It’s an idea people love the instant they hear it: movies stars have their Walk of Fame out in Hollywood, so entrepreneurs should have one, too—and what better place than right here in Kendall Square, the most fertile, concentrated ground for entrepreneurship in the world?

Last August, Xconomy was first to report on the idea for an Entrepreneurial Walk of Fame—the brainchild of Xconomist Bill Aulet, managing director of the MIT Entrepreneurship Center. Now, almost a year later, I am pleased to report, the Walk has moved beyond the talking stage, it is walking the walk, so to speak. The idea has advanced in the Cambridge, MA, City Council, attracted at least one founding sponsor, nomination and selection committees have been formed—yours truly is an official curator, charged with nominating candidates for the Walk—and a launch date of September 16 has been targeted.

“The time has definitely come,” says Aulet. “The idea just resonates. Getting from idea to execution is always a challenge, but the idea has been so good that people have been lining up at all levels.” He says the first entrepreneurs selected would be given tiles in the plaza outside the Cambridge Marriott hotel, in the heart of Kendall Square.

There are still several moving parts to this, details being worked out (dare I say, nothing has been set in stone?)—including the definition of what, exactly, qualifies someone for the Walk, and how many inductees will be named this first year. But here are the key elements that appear to have been decided on so far:

—Each entrepreneur would get a tile, emblazoned with their name and a star. Aulet was vague about how big the tiles would be, whether the tiles would include a picture of inductees and what else would be listed—such as their company name, year it was founded, etc. One idea being considered, though, is that a QR code would be embedded in each tile, so that anyone with a smartphone camera and a reader app might be able to take a picture and have it open a web page with, say, the bio of the entrepreneur, videos of them in action, and other features. The design firm IDEO is working on the tile design now.

—The number of first-year inductees has not been set. But it could be as few as five.

—Aulet says 25 or so people have been named as curators, charged with nominating candidates for the Walk. I don’t have all their names, but here are some from the Boston area: Paul Maeder, general partner and co-founder at Highland Capital Partners; Joi Ito, the newly named director of the MIT Media Lab; Leon Sandler, executive director of the MIT Deshpande Center for Technological Innovation at MIT; John Harthorne, co-founder and CEO of MassChallenge, and Howard Anderson, founder of the Yankee Group.

—The selection committee, which will make final decisions about those who have been nominated, to date consists of seven people: Aulet; Desh Deshpande, founder of Sycamore Networks and chairman of A123Systems; Forester Research founder and CEO George Colony; Yankee Group chairman and former CEO Emily Green; Carl Schramm, CEO of the Kauffman Foundation; … Next Page »

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Intellectual Ventures, the Bellevue, WA-based patent firm started by former Microsoft CTO Nathan Myhrvold, is announcing a new two-way intellectual property deal with Boise, ID-based semiconductor maker Micron Technology (NASDAQ:MU).
Like many licensing deals we see from Intellectual Ventures, this one gives Micron access to IV’s portfolio of “more than 30,000″ patents. The second element of the deal is an ongoing arrangement for the firms to buy patents from each other.
In a joint release, the companies said their deal “helps Micron protect its core business so it can focus on innovation.” Financial terms were not disclosed.

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A chat with the nation’s first chief technology officer was one of the highlights of the past week in tech news. Aneesh Chopra, President Barack Obama’s CTO, is in town this week for a panel discussion at the Technology Alliance’s State of Technology luncheon. He had lunch with local corporate execs yesterday, and we published this interview that touched on just a couple of the administration’s main topics: Why innovation is primed to take off in healthcare, and how the new Startup America Partnership can help the private sector develop strong infrastructure for new companies.

Elsewhere in Seattle-area tech news from the past week or so:

—I profiled startup Pinpoint Pickup, a towncar-booking app that has bootstrapped its way to services in seven cities. This all comes as competitors like San Francisco-based Uber get tons of press and millions in investment, all without anything near the scope of expansion that Pinpoint has achieved.

—Xconomy’s Greg Huang checked in with Charles River Ventures about the firm’s stake in Intellectual Ventures, the intellectual property machine founded by former Microsoft CTO Nathan Myhrvold. Charles River Ventures has put a whopping $300 million into Intellectual Ventures. Partner Izhar Armony says more investors would get into the developing market if they weren’t convinced that IP is “a dirty world controlled by lawyers.”

—Like just about everybody in the local startup scene, I swung by the Seattle 2.0 Awards. It was an interesting mix of celebration and navel-gazing (the good kind), punctuated by an energetic keynote speech from California VC Mark Suster—lots of F-bombs, a Public Enemy reference, and even a bit of aggressive crowd control. Also featured: Rampaging mascots.

—There were a couple of acquisitions to report, both on the same day. BuzzLabs, a member of Seattle’s burgeoning social media cluster, was snapped up by CityGrid Media, a unit of Barry Diller-headed IAC. BuzzLabs works on social media monitoring, helping other companies sort through the tons of things people are saying about them online. The other deal involved Seattle’s Smashing Ideas, a 15-year-old digital media and marketing company. It was acquired by Random House, the publishing unit of Bertlesmann AG. Terms were not disclosed for either deal.

—Finally, two bits of Xconomy news. We have a recharged Facebook page, to which we’re adding photos, stories, and all the other goodies you’d expect—with more to come. And it comes with a promise: No spam. We’re selecting three of our best stories throughout the day to push through Facebook, so we won’t clog up your feed with every last tidbit. We’ve also added more horsepower to our upcoming event, “Separating Hype from Reality in Alternative Fuels.” Kelly Ogilvie from Blue Marble Energy joins folks from Harvest Power, General Biodiesel and more as we sort through the opportunities for this industry in the years ahead.

