My personal wake-up call happened in November 2008. The financial crisis was exploding, the hot start-up computer company I worked for, OQO, was in the process of shutting down, and my 19-month-old son had just been diagnosed with Type 1 diabetes. Unlike when someone is laid off and can receive ongoing benefits, when a company shutters and jobs are disappearing everywhere, there is no Cobra coverage.

At the time, I was responsible for building and growing OQO’s patent portfolio. It was staffed with some of the smartest and most talented people I have ever met. OQO pioneered innovations in computer miniaturization, antenna design and power management. Unfortunately, due to delays in getting patents processed, OQO had 13 patents granted but over 90 pending, and without further collateral, the company was out of time and options.

Instead of helping the company though a critical time, the complexity and inefficiencies in the patent system contributed to the entire 100+ employee company being lost.

Since that time, I have worked to make sure things like this don’t happen again. As a former U.S. patent examiner and advisor to the Obama-Biden transition team, I was appointed by the Obama Administration to help fundamentally reform the quality and speed with which patents are issued. Today, there is a fast track for small businesses to build large patent portfolios quickly, and expanded work-sharing programs with patent offices all over the world. Last year, the Small Business Administration Office of Capital Access supported over $30 billion in financing and is now working with the USPTO to better ensure that lenders can feel more confident that patents are able to be used much like equipment, machinery, or real estate to secure financing.

Since leaving the Administration, I’ve joined MDB Capital, an investment bank which looks to capitalize early stage companies with disruptive technology. MDB has invested millions in building internal tools which we use to more deeply understand patent portfolios and better assess companies with potentially disruptive innovation.

Late last year, a number of Yahoo investors approached me to better understand the value of Yahoo’s patent portfolio. One of those investors was Eric Jackson, who published a portion of my analysis under the seemingly prophetic headline “The Owner of Yahoo!’s Patents Could Cripple Facebook’s IPO Aspirations.”

When major companies like Yahoo and Facebook go to war over patents, the company with the strongest assets is going to win.

Patents are technical and legal documents, each one costing about the price of a new Fiat 500 to draft. There is a very small community of IP professionals who write, prosecute and sell these assets. Of the over 1,000,000 attorneys in the United States, only 30,000 or so have passed the Patent Bar. So few, in fact, that the USPTO allows scientists and engineers to take the exam, adding about 10,000 more “Patent Agents” admitted to practice patent law before the USPTO.

This means that at any given time, depending on the technology area, there are only a few thousand people who really have any idea what a given patent likely covers, or what it’s potentially worth.

And that is at the core of all these IP wars.

The entire reason the patent system exists is that the Government wants to buy something from inventors: Disclosure. Society benefits when inventors disclose their ideas so that later innovators can learn from, reproduce and build upon or around those ideas. What the Government gives the inventor is exclusivity — it grants the right to exclude others from making, using or selling those new innovations.

But remember — in certain industries, almost no one really knows what a patent covers. And nowhere is this issue worse than in IT and Software.

So many companies in these industries launch products without even bothering to check whether or not a new feature or function would be covered by granted patents or pending applications. What many of them do instead is enter into broad cross-licensing agreements with their customers, competitors and suppliers, ensuring a relatively stable, peaceful existence with respect to IP. When they overlap a small patent portfolio of a company or inventor unable to commercialize, they typically litigate or purchase the assets, however with far lower stakes.

Going public with roughly 60 granted patents, Facebook clearly did not see the portfolios or players in its space as presenting an IP risk. Yahoo owns over 1,200 patents from over 2,700 different inventors. Its top 10 patents alone have been cited over 2,200 times by later inventions.

More broadly, the top patent holders in the world are all hardware or software companies, all have over 20,000 granted U.S. patents, and together average a three year compound annual growth rate of over 10 percent — Facebook ally Microsoft among them.

These IP dynamics are not going away. The large players have spent billions over decades to use IP and strategically position themselves within their markets. Google learned this the hard way in the mobile space, watching large established players prevent it from buying the Nortel patents, extracting royalties from its customers, and eventually compelling the purchase of Motorola Mobility and its thousands of patents for over $12 billion. Today, the OQO patent portfolio is owned by Google.

Facebook is having the same growing pains with Yahoo, but is following the same roadmap in rapidly acquiring assets applicable to its ecosystem, and ultimately, given its applicability to Google, Apple, and Amazon among others, it is still possible that Yahoo could be Facebook’s Motorola Mobility.

Twitter seems to be in the worst position of all. Having secured little IP for itself, despite developing a significant and important communications platform, Twitter recently decided to needlessly encumber any future patent portfolio it may develop with its recently announced Intellectual Property Agreement, making that portfolio nearly impossible to value or transact. If Facebook is acquiring arms, and Yahoo is building them, then Twitter is playing Russian roulette.

I only wish I could communicate the feeling of watching the business tide rapidly turn, and having everything riding on a valuation of your IP.

Erin-Michael Gill is Managing Director and Chief Intellectual Property Officer of MDB Capital. He is a registered patent agent and licensed securities broker. He has no individual holdings in any of the companies discussed above. The opinions presented are his alone and are not intended to be nor should they be construed as legal or investment advice.

In a ruling issued moments ago, ITC Judge Thomas Pender found that Apple infringed the first four claims of Motorola patent # 6,246,697 — “Method and system for generating a complex pseudonoise sequence for processing a code division multiple access signal.”

“We are pleased that the ALJ’s initial determination finds Apple to be in violation of Motorola Mobility’s intellectual property, and look forward to the full commission’s ruling in August,” Motorola said in a statement to AllThingsD. “Our commitment to innovation is a primary reason why we are an industry-leader in intellectual property, and our focus continues to be on building on this strong foundation to enhance the user experience.”

