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Archive for June, 2012


Forced Smoking and Obama Care – Same Results

The Supreme Court has ruled that Obama Care is constitutional.  This is an unprecedented increase in government power which will shorten American lives much as a law requiring forced smoking would.  This law will hurt innovation in health care by co-opting the market mechanisms for creating new technologies and by co-opting funds from the private market.  As a result, we will see fewer new drugs, fewer new medical devices, and rationing of care.  The USA has been the leader in developing new medical technologies and that will end unless this law is repealed and will hurt the medical care and longevity of people around the world.

Longevity is directly correlated to GDP (Gross Domestic Product) per capita, as best illustrated in this GAPMINDER World interactive chart.  The chart allows you to see how changes in GDP per capita from 1800-2011 have affected longevity for over 100 countries.  Government spending as a percentage of GDP is inversely correlated with economic growth or increase in per capita GDP.  The paper “Government Spending and Economic Growth”  definitely shows that higher level of government spending leads to reduced economic growth.

 Evidence from a sample of 23 industrial countries and a larger sample of 60 countries indicates that a 10 percent increase in government expenditures as a percentage of GDP leads to a one percentage point reduction in the rate of growth of  GDP.

In the United  States, the GDP growth  rate has fallen  from  an average of 4.4 percent a year in the 1960s to an average of 1.9 percent a year in the 1990s. In Japan, where government expenditures grew from 17.5 percent of GDP in 1960 to 36.9 percent in 1990, the GDP growth rate fell from an average of 10.6 percent a year in the 1960s to 2.2 percent in the 1990s. The evidence clearly links these lower GDP growth rates with higher levels of government expenditures.

If the United States had kept its level of government expenditures as a percentage of GDP at the same level it was in 1960, real GDP in 1996 would have been 20 percent higher, and the average annual income for a family of four would have been $23,440 higher than it actually was.

To maximize economic growth, government expenditures as a share of GDP should be no more than 15 percent, which is far less than half the current level.

 

Combining the GAPMINDER chart with the conclusions from the paper on economic growth and government expenditures, results in the conclusion that higher government spending has shortened the average American lifespan by about five years compared to where it would be if spending levels as a percentage of GDP had stayed at 1960 levels.  Obama Care further expands government spending and will result shortening longevity much the same as a law requiring forced smoking.

 

 

 
Free Kindle Version of The Decline and Fall of the American Entrepreneur

Get your free Kindle version of the book that explains why the US has lost its innovation engine – The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation.   This offer is valid through Sunday, June 24th.   The book provides simple, inexpensive suggestions for how to rev up the US’s innovation engine.

This book explains how little known laws passed within the last decade have crippled America’s innovation.  This resulted in the stagnation in median family income that was a major contributor to the housing crisis.  The evolving sovereign debt crisis, which promises to make the housing crisis look trivial by comparison, is also being exacerbated by this dearth of innovation.  The book provides simple, inexpensive suggestions for how to rev up the US’s innovation engine.

 

What Reviewers are saying about The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation. 

 “Dale Halling’s Decline and Fall of the American Entrepreneur makes a compelling case for the need to reform regulatory and other policies that hamstring entrepreneurial innovation in our country. Everyone concerned about the decline in American innovation should read this book.”

David Kline, Coauthor of “Rembrandts in the Attic” and “Burning the Ships”

 

I do not review books on the Net unless I find them well-written and especially informative, which certainly applies to Dale B. Halling’s The Decline and Fall of the American Entrepreneur.

Nonetheless, I do have a criticism directed towards the publisher. My copy did not contain a vita of the author, which in this case is a major omission. Mr. Halling is a physicist, lawyer and an expert on patents and entrepreneurship, all of which comes through in his book. This author delivers the goods. A vita in subsequent printings would be useful.

Mr. Halling combines two topics — the impediments to entrepreneurship that have been created by theU.S. government as an unintended consequence of its pursuit of other goals and the systemic weakening of theU.S. patent system by the U.S. Supreme Court and the Congress.