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Quick, which Boston- and San Francisco-area venture firm has invested hundreds of millions of dollars into the burgeoning—and controversial—market of intellectual property and patent protection over the past five years?

If you said Charles River Ventures, you are correct. In fact, CRV is the only big venture investor behind Intellectual Ventures, the Bellevue, WA-based firm known for its unique (and often criticized) approach to the business of invention. Charles River says that, together with its limited partners, it has poured some $300 million into the company since 2006.

That’s an astounding figure, and it shows that Charles River is betting on intellectual property in a huge way—perhaps more so than anything else in its portfolio. Besides Intellectual Ventures, the VC firm is also invested in RPX, a San Francisco-based defensive patent aggregation firm, which filed for an IPO in January and plans to go public today—more on that coming in a separate story. (Kleiner Perkins Caufield & Byers and Index Ventures are also investors in RPX, which was co-founded by two former employees of Intellectual Ventures.) Yet most venture firms still treat the field of intellectual property as a bit of a scourge—or, at best, a fringe area—even though it has great ramifications for VCs and their startups. So why did CRV decide to take the plunge?

The story goes back to 2001, the year after Intellectual Ventures was formed, when Nathan Myhrvold, the company’s polymath, founder, and CEO (and Microsoft’s former chief technology officer), came to Boston and met with Izhar Armony, a partner at Charles River Ventures. After some intensive Myhrvold-speak—for example, “invention is the essence of innovation”—he drilled down to his main point. Venture firms, Myhrvold argued, spend almost all their money on things that are essentially commodities—engineers, business people, infrastructure for startups—but what’s actually unique, and arguably most valuable, is invention.

Many would disagree—people and execution are pretty essential to businesses, after all—but the seed was planted. “Nathan helped open my eyes to the notion that IP [intellectual property] is a very important market—it’s actually a very big market in tech,” Armony says. He adds that there’s a $50 billion-plus market in IP rights and licensing, versus a $6 billion litigation market based on legal fees.

So in 2003 he led CRV’s investment in Intellectual Ventures’ “invention science fund,” which aimed to create new inventions across a wide range of fields, in part by bringing together renowned scientists and inventors and brainstorming ideas in a structured way. Such “invention sessions” have led to major projects and spinouts such as TerraPower, the Bellevue, WA-based nuclear-reactor firm (in which CRV also became an investor). In total, CRV committed $39 million to the invention science fund, co-investing with the likes of Bill Gates and Microsoft.

But the really big business opportunity came along in 2006, when CRV and its limited partners decided to commit an additional $300 million—I’ll say it again, $300 million—to Intellectual Ventures’ … Next Page »

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[Updated at 9:35 a.m. with a correction, see Page 2.]Don Merino used to be the guy sitting across the table when someone went to Intel looking to sell a patent—sometimes he dealt with inventors, but a lot of times it was patent lawyers. Merino liked to say the job was about dealing with “random $40 million events.” It was hard to know when, but eventually, a company would find itself in a must-have position for intellectual property.

So when Merino joined longtime colleague Peter Detkin at Nathan Myhrvold’s Intellectual Ventures, the Bellevue, WA-based patent licensing company and invention incubator, Merino had a pretty good idea of the inefficiencies in the patent market. And that’s what he and Intellectual Ventures have set out to get rid of.

Not everyone is a fan of that work. There’s been plenty of ink spilled over whether Myhrvold’s firm is simply a “patent troll” on steroids, seeking mostly to profit from the ownership of ideas that it isn’t actually using. Myhrvold himself offered a defense of the company’s vision for a new “invention capital” industry last year in Harvard Business Review, keying on the idea that his work could lead to a better way of financing inventions. The company also sees itself as cutting down the cost of dealing with intellectual property conflicts for businesses.

Wherever you fall on that discussion, I’d say Merino’s stories are a pretty fascinating instant business history. It really is kind of mind-boggling that in the 21st century, with everything good and bad that modern finance has been able to conjure up, there was an unquestionably valuable asset being traded in a market that was still relatively wild, highly illiquid, and unpredictable.

As one of the key people helping Intellectual Ventures build up its massive trove of patents, Merino has been on the front lines of its mission to create a new kind of market for intellectual property. Merino is now the company’s senior vice president of licensing, spending a lot of time in Asia. When he started in early 2004, the company had been around for a few years, but had only recently corralled enough capital to bankroll large-scale patent acquisitions.

Don Merino

“The question was, were we going to be able to get to critical mass? When I showed up there was $150 million committed to the fund, and I remember Nathan one time grabbing me and saying, ‘You know, Don, it’d be so great if we could buy 3,000 patents over the next couple of years and spend the $150 million we have.’

“About a year later I came back and said OK, I spent the $150 million, Nathan. Now what?” Merino says with a big laugh. “So we went from $150 million to $1.5 billion in the first fund, between basically 2004 to 2008. It was a bit of a rocket ride, needless to say. We did about 1,200 deals in the first fund, and I personally did about half of them. “

Merino sees some comparison in the problem of dealing real estate in the frontier days of the American West. It was hard to know who owned what, where the boundaries were, and how valuable the land was. In modern times, land boundaries and values have all been sorted out and there are plenty of people to assess and document the history of those assets, everywhere from the local county courthouse to Zillow.com. But there is nowhere near that much transparency for patents—or at least, there wasn’t.

“One of the very simple things that we ended up having to do in the buying was understand if the person selling the IP to us actually owned it or not. There’s no title companies in IP. And IP lawyers … Next Page »

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In the 15th century, British noblemen decided that they needed brighter colors for their coats of arms to help their armies more easily distinguish them on muddy battlefields. They naturally approached suppliers in their own nation. But when British tradesmen refused to accept this innovative approach to their traditional ways, the noblemen turned to Germany, where tradesmen were more than willing. This in turn helped spawn the German chemical industry, then the German petrochemical industry, then the German pharmaceutical industry. The British were left on the competitive sidelines.