But Apple says this ruling isn’t much of a victory for Motorola. For one thing, the ITC ruled in its favor on only one out of four disputed patents. For another, the patent it did find Apple to have infringed is a standards-essential one that the iPhone maker alleges Motorola refuses to license under fair and reasonable terms. And Motorola’s standards-essential patent licensing policies are currently under investigation by the European Commission.

“We’re glad the court ruled in our favor on three of four patents patents being considered,” Apple spokeswoman Kristin Huguet told AllThingsD. “The fourth covers industry-standard technology which Motorola has refused to license to Apple on reasonable terms. A court in Germany has already ruled that Apple did not infringe on this patent, so we believe we will have a very strong case on appeal.”

In a speech given at the Concurrences conference in Paris today, Almunia promised to take a hard line with the abuse of technology standards-related patents.

“When monopolies and tight oligopolies are allowed to occupy a market, they tend to resist change and often end up caring only about the preservation of their business models,” Almunia said. “Owners of such standards essential patents are conferred a power on the market that they cannot be allowed to misuse.”

And should they try, there will be hell to pay, because Almunia is fully prepared to use the EU’s antitrust powers to thwart them.

“I am determined to use antitrust enforcement to prevent the misuse of patent rights to the detriment of a vigorous and accessible market,” he said. “I have initiated investigations on this issue in several sectors and we will see the results in due time.”

Among those inquiries? A formal investigation into Samsung to determine whether it’s using standards-essential patents to manipulate the mobile market in Europe.

Ahead of the dinner, Anderson stopped by my office to let me have a peek at his 10 predictions, and we talked them over a bit. All 10 are below, along with some comments from Anderson that emerged from our conversation.

Before diving into the predictions, Anderson tells me there is a grand theme that unifies them all: “Integrating everything.”

What does that mean? “It means a whole lot of stuff that needs to be integrated. We don’t need anything new at all. There’s so much work that needs to be done with the existing tool sets. Steve Jobs didn’t really invent anything at all. But he was great at integrating things into a product. There’s a lot more of that work to do. We have to do it in the phone world and the TV world and the health care world. We have lots of devices and lots of chips and lots of operating systems and lots of content. The bigger question is, how do human beings use it all efficiently?”

As an example, he cites the collaboration between Nuance, the speech software company, and IBM, bringing the Watson computer of “Jeopardy” fame into the area of health care. “For the first time, the idea of evidence-based medicine won’t just be in a magazine article,” Anderson says. “A doctor will be able to pick up his phone and describe four symptoms, and find out what the likely diagnosis is, what the indications are. It’s fantastic.”

So here are those 10 predictions, with additional comments from Anderson:

1. TV becomes the new center of gravity in the tech universe. All the other devices find their niches in the TV galaxy. Microsoft’s attempt to integrate Kinect into TV is a strong if qualified success. Smart phone-TV integration software becomes a new category. Pad-TV integration becomes common.

“Apple will hustle to launch the next version of Apple TV, and it will be a roaring success and be seen as Tim Cook’s first great product success. But what it really will be is Steve’s last product.”

2. 2012 will see tectonic shifts in phone markets. “Nokia will fail to come back, which is pretty clear to everyone except the people in Finland.” Samsung, Anderson says, will retain its spot as the new global leader in mobile phones by volume, and will keep this crown despite the debut of Microsoft’s Windows Phone 7.

Meanwhile, Anderson says, Google will lose control over the Android operating system, mainly because unlicensed versions of Android will multiply in type and in installed base, especially in Asian countries. “It’s already a balkanized environment. Now Google loses control of the technology entirely. China is already running an unlicensed version of Android, and I think there will be more of that.”

Finally, the smartphone will finally emerge as the dominant category of wireless phone. “Why would you have anything else? And why would sellers of content and services want you to?” he says. “It doesn’t matter if you’re in a rich country or a poor country. This stuff is cheap.”

3. Clouds are for consumers, and for start-ups. Even as a large number of big companies move pilot projects onto external clouds, it will become clear that the real trend is for enterprise to stay away from clouds in all key areas, for reasons of both security and reliability.

“The cloud guys hate this because they want to sell to enterprises,” Anderson says. “But the security issues are becoming really intense. If you’re a CIO, it’s a terrible environment, and you’re a target, for sure, especially if you’re a company with a lot of intellectual property. I’m not implying that things like SAAS (software as a service) aren’t a big trend. But no one is going to put their valuable IP on the cloud.”

4. Security splits the tech world in two, finally getting attention from CEOs. Companies with real IP start to realize they have to “go big or go home” with their security response, and their spending on protecting their “crown jewels” rises dramatically.

5. Siri stuns the world. Siri, on Apple’s iPhone 4S, has sounded the arrival of Internet personal assistants, and the world will spend this year marveling at what Siri and its rivals can and cannot do — and what they can learn to do.

“I think we’ll see a bunch of these things,” Anderson says. “Siri will get much better. It will learn how you learn. We’ve never seen people have long-term relationships with machines before, but it will be a long-term relationship, and she will remember everything, but make good use of it. She will know you learn better by seeing than hearing, or that it takes three times to tell you something. All those things that you have to program today should be learnable. None of that has been done yet. That creates a real friendship. And I think we’re going to start seeing personal assistants not just for everyday life, but for professions like medicine or car repair. Instead of just having Siri be everything, there will be many Siris for different contexts.”