The resulting technological stagnation is a major reason theU.S. has gone from producing 25 percent of the World’s Gross Product in the mid 1990s to about 20 percent today. The loss is significant – about $3 trillion of U.S. GDP in 2009 alone.

He demonstrates in clear terms the linkages between economic growth, productivity, and income. And he lays out how technological advancement has always been the American advantage in global competition, an advantage that theU.S. is squandering.

He explains how the Sarbanes Oxley Act cut off the waves of venture investment that did so much to stimulateU.S.growth in the 1980s and 1990s, and he also explains how shifts in accounting rules as per stock options directed many of our most creative people into less than innovative activities.

His final chapter contains some straight forward recommendations that involve no direct-cost regulatory changes that would once again stimulate more innovation, investment and job creation inAmerica. Amazingly, Congress is now considering a so-called “patent reform” legislation that would further diminishU.S.innovation. The author convincingly explains how this would damageU.S.innovation. He also explains the consequences of recent Supreme Court decisions on patent law. My observation is that theRoberts Courtis the most anti-patent set of Justices inU.S.history. Once Congress understands what the Court has done, their decisions need to legislatively overturned.

In sum, this is well-written, jargon-free, 137-page book that is a quick read. It evidences smart and practical thinking by an author with real world experience. I highly recommend it.

Dr. Pat Choate, economist, former Vice Presidential running mate of Ross Perot 1996, Director of the Manufacturing Policy Institute, Phd. Economics University of Oklahoma.

 

The Decline and Fall of the American Entrepreneur presents the issues facing technology start-up companies in today’s environment.  The book sheds light on the underpinnings of these issues and is enthralling.  Halling’s tight, accessible and personal style make this a fast and compelling read.  His book is a political clarion call that should be heard now.

Greg Jones

Former President Ramtron International (RMTR) and CEO Symetrix Corporation.  Both companies founded on IP.

 

This book conclusively establishes the link between innovation and per capita income, and shows that we have recently entered into a time in which innovation is under assault.  This assault has resulted in a predictable loss of income and contributed significantly to the economic woes we are experiencing right now.  The book’s sound policy recommendations suggest a way to turn the economic ship around to set a course for a return to prosperity.

Peter Meza, Patent Attorney – Counsel Hogan & Hartson, Attorney for Alappat –  In re Alappat

 

 

 

 
IPXI Exchange Model Issues

Gametime IP and IPWatchdog have recently written excellent articles on IPXI.  However, I still see a problem with IPXI’s model.  Namely – are the number of ULR limited?  If so then they will become all used up.  Now imagine launching a new product that is going to need a license.  Yes, I can buy a number of ULRs, but I don’t know how many I will need.  If the product is highly successful, I might need more ULRs than are ever offered.  I doubt many business is going to take that risk.  Alternatively, if the number of ULRs are not limited how do I know that IPXI will not flood the market?  If they can issue additional ULRs for the same patent, I am going to have a very difficult time determining what price I should pay for them.

There are two broad exchange models out there.  One is the stock market and the other is the commodities market.  Because Mr. Gerard Pannekoek, CEO of IPXI, comes from the commodities side of the world, it appears that IPXI is trying to model there exchange on a commodity exchange.  A commodity exchange has a consumable item it is exchanging and the ULR is an attempt to create a similar consumable item.  With a commodity additional units can be produced.  With a patent the number of ULRs to the patent could also be increased, but they do not have to be produced in any sense of the word.  You can rationally price a future contract for a commodity because the amount of production is limited.  For instance, only so much land is devoted to corn production.  It takes a certain amount of time for the corn to be produced.  The amount of corn in storage can be determined.  In addition, the need for the corn is likely to be fairly well defined.   None of this is true of ULRs.  If you are designing a new product that requires a ULR, then you have no idea what the sales of the product will be in ten years.  You have no idea if the underlying technology will still be important in ten years.  Finally, you have no idea how many ULRs will exist.  So you neither can predict the demand or the supply for a ULR – unless it is only dealing with products and technologies that have been in the marketplace for awhile. You cannot rationally price a ULR (assuming more can be issued for the same patent) because there are no constraints on the issuing of more ULRs.