Five centuries later, Otis Elevator, which had dominated its business until the 1970s, found itself in a war with GE, Westinghouse, Hitachi, and Fujitsu. The challenge was how to respond. After all, weren’t elevators just motors and bent metal? Then a member of Otis’s internal IT department made a breakthrough: Otis developed software that could automatically configure elevators and gave it to architects so that they could conform to local building codes, thus gaining market share for Otis. By putting computer chips in elevators, Otis could also send repair crews before systems broke down. Since the real money in elevators is maintenance, those who win the installation battle end up with a cash flow that will continue for as long as the building is standing.

Though separated by a half millennium, these examples show how innovation has always driven new technology, which drives new companies, which create economic growth and jobs. But innovation does not just happen. It requires far more than just inventors: it needs the entire organization. The messianic belief held by many organizations that they can lead in innovation by increasing research and development spending is simply not true. Apple, for example, trails its industry in R&D spending, yet it leads in innovation. And large companies that brag about their research departments by day often end up having to make large acquisitions because their own R&D departments continue to fail them.

America cannot maintain its dominance in some sectors and regain it in others without innovation, the importance of which has been hailed by everyone from the President to the local manager. But innovation does not occur automatically. To produce workers, managers, investors, and others who recognize and reward innovation requires making innovation a state of mind. Innovation should be taught, beginning in kindergarten. Properly run business schools combine … Next Page »

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Most readers will be aware that Vertex announced it is moving from 900,000 square feet of laboratories and offices in Cambridge to over a million square feet in Boston.

Some are asking if this spells serious trouble in Cambridge. This question surprises me. Cambridge is one of the world’s most important sources of next-generation technology and companies, and regularly exports them. A 2009 Kaufmann Foundation study showed that MIT spin-outs alone, if collected together, would rank as the 11th largest economy in the world. Vertex and its Telaprevir hepatitis C drug, which is on the verge of approval by the FDA, follow a time-honored tradition.

Once ideas are proven, those pursuing them should and do move into production mode. Sometimes that means taking larger, cheaper space elsewhere. When this happens, it makes room for another generation of new companies in Cambridge. While nobody wants to lose a taxpayer, Cambridge should feel proud of the contributions it makes to the rest of the world.

For nearly 400 years, Cambridge’s powerful blend of intellectual and entrepreneurial oomph has given the city an enviable self-renewing quality. Let’s look at the record. It starts with the book. Cambridge printed the first book in North America 370 years ago. About that time, it also became home to its first university, Harvard. The first computer (the Mark II) and the Internet (then called the Arpanet) came out of Cambridge. Thomas Watson placed the first two-way telephone call from his lab in Kendall Square, the wires stretching across the river to Alexander Graham Bell’s home on Beacon Hill. Some other Cambridge creations include the microwave oven, the sewing machine, instant photography, ship-to-ship radar, synthesis of penicillin and quinine, fractionation of blood, and deployment of vaccines. Many of Cambridge’s inventions today are so complex, the inventors win Nobel Prizes while most of us don’t even understand them.

(If you want the full background on these inventions and others, you are in luck. The Cambridge Historical Society is readying a comprehensive website on the history of invention in Cambridge. Send a note to innovation@cambridgehistory.org if you’d like to be notified when it’s up.)

Cambridge has launched some pretty interesting ideas in other departments as well. … Next Page »

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Local legends Matt Damon and Ben Affleck rose from the bowels of Cambridge Rindge and Latin School (the high school’s drama department really is in the basement) to become international movie stars—and Damon was chosen three years ago to get a star along the famous Hollywood Walk of Fame. But the business leaders who have arisen from places like Harvard University and especially MIT, creating jobs and changing the world in areas from health to education, energy and the environment, office productivity, and home entertainment, are ultimately far more heroic than movie stars. So why not create an Entrepreneurial Walk of Fame right here in the world’s densest innovation zone, Kendall Square?

That’s the inspired idea from Xconomist Bill Aulet, managing director of the MIT Entrepreneurship Center. Aulet’s concept is now being championed by Cambridge City Councilor Leland Cheung (who’s also expected to graduate in 2012 with a dual MBA/MPA degree from MIT’s Sloan School of Management and Harvard’s Kennedy School of Government), who says it’s being considered in committee and that he hopes to bring the proposal to the full Council this fall.

Aulet likes a good celebration (he and I and a contingent of other touring basketball players once paraded through the streets of Donegal Town in Ireland, but that’s another story). The idea behind the Entrepreneurial Walk of Fame, he says, “comes from my belief that successful entrepreneurship is about spirit as much as it is about skills…Our model is Educate-Nurture-Network-Celebrate. The stars on the sidewalk falls right in line with the ‘Celebrate,’ which we should do more of. If you want to keep a culture of risk-taking and entrepreneurship, then we should treat our entrepreneurs as stars, and what better way than this?” Aulet cites two pieces he wrote for Xconomy that explain more of his thinking along these lines: Celebrate Entrepreneurs Like the Red Wings Winning the Stanley Cup, and How to Build a Successful Innovation Ecosystem: Educate, Network, and Celebrate.

For his part, Cheung says that “every community should take the time to celebrate what makes it great. In Hollywood it’s actors; in Cambridge it’s entrepreneurs. That Kendall Square is the most innovative square mile on the planet is something everyone who lives or works in Cambridge can be proud of. Innovations born in Cambridge have changed the world countless times; I’d like to memorialize a few of those to help inspire everyone who might walk by them.”