6. We enter the amazing world of Dave and HAL, as voice recognition comes of age. From hospital to car, mobile to home, Kinect to Siri, exercise to play, work to entertainment, remote control to direct action, from Microsoft to Apple, from Tellme to Nuance — the time has come for computers and humans to talk to each other. With lots of funny stories, big bloopers and amazing breakthroughs, humanity at the end of 2012 will be talking to machines in a normal voice, and it will not seem unusual, nor be the cause of unending frustration.

“The voice-recognition part is almost trivial,” Anderson says. “The important part is context-sensitive understanding. It used to be that all the researchers at Carnegie Mellon used to think that all you needed was more computing horsepower to do better at voice. It turned out that was wrong. It was right for a little while, but the real problem is context. And so, if you can build up that database where you can search it contextually for what to expect, that is where you get all the mileage.”

7. E-readers prosper, but pads continue to dominate what Anderson calls the “carry-along” market. Pads and tablets will come down in price and get closer to prices of e-readers. Meanwhile, Anderson says, Amazon’s Fire will move upmarket and evolve into a full-fledged tablet.

“If you look at the specs on the Fire, it’s a tablet, but it’s hobbled,” Anderson says. “So I think that this is part of the whole strategy: Come in and sell at a low price, and then later unveil a more complete tablet. Apple will stay ahead, though. A lot of people are asking me if Amazon will catch Apple, and the answer is no. The way it’s configured right now, there’s no way the Fire will catch up with the iPad.”

8. The consumption world explodes. Get ready for new devices, new content, new bundles, new connection techniques, new distribution channels, new aggregators, new tablets, new phones, new players, new self-published authors, new garage bands, new consumption models riding on social networks. There is nothing but high energy in the content consumer market. People are now ready to spend subscription money, and the publisher response will be huge. “It’s going to be a huge melee of stuff,” Anderson says. “We’ll invent more stuff to consume, and it will be very hard to figure out who the players are from week to week, and how they’re doing. They may not even know themselves.”

9. Governments and corporations focus on intellectual property as though it were their most prized asset. It is. This new global understanding leads to a reevaluation regarding giving critical IP away for nothing versus protecting it. The age of what Anderson calls “IP naïveté” is over, and the question of proper IP valuation is here.

What is IP naïveté? “When Jeff Immelt stood on the steps of the White House the day after he was named jobs czar, and handed the plans for GE’s most important jet-engine project to Hu Jintao in order to get the permission to be allowed to bid on maybe selling engines to China — that’s IP naïveté,” Anderson says. “Thinking that’s not going to come back and show up for sale in Houston from some Chinese company in about six months is IP naïveté.”

During 2012, he says, companies and countries will start valuing their intellectual property not for its replacement value, but for figures that are magnitudes larger. State-sponsored IP theft will shift from being considered a nuisance and more along the lines of an act of aggression.

10. Amazon gets it all. Between outdoing Wal-Mart online, to beating the booksellers and delivering groceries, and making new inroads in video streaming, Amazon will prove that one company can indeed have it all. Strong Kindle and Fire sales will only be icing on the cake.

Dubbed the Galaxy Tab 10.1N, this tablet features a much more pronounced metal border that extends further over the edges of its screen. Far enough, presumably, to distinguish its form factor from the Community Designs infringements Apple has asserted against it.

So now it looks a tad less like an iPad 2 (and a tad more like the original iPad). Question is, will that one adjustment make the design of the 10.1N distinctive enough to persuade a court that it’s no longer substantially similar to the iPad?

[Image credit: MobiFlip]

In an interview in Silicon Valley, Brad Serwin, the COO of Playdom’s social games unit, said the company has finally started to come out of hiding after being acquired for $563.2 million, plus a $200 million earn-out, more than a year ago.

One reason it took so long, according to Serwin: The general pains of integrating a small company into a larger organization.

Since the acquisition, Playdom has moved to new offices in Palo Alto, Calif., which it shares with Disney Mobile (which was formed through the acquisition of another Silicon Valley start-up, Tapulous).

Both have been learning to work with a parent company that is headquartered 350 miles away.

“A year after the acquisition, we are successfully transitioning into an operating division within Disney,” Serwin said. “We are 100 percent back to work.”

It took long enough, especially given the radical change the industry has undergone since Facebook launched its third-party application platform in May 2007. [More on how the industry has changed  in an interview today with Rick Thompson, a founder of Playdom.]

Since then, games have become the most popular applications on the platform, and have evolved from simple and inexpensive time killers to graphically rich applications.

Facebook has changed the rules, too.

This has impacted everyone in the space, not just three-year-old Playdom. Two of the biggest challenges emerged when the social network shut down its viral channels: When it became difficult to acquire new users by posting messages on users’ pages, and when Facebook implemented Credits, a virtual currency that requires developers to cut Facebook 30 percent of all revenues.

Playdom execs believe the company has finally reorganized, and are planning on making a big splash in what many worried was a dead pool.

Of the dozen titles slated for the next year, two games will come as soon as this month, and up to three games — coming in January, March and August — will leverage Disney brands.

Playdom’s next game is called Secret Agent X. For now, it is only available in beta in some international markets, but it is coming to the U.S. in the fall. In the game, a player leads a dual life as an average citizen who at night becomes a secret agent, exploring new locations and completing missions with the help of high-tech gadgets.

In the trailer for the game, seen below, a suburban housewife manages to save the world, all the while keeping her cover by making sure dinner is on the table on time.

As the seventh-largest app maker, according to AppData, Playdom falls below Zynga, Electronic Arts and even such new entrants as Germany’s Wooga.

That said, Playdom’s recent launch of Gardens of Time was considered a breakthrough hit that used game mechanics rarely seen on Facebook. The social game falls into the category of “hidden objects,” where players try to find a list of items in a room, similar to “Where’s Waldo?”