A stock exchange model would be more complex, but I believe a more viable model.  Each patent or a portfolio of patents could be seen as a company.  IPXI could issue shares in the patent groups and the shareholders would receive a percentage of the earnings.  These securities would look a lot like oil and gas leases, in that they have a finite life.  The value of the patent security would be based not only on the value of the underlying patent(s) but in the ability of the management group to increase revenues.  Most economic models show that the biggest return for a patent is to non-exclusively and widely license the technology.  Since the patent company would not be a producer, their interest would be consistent with a widely licensed technology.  They would also have an incentive to provide technical expertise on how to use the technology and a disincentive for frivolous litigation.  They could offer standardized licensing contracts that would also eliminate the high cost of bilateral negotiations.  The money from the initial offering would be used to create the management team and promote the patented technology.  Investors would have the knowledge of sales and earnings that they have for a company or oil/gas lease.  These companies would probably exist today but for Sarbanes Oxley and other related securities laws that make it too expensive to go public in the USA.

 
How the Environmental Movement is Killing Innovation and Destroying Our Environment

Environmentalists are often portrayed by the Media as lovable, good natured people; people  who only want to save some adorable furry creature.  Environmentalist groups target new technologies claiming that they are dangerous or unproven.  The policies they advocate are anti-innovation and have destroyed advances in medicine, food production, power generation, vaccines, and more.  These policies have resulted in the deaths of more people than Hitler, Stalin, and Moa combined.  These deaths are not the result of good intentioned policies gone wrong;  these policies are the purposeful goal of environmental groups.  Environmentalists have consistently proven that they are willing to lie in order to achieve their objectives.  Being “Green” is worse than being a Nazi, worse than being a Marxist;  but  these policies do work hand in hand with these statists philosophies.

I will briefly outline three environmentalist policy areas where environmentalists have lied about science. and  even more important than lying, these policies have killed millions of people.

DDT

Silent Spring by Rachel Carson resulted in the banning of DDT.

Deaths Caused by DDT Ban

In 1970, the U.S. National Academy of Sciences estimated that DDT saved more than 500 million lives during the time it was widely used.   Banning DDT has resulted in about 100 million deaths, many of whom were pregnant women and children.  By comparison: Hitler killed about 6-7 million, Stalin killed around 10-14million, and Mao killed between 60-68 million.

FYI: The ban on DDT is why the US is currently having infestations of bed bugs; most people born after 1940 thought these were eradicated like polio.

Lies about DDT

Carson claimed DDT thinned the eggshells of birds.  This was based on 1956 study by Dr. James DeWitt, published in the Journal of Agriculture and Food Chemistry.  However, DeWitt’s study actually showed that 50 percent more eggs hatched alive from the birds subjected to DDT than the non-DDT group.  Other claims suggested that raptor populations declined because of the use of DDT; however, raptor populations were failing before the introduction of DDT.   In fact, the Audubon’s Eagle counts from 1941 to 1961 actually increased when DDT was mostly widely used.  All the latest evidence shows,  Carson’s claims were nothing but outrageous lies.

Goal of Banning DDT was to Kill People

Alexander King, founder of the Malthusian Club of Rome, wrote in a biographical essay in 1990:

“My own doubts came when DDT was introduced. In Guyana, within two years, it had almost eliminated malaria. So my chief quarrel with DDT, in hindsight, is that it has greatly added to the population problem.”

 Dr. Charles Wurster, one of the major opponents of DDT, is reported to have said,

“People are the cause of all the problems. We have too many of them. We need to get rid of some of them, and this (referring to malaria deaths) is as good a way as any.”

 

Nuclear Power

Anti-Nuclear power activists claimed that nuclear power generation would result in the deaths of thousands of people.  This movement was able to kill off the nuclear power industry in the United States after the Three Mile Island accident in which no one was killed and the average person within ten miles of the accident received the equivalent on one chest xray of radiation.