Cheung says he sees the courtyard around the Marriott Hotel and the Kendall Square T Station as the perfect place to put the first stars, which would celebrate the entrepreneurs, researchers, and visionaries behind “the great innovations or achievements that have started or taken place in Cambridge.” The squares containing the stars would include the name of the entrepreneur or innovator, the core contribution he or she made, and possibly other details such as the date of the innovation and even its outcome. “Handprints would be great as well,” he says.

I love this idea—and I don’t see any reason it couldn’t be adapted in any of Xconomy’s cities of Seattle, San Francisco, San Diego, and Detroit, or any other tech cluster around the world. Imagine going to Tokyo or Singapore or Basel or Cambridge, England, and finding tributes to innovators you might never have heard of, but who changed your life or cured your disease. Since learning of the Kendall Square idea last week, I’ve been thinking about the top entrepreneurs and innovators to come out of Cambridge over the last century or so, trying to identify the best 25 to 30 to start things off. Here are some names I came up with, in order of their appearance in my mind. But I’d love to hear your thoughts about this list, or who I missed—just drop them in the comments section below.

Edwin Land — prolific inventor and Polaroid co-founder

Harold “Doc” Edgerton — inventor of the strobe and co-founder of EG&G (originally known as Edgerton, Germeshausen, and Grier)

Phil Sharp — Nobel Laureate biologist at MIT and co-founder of Biogen (and several other biotech companies)

Wally Gilbert — Harvard Nobel Laureate and co-founder of Biogen; also a venture capitalist

Bob Langer — prolific MIT inventor and founder of more than a dozen companies

Rod Brooks — longtime MIT professor and robotics visionary, co-founder of iRobot

Helen Greiner — co-founder of iRobot

Colin Angle — another iRobot co-founder, now its CEO

Leo Beranek and Richard Bolt — former MIT professors, founders of Bolt, Beranek and Newman

Desh Deshpande — co-founder of Sycamore Networks; prolific entrepreneur and angel investor

George Whitesides — legendary Harvard chemist; co-founder of Genzyme and other companies

Tom Leighton — MIT Professor of Applied Mathematics, co-founder of Akamai

Danny Lewin — co-founder of Akamai, killed in 9/11 attacks

Ed Roberts — MIT Sloan School professor, angel investor and co-founder of many companies

Alex D’Arbeloff — co-founder Teradyne, former Chairman of MIT Corporation

Robin Chase — co-founder of Zipcar

Nicholas Negroponte — founder of MIT Media Lab and One Laptop Per Child Fundation

Clay Christensen — Harvard Business School innovation guru

Pattie Maes — computer scientist, entrepreneur

Mitch Kapor — founder of Lotus Development Corporation

Ray Kurzweil — inventor and futurist

Dean Kamen — legendary inventor, founder of FIRST Robotics competition

Ken Olsen and Harlan Anderson — founders of DEC

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Adriane Brown was the CEO of Honeywell Transportation Systems, based in the Los Angeles area, when she got a call from a headhunter last year. The next thing she knew, she was talking with Intellectual Ventures, the Bellevue, WA, company focused on the business of invention. One thing led to another, and Brown is now the president and chief operating officer at Intellectual Ventures, helping run the daily operations of the 600-strong firm led by co-founder and CEO Nathan Myhrvold.

Brown admits she was an outsider to the company, and new to its whole concept of supporting inventors, and investing in both new and existing inventions and patents. In fact, her outside perspective is probably one of her strengths. Brown says that when she first looked into Intellectual Ventures as a place to work, she thought, “This company has done something unique and could have a huge impact on the world.”

In her new role, Brown has responsibilities in “all of the key functions across the company,” she told me recently. She has about 10 direct reports, and the biggest adjustment for her has probably been the transition to a smaller, private company. But that transition seems to be going fine. “I just love this job. It is exactly as advertised,” Brown says. “It is a neat addition to my career.”

Brown’s experience is both broad and deep. She spent 19 years at Corning (NYSE: GLW), the materials and manufacturing giant, where she rose from the rank of shift supervisor to vice president and general manager of environmental products, and became an expert in the automotive industry. She then moved to AlliedSignal, which acquired Honeywell (NYSE: HON) in 1999 (the merged company is called Honeywell). There, she distinguished herself in the aerospace sector, becoming president and chief executive of Honeywell Transportation Systems, a $5 billion business unit. Before all of that, Brown studied environmental health at Old Dominion University (where she later received an honorary doctorate in humane letters) and got a master’s degree in management at the MIT Sloan School of Management as a Sloan Fellow.

I recently had a chance to speak with Brown and hear about her first 100 days on the job. She started on January 1, and this was, to my knowledge, her first media interview since joining. We didn’t have time to drill down into new details of the company’s strategy, but I got the sense that she is both a process person and a people person, and that she brings a unique worldview to Intellectual Ventures’ leadership. Here are some condensed and edited highlights from our conversation:

Xconomy: You talked about having impact on the world. Can you give some examples of how your background fits with Intellectual Ventures’ broad vision?

Adriane Brown: My undergraduate degree was in environmental health. Over time, as I spent a number of years at Corning, I rose to lead the catalytic converter business. While it was the automotive industry, we were incorporating a technology that makes a difference in the world. When I traveled to Third World countries, the first thing I noticed was the pollution.

After Corning, I was looking to be uncomfortable. I find it exciting to step into a situation … Next Page »

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Intellectual property battles are a perennial hot-button topic in the tech world. Recently we’ve been hearing a lot about so-called “patent trolls,” companies that don’t produce goods or services but rather acquire patents and then try to extract licensing fees from firms they say are infringing on those patents. Most of these disputes involve lawsuits, and an increasing percentage of all patent litigation cases involve patent trolls—roughly 15 percent, according to some sources.