The concept behind hidden objects is not new to gaming, but it is new to Facebook, and was recently identified as a niche worth pursuing. Today, Playdom’s game is garnering nearly three million daily active users, which registers slightly below Zynga’s new Adventure World.

Playdom hopes it will prosper by bringing new concepts to social gaming and also by leveraging Disney’s big brands to catch players’ attention.

As a recent test, Playdom renamed its game GnomeTown as Disney’s GnomeTown. Serwin said the game performed much better with the new name.

Playdom’s close competitor Playfish is also relying on the intellectual property of its parent company, Electronic Arts. It has seen its Sims Social title climb the charts to become the second-most-popular game.

On the other hand, Zynga, which is the largest social games maker, has made up all of its own properties, ranging from FarmVille to its newest property, Adventure World. More recently, it has used name-brand promotions within its games to garner attention, such as Lady Gaga in FarmVille, and more recently, Enrique Iglesias in CityVille.

“Competitors have chunks of IP, but we have a lot to choose from,” said Serwin, adding that it’s not as if Playdom alone needs intellectual property: “Everyone needs IP.”

Serwin said the Playdom division’s plan is to work closely with Disney; it has hired a liaison who works in Burbank every day to make sure Playdom’s plans are on course with what Disney has in mind.

Still, Serwin can’t deny that the lull in game making has dragged down the results of Disney’s Interactive Group. Disney reported $21 million in accounting adjustment in the third quarter and $34 million in the second quarter tied to Playdom alone, and the losses are expected to continue.

In the second-quarter earnings call, President and CEO Bob Iger tried to explain its multimillion dollar charges to analysts:

“We thought it would be wise to improve the quality of the games that we’re going to release. So, we took a five-month hiatus, which had not been planned, from releasing games, to build a higher-quality game, and then also to re-stack our technical capabilities to deal with volume or to deal with scale, which we are hoping to achieve.”

Iger declined to say when the group would hit break-even, but that it was expected to get into the black by 2013.

Iger gave Gardens of Time as an example of a game that is monetizing well. “We feel good about the direction of Playdom, particularly with this new hit game in the marketplace,” he said, adding that new games in the pipeline will be based on Disney, ESPN and Marvel brands.

It has taken more than a year, but Serwin believes Playdom is ready.

“We’ve made a connection with people at Disney to get it done,” he said. “Whether it should have happened faster or slower, I don’t know, but it’s happening and it’s great.”

Delivering on a threat it made in late August, the South Korean company has countersued Apple in Australia, alleging that the company’s iPhone and iPad product lines violate seven of its wireless patents, covering everything from methods of data transmission and decoding to power management.

“Samsung has a proud history of innovation in the mobile industry,” the company said in a statement. “It has invested continuously in R&D, design and technology to produce our innovative and cutting-edge mobile devices. To defend our intellectual property, Samsung filed a cross claim for Apple’s violation of its wireless technology patents.”

The counterclaim, which argues that the patents Apple has asserted against Samsung should be invalidated and revoked by the court, comes ahead of a hearing later this month that will determine whether Samsung will be allowed to sell its Galaxy Tab 10.1 tablet in Australia.

When Hewlett-Packard coughed up $1.2 billion for Palm last spring, the acquisition was widely viewed as a quick way for the company to capture a slice of the increasingly important mobile device market.

And while the launch of the Veer and the TouchPad proved that to be true, there was another reason as well: Palm’s intellectual property.

As former HP CEO Mark Hurd explained a few months after the acquisition: “We didn’t buy Palm to be in the smartphone business … we bought it for the IP.”

So, now that HP is getting out of the smartphone business and trying to figure out just what to do with the mobile OS it was once so excited about, what’s going to happen to that IP that Hurd was so hot on?

That’s unclear. Current HP CEO Léo Apotheker said Thursday that the company is considering all its strategic options. But, given the current environment, selling off the Palm patent portfolio is surely at the top of the list.

Consider: Nortel’s portfolio of more than 6,000 wireless patents recently sold for $4.5 billion, and earlier this week Google ponied up $12.5 billion for Motorola Mobility, citing the company’s patent portfolio as a key reason for the acquisition.

With that kind of money being thrown around for wireless IP, a Palm patent sale could be an easy way for HP to “extract value from webOS,” as Apotheker said.

As a mobile computing pioneer, Palm brought a strong patent portfolio to HP (among them one that seems to describe the smartphone itself: “Integrated Handheld Computing and Telephony System and Services”).

Anthony Mazzarella, CEO of PatentVest, once said the value of Palm’s IP was “along the same order of magnitude as Apple’s.”

Indeed, when Palm and Apple were first rubbing shoulders in the smartphone space, Palm was quick to rebut Apple’s smack talking by brandishing its IP. “Palm has a long history of innovation that is reflected in our products and robust patent portfolio and we have long been recognized for our fundamental patents in the mobile space,” the company said at the time. “If faced with legal action, we are confident that we have the tools necessary to defend ourselves.”

Notably, Apple never sued Palm, despite a long-running call-and-response spat over the Pre’s iTunes syncing feature. And the company’s hesitation to take its smaller rival to court could be viewed as an acknowledgement of the potency of Palm’s patents.

That said, if Palm’s IP is truly valuable, why didn’t the company use it to squeeze licensing fees out of others when it desperately needed the money? The high costs of litigation, perhaps?

In any event, it’s certainly possible that HP could turn a profit on Palm yet, via its patents. Although it’s difficult to gauge the value of the company’s IP, it is clear that mobile patents are worth a great deal these days.