Deaths Caused by Nuclear Power Ban

The main alternative to nuclear power plants in the World ,to date ,have been coal fired plants.  For each person killed by nuclear power generation (including deaths due to Chernoybal), 4,000 die from coal. The previous data is adjusted for how much power is produced by each method of power generation.   The number of people killed per year in the US because of this change is at least 10,000.  These deaths are mainly due to particulate pollution(nuclear power has no particulate pollution). This figure also includes an increase in the number of mining deaths, and increases in the number of deaths due to the extra transportation required to move coal compared to transporting uranium.  In the United States alone: this  environmental program has resulted in at least 300,000 deaths.  Why has this not made headlines??! While the rest of the world has not followed the U.S.’s lead completely, the anti-nuclear movement has definitely retarded the development of nuclear power plants around the world.  As a result, a reasonable estimate of the deaths worldwide because of the environmental policies is at least 600,000.

Nuclear power plants represent a huge reduction in air and water pollution.  Real reductions in pollution are the result of advancing technologies, not regulator schemes such as the EPA has adopted.  In fact, regulatory agencies can be credited with increasing pollution levels compared to what it would be without their influence.

The largest one time event fatality toll from energy production was in 1975.  30 dams in central China failed in short succession due to severe flooding.  An estimated 230,000 people died. The fatalities and property destruction from this single event in hydropower far exceeds the number of deaths from all other energy sources.   Of course, hydroelectric power is one of the environmentalists’ favorite source of power.

Lies about Nuclear Power

The number one lie is about nuclear power is that an accident could result in the death of thousands of people.  Another boogey man of the environmentalists is that the half lives of byproducts from nuclear power lasts tens of thousands of years.  What if the half life were infinite?  Wouldn’t that be worse?  If the half life were infinite,  the element would be stable.  Longer half lives mean that there is less radiation.  Nuclear power plants accelerate the natural radioactive decay of uranium, so leftover fuel rods are less radioactive than the mined material.

Nuclear power plants are too expensive to make economic sense.  This is another lie perpetuated by environmental groups.

Nuclear power is not intrinsically expensive. What drove nuclear plant costs up were environmentalist delays (caused by anti-nuclear “interveners” and the high interest financing rates—both perpetrated by those who wanted to kill nuclear power, and who now complain that nuclear costs too much. Shown here, in dollars per kilowatt are the rising costs of financing, environmentalist delays, and construction materials increases for nuclear (N) and the rising costs for comparable coal-fired plants (C) with sulfur removal.

Source: Electric Power Research Institute

Goal of Banning Nuclear power was to Kill People?

There does not appear to be any environmental wacko comments to this effect;  certainly  it hasbeen the result and since the environmentalism movement believes there are too many people-well,  it seems this was likely part of their goal in killing off nuclear power.

Global Warming

Man made global warming or Anthropogenic Global Warming (AGW) is the latest hoax being thrust upon us by Environmentalists, who I have already shown,have a very poor track record.

Deaths Caused by Global Warming Hoax

The United States is spending about $10 billion a year on Global Warming research.   I think it is safe to say that at least $100 billion has been spent worldwide on Global Warming over the last decade.  It costs about $20 to provide infrastructure for clean water for one person.  According to WHO, 30,000 deaths occur every week from unsafe water and unhygienic living conditions.  Most of these deaths are children under five years old.  That is over 600,000 deaths per year because of poor water infrastructure.  If the $10 billion being wasted on Global Warming research were instead applied to water infrastructure, this could save 50 million lives.  Why can’t we say that the Global Warming Hoax has cost the lives of at 6 million people.?

How AGW Advocates Have Lied

“The latest data released by the Met Office, based on readings from 30,000 measuring stations, confirms there has been no global warming for 15 years.”

It is well known that the main driver of the temperature on Earth are the variations in the amount of solar energy the Earth receives.  “Experiments at the CERN laboratory in Geneva have supported the theory of Danish physicist Henrik Svensmark that the sun — not man-made CO2 — is the biggest driver of climate change.”

The biggest greenhouse gas is water vapor – over 95%, but you never hear about this from AGW advocates.

Natural wetlands produce more greenhouse gas contributions annually than all human sources combined.”

Below, IPCC Experts comment on the IPCC, which is the group at the UN that has been saying a consensus of scientist s “believe” in Global Warming.