John Amster and his company, San Francisco-based RPX, are trying to do something about this. First, some background. Before co-founding RPX in 2008, Amster spent three years at Intellectual Ventures, the Bellevue, WA-based invention firm led by former Microsoft chief technology officer Nathan Myhrvold. Amster was IV’s general manager of strategic acquisitions and vice president of licensing, based in San Francisco.

Amster started RPX together with co-CEO Geoffrey Barker, another former Intellectual Ventures vice president of licensing, and Eran Zur, the firm’s president. RPX is focused on “defensive patent aggregation.” It buys up patents across a wide range of tech areas, including consumer electronics, mobile handsets, telecommunications, software, Internet, and e-commerce, and charges companies for access to the intellectual property. The idea is to take those patents out of the arsenal of patent trolls, and grant tech companies licenses to the IP stockpile so they can defend themselves more efficiently. Companies pay RPX an annual fee ranging from $40,000 to $5 million, depending on their size.

RPX has been on a tear lately, signing up big customers like Cisco Systems, IBM, Intel, Microsoft, Hewlett-Packard, Nokia, Sony, Samsung, LG, and HTC. A couple of weeks ago, the company announced it has added Dell and Acer to its list of “members,” which now includes 42 firms. So far, it has spent more than $200 million to acquire more than 1,300 patents. RPX is venture backed by Kleiner Perkins Caufield & Byers, Charles River Ventures, and Index Ventures. The company has 40-some employees—three in the Seattle area (including co-CEO Barker)—and it is actively hiring.

Some observers have called RPX a competitor to Intellectual Ventures, but Amster challenges that premise. “We’re completely different. We have two very different visions and goals,” he says. “[Intellectual Ventures] has raised a vast amount of money and has a very diverse set of businesses, from early-stage invention all the way through patents. It’s a totally different business-model vision. They’re a private equity fund for invention. The patent piece is small.”

I recently spoke with Amster by phone to hear about RPX’s progress against patent trolls, and to get his thoughts on where the marketplace for intellectual property is headed. To me, it’s really interesting that defensive “protection” companies are sprouting up to serve the tech community—and where is the line between defensive firms and the trolls?

Here are Amster’s responses to three of my questions, edited for length and context:

Xconomy: Tell me about your vision for RPX and how it’s unique in the world of technology and IP.

John Amster: The basic idea was looking at this problem of patent trolls, or non-practicing entities (NPEs). The difference between [the terms] “patent troll” and “NPE” is important. Why has this thing been phrased as a negative thing? Why is it pejorative? The philosophical view of a lot of companies is that something’s wrong with that. That’s not really true though—at the end of the day, patents are … Next Page »

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This week, I’ve learned a lot about game-changing ideas and how to think about making them work. Like anything meaningful, some of the lessons will take more time and effort to sink in. But here are five lessons to take away from our Xconomy Forum (“What’s Your Breakthrough Idea”) held at the University of Washington on Monday:

1. Not everything is, or should be, a breakthrough idea. Nick Hanauer of Second Avenue Partners framed the whole discussion by pointing out that entrepreneurs have different motivations: some might want to make a lot of money whether or not they change the world; others may want to change the world whether or not they make much money. Either approach is perfectly valid; just be true to yourself.

2. Venture capital alone won’t sustain breakthrough ideas. VCs don’t fund new ideas or the invention process, said Nathan Myhrvold of Intellectual Ventures. Instead, they fund “zillions of ‘me-too’ ideas,” he said. Which is why Myhrvold is trying to create a new “invention capital” marketplace—and why his company has awarded $315 million to individual inventors in the U.S. and has deals with more than 100 universities to support the invention process.

Meanwhile, Hanauer told me last week that most VCs don’t take risks anymore because the VC business model rewards those who can simply avoid a major screw-up. “The business model is toxic to risk-taking, because it’s so unbelievably profitable for the partners just if it doesn’t fail,” he said. (Of course, VCs will tell you that their model isn’t broken—because it isn’t.)

3. The proper mindset of breakthrough-idea thinking is to be “narrowly insane but not a total whack job,” as Myhrvold put it. By narrowly insane, he meant that inventors need to be crazy enough to think they can do something unprecedented, without being delusional. Put a different way, it’s helpful to be a “high-functioning contrarian,” as Hanauer says Jeff Bezos has described him. (“A low-functioning contrarian means you’re in prison,” Hanauer adds.) In other words, try to see the world differently, and imagine what would happen if things were arranged in other ways. Amazon.com, for example, delivered more than 10 times the selection of a brick-and-mortar store at a cost savings of more than 25 percent. That’s the kind of thinking that can transform an entire industry—in this case, those who sell books (for starters).

4. Part of being a good entrepreneur means not listening to your critics, or the entrenched interests. As Lee Hood from the Institute for Systems Biology and Integrated Diagnostics put it succinctly (I’m paraphrasing), people have seriously doubted him six or seven times in the past—and he’s been right every time. (He didn’t say how long it took to be proven right.) But the basic message was that if you want to change the world, you will meet with resistance—the people and companies in power don’t want things to change—but don’t let that deter you. Hanauer stressed the importance of … Next Page »

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One of the founding fathers of the personal computing era, Microsoft Research technical fellow Chuck Thacker, has won the Association for Computing Machinery’s A.M. Turing Award, which is often called the “Nobel Prize of computer science.” The award, which was announced today, comes with a $250,000 prize, sponsored by Intel and Google.