Stanford Law School Fellow Stuart Soffer estimates that the patents sold in the Nortel auction and Google’s acquisition of Motorola Mobility are worth between $736,000 and $750,000 apiece.

If Palm’s patents are as fundamental to the mobile space as the company once claimed, HP could fetch a good price from the companies slugging it out in the smartphone space right now.

What a sad fate for Palm, though — a little like gutting a broken-down historic house to salvage the pricey copper pipes.

Related posts

• Hewlett-Packard Says Goodbye to PCs, webOS
• HP Pulls Plug on webOS Hardware, Leaves OS Future in Doubt
• HP And webOS: But They Seemed So Happy Together!
• Liveblogging HP’s “Everything Including the Kitchen Sink” Conference Call
• HP’s Apotheker: We Struck Out with WebOS, but Maybe Someone Else Wants a Swing?
• Viral Video: Like Palm’s Creepy Naked Lady, TouchPad’s Floating Celeb Heads Get the HP Boot
• Licensing webOS May Not Be Much of an Option for HP
• Hewlett-Packard’s PC Business: What Happens Next?
• Worth More Dead Than Alive: Could HP Turn a Profit on Palm’s Patents?
• With HP’s Raising of the World’s Biggest White Flag, Will Jon Rubinstein and Todd Bradley Surrender Too?

That’s the gist of a blustery and bitter blog post on the mobile IP wars penned by Google’s chief legal officer, Dave Drummond, who claims that a cabal of Google rivals is conspiring to hamstring Android’s growth by buying up some of the mobile industry’s most valuable IP. From the post:

They’re doing this by banding together to acquire Novell’s old patents (the “CPTN” group including Microsoft and Apple) and Nortel’s old patents (the “Rockstar” group including Microsoft and Apple), to make sure Google didn’t get them; seeking $15 licensing fees for every Android device; attempting to make it more expensive for phone manufacturers to license Android (which we provide free of charge) than Windows Mobile; and even suing Barnes & Noble, HTC, Motorola, and Samsung. Patents were meant to encourage innovation, but lately they are being used as a weapon to stop it.

A brazen takedown, particularly for Google, which to date has been reticent to call its rivals out in this way. Clearly, the company is taking a new tack here, framing the issue in its own way and, presumably, putting whatever lobbying and legal muscle it has into throwing out roadblocks. To wit, these few lines, also taken from Drummond’s post:

We’re encouraged that the Department of Justice forced the group I mentioned earlier to license the former Novell patents on fair terms, and that it’s looking into whether Microsoft and Apple acquired the Nortel patents for anti-competitive means.

I bet you are. Particularly since you’re facing antitrust inquiries into your own core businesses. And in the end, that may be another purpose of this post: To show regulators that Google isn’t always the unstoppable juggernaut it is portrayed to be. Sometimes it’s the victim, or it would like to be viewed that way, especially by the FTC and the tough-talking judge presiding over its patent infringement showdown with Oracle.

One last point: If the patents to which Google refers are “bogus,” why bother decrying them at all? Or, for that matter, bidding $Pi billion dollars for them in the first place?

Now it seems the networking giant Cisco Systems has appropriated it to mean something else entirely, something a lot more meaningful in the larger context of the Internet. The way Cisco sees it, the number of devices connected to the Internet exceeded the number of people populating the entire planet. And that’s not just smartphones and tablets. It’s sensors tracking the health of cattle, and medical devices monitoring the health of cardiac patients and so on. And eventually, rather than always interacting with humans, they’ll be interacting with each other automatically, updating our daily schedules. Other examples include the machine-to-machine-type devices that outfits like Iridium, the satellite data firm, is finding so lucrative.

Of course, Cisco would like you to associate its brand with these kinds of big thoughts rather than its more workaday corporate troubles. It did something in the same vein last month when it unveiled its annual Visual Networking Index forecast which measures and predicts the size of the entire Internet. But before Cisco does its part to build this incredible network it’s talking about, it’s going to have to get its own corporate ship in order — and as everyone now knows, that’s going to mean layoffs. But who cares about that when there’s this utopian future just ahead?

Getting to that utopia will also require completing the transition from IPv4 to IPv6. You did know that the pool of old-style Internet address is more or less exhausted, right? Right. So when the Gods of the Internet get their act together and move completely to IPv6, there will be more Internet addresses available than there are atoms on the planet Earth. Don’t ask how many that is, but its a really big number. Okay, go ahead and ask: 340 sextillion. That’s a 340 followed by 36 zeros.

Anyhow, the fine folks at Cisco have whipped all this big thinking into an easy-to-understand graphic which they’ve kindly shared with me. Have a look below. The other image, (since we’re talking about big things) is a map of the known universe, courtesy of The Harvard Smithsonian Center for Astrophysics. Sometimes it just pays to keep things in perspective.

Over the weekend, the group issued a call for prior art invalidating two Apple patents — #7,743,336, which describes a widget security system, and application #20070101146, which covers “safe distribution and use of content.”

The W3C had hoped Apple would grant it a royalty-free license for that IP so it could be included in its Widget Access Request Policy specification for Web apps, but evidently Cupertino is reticent to do so. This is problematic for the W3C, because the Apple patents at issue here are essential to that specification. According to W3C rules, standards must be royalty-free and unencumbered by patents.

In other words, it can’t adopt the Widget Access Request Policy specification unless Apple gives up some of its rights to those patents. And at this point, the company has no plans to do so. It’s not entirely clear why, but presumably Apple feels they’ll come in handy at some point in the future, perhaps in litigating some current or future lawsuits.