Dr Vincent Gray: “The (IPCC) climate change statement is an orchestrated litany of lies.”

Dr. Lucka Bogataj: “Rising levels of airborne carbon dioxide don’t cause global temperatures to rise…. temperature changed first and some 700 years later a change in aerial content of carbon dioxide followed.”

Dr Richard Courtney: “The empirical evidence strongly indicates that the anthropogenic global warming hypothesis is wrong.”

Dr Eigil Friis-Christensen: “The IPCC refused to consider the sun’s effect on the Earth’s climate as a topic worthy of investigation. The IPCC conceived its task only as investigating potential human causes of climate change.”

Goal of AGW

The goal of AGW is to kill capitalism and as a result kill millions of people.  Patrick Moore, a co-founder of Greenpeace explained.

 (Environmentalism today is) more about globalism and anti-capitalism than it is about science or ecology….

The Environmental Movement is Anti-Human – Pure Evil

 “Ultimately, no problem may be more threatening to the Earth’s environment than the proliferation of the human species.”

Anastasia Toufexis, “Overpopulation: Too Many Mouths,” article in Time’s special “Planet of the Year” edition, January 2, 1989.

“Today, life on Earth is disappearing faster than the days when dinosaurs breathed their last, but for a very different reason….Us homo sapiens are turning out to be as destructive a force as any asteroid. Earth’s intricate web of ecosystems thrived for millions of years as natural paradises, until we came along, paved paradise, and put up a parking lot. Our assault on nature is killing off the very things we depend on for our own lives….The stark reality is that there are simply too many of us, and we consume way too much, especially here at home….It will take a massive global effort to make things right, but the solutions are not a secret: control population, recycle, reduce consumption, develop green technologies.”

— NBC’s Matt Lauer hosting Countdown to Doomsday, a two-hour June 14, 2006 Sci-Fi Channel special. 

 

Alexander King, founder of the Malthusian Club of Rome, wrote in a biographical essay in 1990:

“My own doubts came when DDT was introduced. In Guyana, within two years, it had almost eliminated malaria. So my chief quarrel with DDT, in hindsight, is that it has greatly added to the population problem.”

 Dr. Charles Wurster, one of the major opponents of DDT, is reported to have said,

“People are the cause of all the problems. We have too many of them. We need to get rid of some of them, and this (referring to malaria deaths) is as good a way as any.”

 
IPXI: Securitizing Patents

IPXI is an attempting to create an exchange for the transfer of patent rights.  Their website states that they intend to offer Unit Licensing Rights (ULRs) that can be bought and sold on their exchange.  A URL represents the right to use a patent in one instance of a product.  For instance, if patent A covers a new fuel injection technology, the owner of one URL in patent A has the right to produce one engine using the fuel injection technology.  IPXI’s website provides the following example:

For example, let’s say Company A owns a patent on technology that it uses in jet engines. But that technology also has applications in the production of truck engines. So, Company A decides to offer a ULR contract on IPXI permitting the purchaser to produce 5,000 units of its product with Company A’s patented technology. Company B, a truck manufacturer, realizes the usefulness of the patent and purchases the ULR contract from Company A through the exchange. Company B now owns a license to produce 5,000 truck engines using Company A’s technology.

The reported goal of IPXI is to reduce the cost of licensing technology compared to the present method of bi-lateral lawyer heavy negotiations.  This is a noble goal, but IPXI’s website is very short on specifics.  Apparently, this is because the exact methods of the exchange will be worked out by the founder members sometime in the future.  Right now IPXI is trying to find enough founding members to make the exchange viable.

I have written on ideas to create such an exchange.  For instance see Jump Starting a Secondary Market for Patents , in which I argue that Standards Committees could be converted into an exchange for transferring patent rights.  I note that IPXI founders are going to function very much like a standards committee.

Here are some of the problems in no particular order that will need to be resolved in order for IPXI to be viable.

Market Exclusion:  In IPXI’s example above, it is not clear that Company A can exclude the purchasers of its ULR from making a competing product.  The licensing fees may not make up for the lost market share, in which case companies will only offer patents that have no strategic value to themselves.