Thacker, 67, was awarded the prize for his design of the Alto, the first modern personal computer with networking capabilities, which he built while at Xerox Palo Alto Research Center in the early 1970s. It had a TV-like display, which enabled the development of the modern graphical user interface, as well as connections to outside devices like servers and printers. Although the Alto was never commercialized, it influenced generations of PCs in the decades that followed. Thacker was also cited for his contributions to the Ethernet local-area network, the first multiprocessor workstation, and a tablet PC prototype.

I spoke with Thacker by phone this morning—he’s based at Microsoft Research Silicon Valley. “I was actually flabbergasted when I was told” about the award, he says. “Never in my wildest dreams did I think I’d win.” That’s because the Turing Award traditionally has been given to theoreticians or software experts, not hardware people. The previous Microsoft winners of the Turing Award are the late Jim Gray, Butler Lampson of Microsoft Research New England, and Tony Hoare of Microsoft Research Cambridge in the U.K. (Thacker is also a recipient of the Charles Stark Draper Prize and the John von Neumann Medal from the IEEE.)

Thacker says the most interesting thing about the Alto computer was that “it was a complete system.” It connected to servers that stored information remotely and to printers that produced documents. Although the hardware looked “quaint” by today’s standards, he says, the software behind it persisted. In particular, the user interface—keyboard, mouse, how you interact with programs—looked a lot like what we still use today.

So I asked him how he thinks computing interfaces might evolve in the future, given how little they’ve changed in 30 years. Thacker says he thinks about it from the point of view of what computers have not been able to do so far. “One thing I can’t do yet is talk to my computer,” he says. “I can’t carry on a conversation, and I’d like to see that.”

A second area of intrigue is computer-controlled cars and transportation. “I’m not that great a driver. The dents in my door demonstrate that,” Thacker says. “Computers should drive.” (He says he has followed the DARPA Grand Challenge competitions for driverless vehicles for the past few years.)

Given his work at Microsoft Research in tablet computing in the late 1990s—which helped lead to Microsoft’s first Tablet PC—I asked Thacker where he sees the field … Next Page »

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Intellectual Ventures has been making a lot of waves lately. Today the Bellevue, WA-based firm, focused on the business of invention and patents, laid out its arguments for creating a new industry of “invention capital,” in a Harvard Business Review article penned by CEO and co-founder, Nathan Myhrvold. In a separate piece, the New York Times’ Steve Lohr addresses some longstanding questions from Myhrvold’s detractors, who call him a patent troll (more on this below).

In the HBR article, Myhrvold, who is coming off his talk at the TED conference in Long Beach, CA, presents the thinking behind his firm’s efforts to establish a separate marketplace for inventions, loosely following the models of venture capital and private equity. He also gives a status update on where Intellectual Ventures stands, and the formidable challenges it faces.

Invention capital is really the big vision of the company—with patent acquisitions as part of its overall strategy—and it’s fascinating to see how much things have progressed since the summer of 2008, when Myhrvold first spoke with me about it. Back then, the discussion was heavy on the historical context and the need for a new system to nurture inventions and inventors. In terms of results, it was largely wait and see. Now, it’s clear the company’s efforts worldwide are starting to pay off.

Myhrvold writes that Intellectual Ventures has 30,000-plus patents in its portfolios, most of them purchased. To critics who would say the company doesn’t invent anything itself, he notes that its 30 staff inventors and 100-plus consultants applied for 450 in-house patents in 2009, placing it in the world’s top 50 filers (ahead of Boeing, Johnson & Johnson, 3M, Mitsubishi, and Toyota); and that its wider network of 1,000-plus inventors in seven countries applied for more than 1,000 patents last year.

On the technology licensing and patent acquisitions front, he writes that Intellectual Ventures has made deals with more than a hundred Fortune 500 companies and their international equivalents, and that the firm’s “licensing activity has so far earned more than $1 billion.” To put that figure in perspective, Intellectual Ventures has raised some $5 billion from mostly undisclosed large investors (Microsoft is one).

In the Times piece, Lohr quotes critics who call Myhrvold’s outfit “Intellectual Vultures” and say the company uses its huge patent trove as leverage to extract hefty licensing fees. These critics also question Myhrvold’s penchant for setting up hundreds of shell companies and affiliated entities; by masking who actually owns Intellectual Ventures’ patents, this strategy reportedly makes it more difficult for other companies to know where they stand in negotiations with Myhrvold’s firm. Myhrvold is unapologetic about these tactics in the Times article, saying he’ll give up secrecy as soon as everybody else does.

But regardless of what his critics say, Myhrvold has clearly thought a lot about the hurdles that must be overcome in order for new markets ruled by inventors to take off. Here are three of his main ones:

—Managing risk. Myhrvold points out that insurance companies, pension funds, and mutual funds have figured out strategies to deal with this, and that the money it takes is comparable to VC … Next Page »

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Bellevue, WA-based Intellectual Ventures announced this week it has hired Adriane M. Brown as president and chief operating officer, responsible for day-to-day operations. She succeeds Edward Jung, the Intellectual Ventures co-founder, who is returning to his role as chief technology officer. Brown was most recently senior vice president of energy strategy at Honeywell International, and previously held other leadership roles at Honeywell and Corning. Intellectual Ventures is focused on the business of invention. Led by CEO Nathan Myhrvold, the firm has $5 billion under management and more than 650 employees worldwide.

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It’s not every day you get to watch a U.S. senator swallow a swirling ball of liquid nitrogen-cooled foam (yuzu-flavored, no less). Talk about a palate cleanser.

That was just one stop along a rather surreal press tour and ribbon-cutting ceremony this morning at the Intellectual Ventures Laboratory in Bellevue, WA, as Sen. Maria Cantwell got a personal tour of the lab from company co-founder and chief executive Nathan Myhrvold. “The point of the lab is to do prototyping and do research around our inventions,” Myhrvold said. “We never know exactly what we’ll need, so we have to have a lot of capabilities.”