So the W3C really has no other recourse than to attempt to invalidate Apple’s IP or give up on the standard entirely. Said intellectual property activist Florian Mueller, “In this case, the W3C hopes to do away with Apple’s relevant patent and patent application. It’s an unpleasant situation for the W3C to have to confront one of its members, especially such a large and powerful one, but sometimes this can’t be avoided.”

Today the company is announcing Bobsled, a free Facebook application that lets users make PC calls to their social network friends. And people don’t need to be T-Mobile cell phone customers to download or use Bobsled, which integrates with Facebook’s chat application.

“T-Mobile’s focus is to innovate to provide simple and affordable communications for customers, enabling people to stay connected wherever they are,” Senior VP Brad Duea said in a statement. “Bobsled by T-Mobile takes our communications services innovation to a whole new dimension, bringing simple and cost-effective connections to more than half a billion people overnight, allowing people on Facebook to more easily connect and giving voice to social networking.”

The initial release of Bobsled lets users call their Facebook friends as well as post voice messages on the walls of their buddies.

T-Mobile promised more to come, including video chat as well as calls to mobile and landline numbers. “Our new Bobsled brand will evolve in the coming months to provide even more ways for people to connect, no matter what platform, device or mobile provider they are using,” Duea said.

It will be interesting to see what AT&T does with Bobsled when and if its deal to buy T-Mobile USA goes through.

In its traditional business, T-Mobile USA plans on Wednesday to start selling the Sidekick 4G, G2x phone and G-Slate tablet.

The move marks Intel’s vote of confidence in the post-Mubarak Egypt, in the earliest days of establishing a new political, cultural and economic identity. In addition, as one of the worlds leading global technology players, Intel has embraced the growing quality of innovation and engineering talent in their first acquisition in the Arab world. Dr. Christian Mucke, Vice President of Intel Mobile Communications, notes that “Egypt has a young, growing talent pool across multiple specializations, including the field of engineering, and we remain committed to Egypt as a strategic market.”

SySDSoft’s CEO and founder Dr. Khaled Ismail is a classic start-up story. Having received his PhD from MIT and the highest recognition from leading engineering institutions, Ismail founded his company out of passion and necessity. When the U.S. company for whom he built the Cairo operations failed to survive the bubble burst of 2001, he saw significant market and talent opportunity in region. Starting with two employees, he reflects on those early days, “It was not very difficult as I was blessed with a great team. My main challenge was always to find new customers abroad, who were willing to trust an Egyptian company to deliver top-notch technical work for them.” Find them he did, and as his operations grew to nearly 100 engineers, SySDSoft quickly moved from offering engineering design services to developing its own IP in the 4G telecom world. SySDSoft was named the first Endeavor High Impact Entrepreneurial Company in the Middle East in 2007.

Ismail has been active in fostering and mentoring young Egyptian entrepreneurs in technology and telecom. Between his success at SySDSoft, sitting on the board of Orascom–the largest telecom operator in the Middle East–and actively advising government and business leaders in how best to incubate new tech ideas, he is optimistic for the new generation following in his footsteps. “What will change,” he hopes, “is that young entrepreneurs may have more guts now to take the risk and hope for a good upside in case they are successful. After Jan 25, 2011, in fact, I am much more optimistic, since the overall environment is very crucial, and we hope that the change that has happened will entice a lot of young Egyptians to have a dream, take the risk, but have the patience to not simply chase quick profit.”

SySDSoft had received two offers to sell in recent years, but now, with the exponential growth in mobile services and pressure on time to market, the time was ripe to harvest opportunities in consolidation. Ismail notes, “During the past six months, there have been so many acquisitions in the domain or wireless technologies more broadly. We witnessed most of our small- to medium-size customers being acquired by big companies during that phase, which indicated that big consolidations are happening.” When Intel bought one of the leading wireless companies last August, Infineon Wireless, it also acquired one of SySDSoft’s most important customers. Ismail concluded, “We had an excellent working relationship with them. Also, Intel is one of the most advanced technology companies in the world that would allow our product, which we believe is best of its class in the world, to reach the hands of hundreds of millions very soon. Our IP is a part of their road map, and as our business is not capital intensive, we represent far less risk than other industries.”

Mucke agrees: “SySDSoft designs software IP solutions and RF/analog circuits embedded in mobile platforms and enhances Intel Mobile Communications’ existing multi-communications portfolio, specifically accelerating its 4G LTE efforts.”

Ismail will remain with Intel as the head of Intel Mobile Communication Egypt. “I have currently no other plans but to make it one of the most successful teams with Intel worldwide, and to win the 4G chipset battle such that an Egyptian product will be in the hands of more than a billion users within five years from now.”

Intel is sizing up the best approaches in Egypt and the region overall. “Intel remains committed to the Egyptian market and the region has a young, growing talent pool,” Mucke explains. “We are currently in the process of evaluating the market and the financial impact to Intel as a result of the Egypt revolution, and are working with the ecosystem on identifying how Intel can help rebuild and restructure the Egyptian PC market.”

Christopher M. Schroeder is a Washington, DC-based angel investor in U.S. companies and CEO of the leading collection of condition-specific, social health web sites at healthcentral.com. He recently returned from Cairo, Damascus and Dubai, examining the region’s start-up community, and was a delegate in the State Department Global Entrepreneurship Program as a judge for Egypt’s new venture business plan competition. He can be followed at @cmschroed.

Note that the Daily’s first TV commercial, launched during the Super Bowl tonight, never mentions the word “Apple” or “iPad” once–even though it certainly appears to be using an iPad to show off the publication.