Number of ULRs:  Are the number of ULRs for a patent limited?  If they are limited, a company is going to be reluctant change their manufacturing process to incorporate this new technology.  Also the company will be reluctant to buy all the potential number of ULRs they might need up front.  If they are not limited, then the purchaser is going to worry about dilution of their ULR shares.  If they pay ten dollars per URL today, will the company holding the patent right suddenly flood the market next year and they could buy the ULRs for a dollar next year?

Validity:  What if the patent underlying the ULR turns out to invalid?  Is the money refunded?  Is the patent researched for validity before the offering?  If so are there any guarantees associated with the opinion?

Infringement Offensive:  Who is responsible for defending a patent if it is infringed.  Clearly, the value of my ULR decreases if the underlying patent is being infringed.  The best answer to this question would be that IPXI defends the patent, sort of like ASCAP.  In that case IPXI would undertake its best efforts to defend the patent if it agreed the patent was being infringed.  There would be no ramification if IPXI were unable to prove infringement.  Unfortunately, this does not meet the stock exchange model.

Infringement Defensive:  Are the seller’s of the ULR in the patent guaranteeing that practicing the patent does not infringe any other patents?  Is the issuer or IPXI going to conduct a clearance search?  If not the value of the ULR are going to suffer accordingly.  If the underlying patent is contested in court, who has the responsibility for defending the patent?  I believe the best way to solve this problem is to have IPXI defend the validity of the underlying patent.  But what if this causes a conflict between two patents that IPXI has issued ULRs for?

Accounting:  How does the issuing company know that the purchaser only built the number of licensed items they purchased ULRs for?  Does anyone have a right to an accounting?  If so who?

Process patents:  How does the ULR deal with process patents?  What if the process is not related to a number of units?  For instance, what if I have a way of processing integrated circuits?  Do the ULRs apply to the number of wafers?  What if the wafer diameter changes?  What if the pitch on the wafer shrinks?

Exclusive Licenses:  IPXI admits that its present model only works for non-exclusive licensing.  I think this is a minor problem.

 

Conclusion

I think IPXI’s goal is admirable.  However, I think there are a large number of issues to resolve before the idea is viable.  Ultimately, I believe IPXI needs to take on a much larger role than a standard stock exchange.  I think an enhanced ASCAP model is more likely to be viable.

 
WOODLAND WORKWEAR AWARDED UTILITY PATENT

For Immediate Release - Colorado Springs, CO. USA– June 1, 2012

Woodland Workwear USA is pleased to announce that on May 1, 2012,  it was awarded a utility patent by the United States Patent and Trademark Office for its KNEEDZ® Gel Kneepad Technology.

“This has been a long process but definitely well worth the wait.  We are very pleased with the outcome and now we can continue to focus on promoting our KNEEDZ® Gel Kneepad work pants knowing that we have patent protection for our intellectual property.  Our founding partners invented a great product that continues to solve a serious safety problem in the workplace,” states Dale Pelletier, President & CEO of Woodland Workwear.  “In the spirit of innovation and creativity, we celebrate our patent knowing that it will change the lives of workers for many years to come.  We will continue on our quest to solve safety problems in the workplace through innovation and technology.”

The patent was issued under number 8,166,570 and protects Woodland’s invention of gel kneepads that are permanently built-in to work pants for a term of more than 20 years.

 

About Woodland Workwear

Founded in 2007, Woodland Workwear (www.kneedz.com) is a premier manufacturer of safety work apparel featuring KNEEDZ® Gel Kneepads built-in.  Woodland Workwear focuses on developing solutions that improve the lives of workers.  Woodland’s product line includes a wide variety of work clothing styles that include flame resistant (FR) and gear made for women workers.  Woodland’s corporate headquarters and distribution center is based in Colorado Springs, CO. USA.

 

 

Press Contact:

Dale T. Pelletier/President & CEO
Woodland Workwear, LLC.
2725 Ore Mill Road

Colorado Springs, CO 80904

dpelletier@kneedz.com

(719)630-5153

 

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