(Among these is a unique way of doing ribbon-cutting, as you’ll see on the next page. All photos courtesy of McKenzie Funk.)

The wide range of capabilities at Intellectual Ventures was on display in a series of lab demos. The tour included glimpses of an expansive cooking-science station (site of the palate cleanser) and setups for doing epidemiological computer modeling of malaria outbreaks; diagnosing malaria by laser light (instead of a blood sample); designing electricity-free vaccine containers that can withstand 105 °F exposure in Africa for six months; and photographing mosquito wingbeats at ultra-high speed (27,000 frames per second). Then came the coup de grace—bug-zapping lasers that work as a “photonic fence” against mosquitoes and agricultural pests (the live-demo lasers were non-lethal and just for show, shooting 50 bugs per second). OK, maybe not the most practical technology yet, but it’s certainly a striking demo.

The lab hasn’t changed much since I saw it last summer; it still has about 30 full-time employees. But overall, Intellectual Ventures has grown to more than 500 staff members, up from 400-some employees earlier this year. The company has also leased space across the street from the lab for a new supercomputing center, presumably to help its researchers perform large computer simulations for epidemiology studies and other complex problems.

Sen. Cantwell, a Democrat who’s midway through her second term for Washington state, asked Myhrvold what Intellectual Ventures is doing for this state’s economy. “We’re going to try to keep … Next Page »

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On Monday, Bellevue, WA-based Intellectual Ventures signed an agreement with the Indian Institute of Technology-Bombay to license some of the university’s inventions and to work on technology commercialization strategies with its researchers, as reported by CIOL, Express India, TechFlash, and other outlets. It’s not really big news by itself—Intellectual Ventures has formed similar partnerships with other institutes in India, as well as in China, Japan, Korea, and soon, Singapore—but it fits into the broader strategy the firm is pursuing around the world to foster invention.

Last fall, Intellectual Ventures opened offices in five Asian countries in an effort to gain access to a much wider pool of inventors and talent. Led by global head of technology Patrick Ennis, a physicist and former managing director at Arch Venture Partners—and other members of Intellectual Ventures’ senior leadership team, including co-founder and president Edward Jung—the company is building relationships with prominent academic scientists in Asia, and setting up partnerships whereby it can license certain inventions in exchange for helping with patents and commercialization. The strategy reminds me a lot of Microsoft Research, which has set up labs in China and India in the past 10 years and built partnerships with local university researchers and administrators. (This blueprint is not surprising, given that Intellectual Ventures’ co-founder and CEO Nathan Myhrvold was the founder of Microsoft Research.)

The reception Intellectual Ventures is getting also reminds me of Microsoft Research. While most university officials see the partnerships as benefiting their researchers and increasing the flow of innovation, critics have rolled out the standard “patent troll” fears that the company is coming in to buy up all the best intellectual property—which will only be assuaged by years of relationship building and repeatedly demonstrating that these sorts of deals can benefit both sides.

Nevertheless, Intellectual Ventures’ Indian operation seems to be off to a strong start. It is now staffed by about 15 people, led by Ashok Misra, the former head of IIT-Bombay and a highly respected polymer materials scientist.

I caught up with the staff of Intellectual Ventures to hear about the workings of the Indian university partnership. Nicholas Gibson, one of the firm’s directors of business development in Japan, said via e-mail, “The agreement with IIT-Bombay is important as it gives [us] more direct access to top flight university-based Indian inventors. The deal also gives IIT-B access to commercialization possibilities … Next Page »

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It’s taken as a given that universities are integral to the innovation process. Researchers create technology, the university finds a licensee or a startup company is formed to develop the invention, and products are created that drive growth in the economy.

But that is a simplistic view of a complex system. And today, a select group of researchers from around the world is gathering at U.C. San Diego to help examine the process of university-industry interaction and technology transfer in more detail. Their focus is a series of questions—that have long been asked but have yet to be definitively answered and are of abiding interest here at Xconomy: What is the true connection between research universities and innovation, and how does it work? How does knowledge really move from the academic laboratory to industry? And are there new ways to improve and accelerate the process?

Sponsored by the Kansas City, MO-based Kauffman Foundation, the seminar is intended to help analyze a global research effort focused on what industry wants from universities, and how those goals can be achieved. The research, part of an onging multi-year study, consists of interviews and other data drawn from more than 90 companies in four countries where innovation and new technologies play a key economic role: the United States, Japan, Canada, and the United Kingdom.

“What we are trying to accomplish is for people to think about what incentivizes and supports a positive interaction between the university and industry,” says Mary Walshok, a UCSD Associate Vice Chancellor and a seminar host. The participants are “people who care about these things, and who are in a position to influence government policy in the U.S., Japan, Canada and the U.K.”

The three-day event begins with a presentation this evening by Larry Smarr, director of the California Institute for Telecommunications and Information Technology, which Walshok says operates as an example of university-industry “best practices.”  The invited participants … Next Page »

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[Updated Jan. 28, with information on Intellectual Ventures' patents (see below)]
If its volume of new patents is any indication, Microsoft is going to be just fine. The Redmond, WA, software firm blew away the rest of Washington state in terms of the number of patents it was granted last year. That’s according to IFI Patent Intelligence, based in Wilmington, DE, which recently released a national survey of patent grants for 2008. Xconomy obtained the figures for Washington state, as well as Massachusetts and California. (See the list of Washington’s top 25 patent winners below.)

Patent awards are, of course, just one measure of an organization’s competitiveness and inventiveness. It’s hard to draw definitive conclusions about a company’s ability to innovate based on its number of patents, say—imagine trying to compare a biotech company with an electronics firm, or a young software startup with an established powerhouse. But it’s still a key measure of an organization’s investment in its intellectual property.