During the Daily’s press launch last week, News Corp. CEO Rupert Murdoch was clear that the Daily would eventually make its way to other platforms–Google’s Android, obviously–but said something along the lines of “the iPad is going to be the dominant platform for us for a while.” (News Corp. also owns this Web site).

Here’s Engadget’s on-the-fly transcript of Murdoch’s comments: “We’ve been quite honest with Apple, and we’ll be on all major tablets. But we think last year, this year, and next year will belong to the iPad.”

So if that’s the case, why wouldn’t News Corp. use the name of one of the world’s most popular companies, and/or one of its most popular products, to add a halo to its own product launch?

It’d be fun to speculate–Did Apple not give permission? Did News Corp. not want to scare off consumers dead set on a Xoom? Some other issue? But there are a couple of minutes left in the game, and I want to get back to it before it ends. Perhaps someone from the Daily can explain tomorrow.

Last year, Nortel sold its optical networking and carrier ethernet business to Ciena for $769 million and its wireless business to Ericsson for $1.3 billion. Soon it will sell off its patents as well, among them some thought to be essential 4G wireless technologies like Long Term Evolution (LTE) and Service Architecture Evolution (SAE).

And that IP is drawing a lot of interest from the likes of Research in Motion, Nokia, Google and Apple, none of which want to see it in the hands of a rival, particularly as 4G’s commercial availability broadens. Sources tell me all four companies are participating in the auction, and Reuters reports that final bids are due in a matter of weeks. Said one source, “Whoever buys these patents is buying a hell of an advantage.”

Reached for comment, Apple and RIM declined. Google and Nokia did not respond.

Redmond argues that Motorola is contractually bound by agreements with the Institute of Electrical and Electronics Engineers (IEEE) and the International Telecommunications Union (ITU) to license the IP at issue here under “reasonable and non-discriminatory terms and conditions,” but hasn’t done so, opting instead to squeeze it for allegedly inflated sums. Said a Microsoft spokesperson, “[These] commitments are designed to benefit all parties that rely upon these standards, and Microsoft has been harmed by Motorola’s failure to honor them in recent demand letters seeking royalties from Microsoft.”

Ellison is scheduled to take the stand in his company’s ongoing legal battle with SAP today, and if his testimony is anything like the press releases and letters to the editor he’s been broadcasting about the case the past few months, the software firm’s ears will bleed before he’s through. Unless its legal team somehow manages to keep him from turning the witness stand into a bully pulpit, a difficult task given Ellison’s mercurial manner and “Art of War”-style tactical thinking.

Handling Ellison’s direct examination is David Boies, Oracle’s lead litigator in the case.

PREVIOUSLY:

• Oracle Lands Early Shots in SAP Trial
• Your Honor, We Object to Mr. Ellison’s Repeated Use of the Term “Slimy Weasels”
• Oracle to HP CEO: Chicken!
• Oracle Vs. SAP: We Got a Right to Pick a Little Fight–Bonanza!
• SAP’s Tab in Oracle Case: $120 Million and Counting
• Gag Order Denied in Oracle, SAP Trial
• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

Testifying in an Oakland, Calif., courtroom Thursday, Phillips–who once managed marketing and large-customer relations at Oracle–said his former employer would have charged SAP billions of dollars for a license to use the IP that its TomorrowNow subsidiary illegally downloaded. For something like that, Phillips said, you “would ask for $3 billion or $4 billion and you’d want it up front.”

A nasty blow for SAP, which contends it owes Oracle only $40 million. And only the first of several struck yesterday.

In a videotaped deposition shown to jurors, former SAP executive board member Shai Agassi testified that SAP acquired TomorrowNow in the hopes of taking maintenance revenues away from Oracle. Worse, he said the company was well aware of the risk that Oracle would sue over the acquisition. “There’s always a chance Oracle could sue,” he said. “Oracle would sue if we dripped sandwich sauce on its lawn.”

Or, as former TomorrowNow developer John Ritchie testified, if it discovered a Web scraper sucking copyrighted materials off its support Web site and “hammering their servers so hard…it was like a denial of service attack.”

Another ugly blow. And then there was this from Agassi, who, in remarks that must have had Hewlett-Packard’s board of directors scrambling for the Mylanta, fingered current HP CEO and former SAP chief Léo Apotheker as one of two executives charged with overseeing TomorrowNow after SAP acquired the company. “I was the guy who led the evaluation together with Werner Brandt,” Agassi said. “[On] the day of the acquisition it was basically moved to [board member] Gerhard Oswald and the sales effort for it was moved over to Apotheker.”

Damaging stuff, anyway you look at it–though this is just one side of the case. Oracle has clearly thrown and landed some roundhouse punches so far, but SAP will have its chance to counter them and throw a few of its own in due time.

Question is, will it still be standing when that time finally comes.

PREVIOUSLY:

• Your Honor, We Object to Mr. Ellison’s Repeated Use of the Term “Slimy Weasels”
• Oracle to HP CEO: Chicken!
• Oracle Vs. SAP: We Got a Right to Pick a Little Fight–Bonanza!
• SAP’s Tab in Oracle Case: $120 Million and Counting
• Gag Order Denied in Oracle, SAP Trial
• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

Before that, the jury will hear testimony from former Oracle co-President Charles Phillips and the deposition of former SAP chief and newly appointed Hewlett-Packard CEO Léo Apotheker, who has so far dodged Oracle’s efforts to subpoena him.

Speaking of Apotheker, sources tell me that Oracle is pretty much convinced he isn’t even in the country. “Larry predicted they’d keep him far away from HP headquarters, and that seems to be exactly what they’re doing,” one told me, adding, “It’s not like Oracle hasn’t put some effort into finding him.”

