and did patent it (patent 5,960,411, issued September 28, 1999) -- and immediately flexed its patent empowered muscle by forcing Barnes & Noble, among others, to switch from the one-click method.
       One of the questions raised in the book is whether patents are a good or bad thing: do they stifle innovation ? The authors give a ringing endorsement of the system (though admitting aspects of it could be improved). Certainly, the success of the system speaks for itself. However, the Internet age brings with it some new questions. While similar fast-paced struggles with loads of innovations being patented have taken place before (including, for example, around telegraphy a century ago), the question remains whether the Internet age is best served by current intellectual property law.
       One of the problems, not fully addressed, is that technological change now moves at an even greater speed -- and that patents (or more specifically, the US Patent and Trademark Office) can't keep up. Obscenely, Amazon.com's "Internet-based customer referral system" (its Associates program) patent was filed June 27, 1997 but not granted until February 22, 2000. Other companies which independently came up with such a system, or which assumed it was not a legally protected business method, are put in a difficult position by this lengthy delay. In a sense they are not given timely warning that they may be infringing on proprietary rights until it is too late.
       Similarly, there is the question of the duration of patents, especially in the Internet area, with even Amazon.com suggesting that shorter durations might be a good idea.
       To a certain extent, Rivette and Kline prod towards one of the solutions that counters the stifling effect of patents on innovation: using the patents, whereby companies either use them themselves in an organized and systematic way that enhances the value of the patents and leads to greater innovation, or license them, i.e. allow others to make the best of them (and earn easy money along the way). Cases of patents going unused and forgotten -- either because companies are unable to utilize them for want of cash or a proper strategy, or because companies simply file the patents away somewhere -- abound. The authors site some, and there are many others (most famously, perhaps, including the earliest television technology).
       Of interest is also the lackadaisical manner in which some companies protect their intellectual property. While copyright infringers are ruthlessly hunted down by big companies, patents are often used by others without proper compensation. The authors site a number of examples of the money to be made if patent infringement is strategically addressed. They also, however, acknowledge that some patents can and should be pared out -- sold or even given away if they don't fit within specific corporate goals.
       The main -- and valid -- point of the book is that there is money to be made with patents, and that a coherent strategy regarding patents is essential for practically any firm whose business is in any way affected by them. The authors get a lot of mileage out of Xerox' marvelous innovations -- notably the GUI (graphical user interface, used by both Apple and now Windows) -- which the company failed to patent, huge amounts of money the company basically gave away. (It should be noted that Xerox has, nevertheless, done okay as a company).
       Addressed at managers, Rembrandts in the Attic is a useful eye-opener, and a decent basic guide to the importance of a corporate strategy regarding patents. The possible benefits are covered (lots of dollar signs are waved about), and some of the dangers that must be watched out for addressed. Larger patent issues are addressed (including the question raised by the Open Source Initiative), but not in any great depth. Certainly, the authors are correct in calling for patent strategy to be decided on a management level (and not left to the lawyers).
       The book does what it sets out to do fairly well. The writing and the many examples are entertaining, and as an introductory book regarding corporate patent issues it is solid enough.

       Note that many of the approaches and models on offer here are those developed by Aurigin Systems -- of which Kevin Rivette is co-founder and chairman. Most of the graphs and charts are also "Courtesy of Aurigin Systems". This company "develops intellectual property management solutions" (which is what the book is about), and Rembrandts in the Attic is obviously, in part, a sales pitch for their specific approaches. Nothing wrong with that -- but readers should be aware of it.

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Links:

Rembrandts in the Attic:

HBS Press publicity page
Interview

Reviews:

Consulting to Management

The patent issues:

Interview with Rivette
Salon article re. Amazon.com's One-click patent
Salon article re. Amazon.com's patent on its Associates program (includes quotes by Rivette)
Amazon.com's One-Click patent
Amazon.com's Associates program patent
US Patent and Trademark Office site. Check out old patents ! Submit your own !

Aurigin Systems Inc. (now: MicroPatent):

Aurigin site

Rembrandt:

Good general Rembrandt site, with many pictures

Other books of interest under review:

James Boyle's book on patent and copyright issues, Shamans, Software, and Spleens

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About the Authors:

Kevin G. Rivette is a former patent attorney and currently chairman of Aurigin Systems Inc., a company that develops intellectual property management software systems.

David Kline is co-author of Road Warriors and writes on e-commerce related subjects.

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