Microsoft’s tally (2,030) is greater than the rest of Washington’s top 25 combined. It was good enough for fourth place nationally, behind IBM (4,186), Samsung (3,515), and Canon (2,114), and ahead of Intel (1,776). In Washington state, Sharp Laboratories and the University of Washington were a distant second and third, respectively.

A few other notables. Boeing is fairly low on the list (16th), in part because the figures only count patents awarded to each organization’s operations in Washington; patents awarded to offices or operations outside the state are not included in this list. Amazon ranks pretty low as well (12th), and Bellevue-based Intellectual Ventures, the invention company, is in 8th place, listed as “Searete.” Lastly, there was a seemingly random tie for 5th place between forestry firm Weyerhaeuser (which just closed two of its Washington mills this week) and biotech company ZymoGenetics (which just bought back the rights to its lead cancer drug candidate today).

Without further ado, here’s Washington state’s top 25 patent winners in 2008:

1. Microsoft — 2,030
2. Sharp Laboratories of America — 144
3. University of Washington — 47
4. Battelle Memorial Institute — 33
5. (tie)
Weyerhaeuser — 28
ZymoGenetics — 28 … Next Page »

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Yesterday, I gave a few highlights from a lunchtime discussion with Intellectual Ventures’ global head of technology, Patrick Ennis. The Bellevue, WA-based firm, founded by Nathan Myhrvold and Edward Jung, is sometimes called an “invention company.” It has gotten a lot of attention—and stirred controversy—for buying up large numbers of technology patents worldwide. So I wanted to hear Ennis’s thoughts on intellectual property, patent reform, and venture capital, among other things. (He’s a physicist by training, and a former VC from Arch Venture Partners.)

But first, Ennis gave me a little taste of how invention sessions work at the firm. He was fiddling with the Saran Wrap on his sandwich, wondering about its material properties and how they might relate to thin-film coatings for medical stents, say. “Inventors see inventions everywhere,” he says. “Invention is not taught, except for kids. When you’re a little kid on the playground, you’re allowed to do this. But as an adult, this would be viewed as weird—’this person is not focused.’ But that’s what inventors do.”

He ran through a hypothetical thought process with his sandwich. “Before we go to bed, we’d know if there are opportunities to invent a better film for food. I suspect we’d find the only opportunities are to reduce a little bit of cost, and maybe to change the marketing of it. A lot of the times at IV [Intellectual Ventures], we look at things like this and it turns out—because it was boring, or viewed as pedantic or mundane—people missed something obvious,” Ennis says. “You want to do a realistic market study. If it turns out there’s only 5 million a year of this sold around the world, it’s not worth your time to invent it. We’d quickly get a number for how much Saran Wrap is sold around the world….Then, someone will raise a hand. ‘You’re just talking about food preparation. These thin films are used for insulation to cover houses.’ Hmm, that’s 100 times bigger than a hamburger…That’s how invention sessions go.”

OK, on to the other highlights from Ennis:

—On patent rights and reform: “Everyone’s whining about there’s too many patent lawsuits, which isn’t true if you look at the numbers,” he says. “You can make a case that stealing someone’s intellectual property is a really bad thing. A lot of patents, people didn’t know they were infringing. Part of the reason they don’t know they were infringing is they’re told not to look. When I was at AT&T in the old days, you were taught as an engineer not to look. Because if you looked, and then it turned out you were … Next Page »

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Why can’t big companies invent? How should inventors handle their intellectual property? And what are countries around the world doing on these fronts? I recently stopped by Intellectual Ventures in Bellevue, WA, to get the scoop from Patrick Ennis, IV’s global head of technology. Ennis was a venture capitalist with Arch Venture Partners in Seattle for 10 years before taking his current post in early 2008. (Between jobs, he took some time off and, among other things, chopped wood full-time for a week.)

Back in October, Xconomy reported that Ennis is heading up Intellectual Ventures’ expansion in China, Japan, Korea, India, and Singapore. The invention company, which is led by founders Nathan Myhrvold and Edward Jung, currently has some $5 billion under management, 450-plus employees, and 160 university partnerships around the world. I wanted to get a deeper sense of Ennis’s philosophies on invention and intellectual property on a global scale.

Ennis organized his thoughts loosely around a talk he gave last month at the Ready To Commercialize 2008 conference, run by the Office of Technology Commercialization at the University of Texas (which happened to be IV’s 100th university partner). In Austin, he spoke on game-changing approaches to commercializing inventions. The conversation we had over lunch in Bellevue was free-flowing and touched on everything from anatomy and antibiotics to Sumerian culture and the Renaissance.

I was particularly intrigued by Ennis’s take on the current state of global competition and its historical context. “It’s a complicated world,” he said. “Leonardo da Vinci could do what he did because the world was not as complicated. Leonardo could not be a Renaissance person today—there’s too much to know.”

A few more highlights from Ennis, in his own words:

—On doing business at Intellectual Ventures: “We want to create a market for invention. We want to reward inventors, perfect the process of invention, and make invention respectable…We don’t ask for exclusive deal sourcing agreements, we like to earn our business a deal at a time, the old-fashioned way. All organizations, if they succeed, have to fight the hubris thing. You see that with all big companies. IBM had it, Microsoft had it, and Google, quicker than any other startup, got it. It’s amazing how the hubris seeped into Google real quick. And the backlash is coming—you see it in the EU and, to a certain extent, in the States.”

“We’re a collection of individuals, and business is always done personally, one on one, whether you work for a 10-person company, or 450, or 4,000,” Ennis says. “That’s when companies lose their way, … Next Page »

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