Keeping Apotheker out of Oracle’s reach is likely a wise move. It’s clear that beyond squeezing all the copyright damages it can out of SAP, Oracle’s goal in this trial is to embarrass HP for hiring him. Putting him on the stand after Ellison would just be silliness anyway–like watching someone trying to play a set of Volksmusik after the “Live at Leeds”-era Who have just left the stage strewn with broken drum heads and guitar shards.

PREVIOUSLY:

• Oracle to HP CEO: Chicken!
• Oracle Vs. SAP: We Got a Right to Pick a Little Fight–Bonanza!
• SAP’s Tab in Oracle Case: $120 Million and Counting
• Gag Order Denied in Oracle, SAP Trial
• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

Oracle, in its opening argument, slagged SAP as a sinister and scheming rival, claiming the company’s leadership knew it was taking a risk by buying TomorrowNow, which was found to have infringed Oracle’s intellectual property. “SAP could have chosen to compete fairly,” Oracle attorney Geoffrey Howard said. “Instead it chose to buy TomorrowNow, a company that the board of directors at SAP knew was competing unfairly. It did that because it expected to make enormous amounts of money and inflict enormous amounts of harm on Oracle by using its intellectual property.”

And SAP, in its opening argument, derided Oracle as a company deluded by its own avarice into seeking a ridiculously inflated damages award. Oracle wants “a windfall,” SAP attorney Bob Mittelstaedt told the jury. “They want a bonanza that is out of all proportion to the harm they suffered.”

According to Mittelstaedt, SAP should have to pay only for the software sales Oracle lost as a result of TomorrowNow’s malfeasance, and those number less than 500.

And that’s the point of contention around which this case will orbit. Because Oracle claims that SAP, with its acquisition of TomorrowNow, was looking for a bonanza of its own and just didn’t get it.

Memos presented by Howard on Tuesday show that SAP estimated its acquisition of TomorrowNow would disrupt Oracle’s applications business enough to cause a 10 percent decline in the company’s share price, trimming about $7 billion off its market cap.

In other words, the intent was there; the execution was just lacking. Just because SAP didn’t benefit significantly from TomorrowNow’s improper downloads of Oracle software and documentation doesn’t make those downloads any less improper.

PREVIOUSLY:

• SAP’s Tab in Oracle Case: $120 Million and Counting
• Gag Order Denied in Oracle, SAP Trial
• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

Under an agreement filed Monday, SAP said it is willing to pay Oracle for “past and future reasonable attorneys fees and costs” as part of a deal in which TomorrowNow would stipulate “to entry of judgment on Oracle’s claims for violations of the Federal Computer Fraud and Abuse Act and California’s Computer Data Access and Fraud Act, breach of contract, intentional interference, negligent interference, unfair competition, trespass to chattels, unjust enrichment/restitution and an accounting.” In exchange for the admission, Oracle would not seek additional punitive damages. The joint stipulation would need judicial approval.

Still, the real damages here are those related to copyright infringement. So while ducking punitive damages will certainly reduce SAP’s ultimate bill, it’s not likely to bring it that much closer to the “tens of millions” it contends Oracle is legitimately owed. Indeed, Oracle still has its sights firmly set on that $2 billion figure, which to be clear is copyright only. In opening arguments today, Oracle attorney Geoffrey Howard said the company will produce evidence to show SAP “expected the benefit to them and the harm to Oracle to be in the billions of dollars.”

PREVIOUSLY:

• Gag Order Denied in Oracle, SAP Trial
• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

[Image credit: Pre-Ellison Samurai image by Artem Mirolevioch]

Apotheker’s first day as CEO of HP, Nov. 1, is also the first day of the trial. And he’s on Oracle’s witness list.

But if he’s called, will he show up?

Oracle’s not sure he will, but it wants everyone to know that it has big plans for him in the courtroom, whether he does or not.

In a statement Tuesday night, Oracle CEO Larry Ellison essentially dared Apotheker to appear on the witness stand, suggesting that HP’s newly appointed Chairman, Raymond Lane–a former Oracle president–might try to keep him from testifying.

“A few weeks ago I accused HP’s new CEO, Leo Apotheker, of overseeing an industrial espionage scheme centering on the repeated theft of massive amounts of Oracle’s software. A major portion of this theft occurred while Mr. Apotheker was CEO of SAP,” Ellison said in a statement.

“HP’s Chairman, Ray Lane, immediately came to Mr. Apotheker’s defense by writing a letter stating, ‘Oracle has been litigating this case for years and has never offered any evidence that Mr. Apotheker was involved.’ Well, that’s what we are planning to do during the trial that starts next Monday. Unless, Mr. Lane and the rest of the HP Board of Directors decide to keep their new CEO far, far away from HP Headquarters until that trial is over. If HP keeps Leo Apotheker far from HP headquarters we cannot subpoena him to testify at that trial.”

Which is true–as a foreign national, Apotheker is under no legal obligation to appear at the trial if called to testify (his name has been on Oracle’s witness list since August 5, 2010–see image below). But given the recent war of words between Oracle and HP over his hiring, it would be odd for him not to, particularly if, as HP claims, he wasn’t involved in the IP theft at the center of Oracle’s suit.

That said, it seems HP is already setting the stage for Apotheker to be a no-show.

“Oracle had ample opportunity to question Leo during his sworn deposition in October 2008,” the company said in a statement. “Given Leo’s limited knowledge of and role in the matter, Oracle’s last-minute effort to require him to appear live at trial is no more than an effort to harass him and interfere with his duties and responsibilities as HP’s CEO.”

One last thing: If you missed the reference in the headline of this post, here’s your explanation: