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.

The FlipStart is part of a new wave of tiny Windows PCs, which include the second version of a machine called the OQO, the Ultra-Mobile PC from Samsung and Sony’s UX series. For a decade or more, the computer industry has been trying to come up with an ultracompact computer that can use standard operating systems and software. They have failed to catch on broadly for several reasons.

First, they are an awkward, in-between size: too large to fit in a pocket, but too small to allow for minimally comfortable touch-typing keyboards. Second, their screens are often too small to handle the navigation through multiple windows that Windows requires. Third, their battery life has been poor. Finally, they’ve been very costly.

I’ve been testing the FlipStart and found that while it overcomes some of these issues, it can’t lick all of them. It runs Windows OK and it even has decent battery life. Its screen resolution and navigation are also pretty good. It weighs just 1.75 pounds, and is smaller in length and width than a standard paperback novel.

But its price, $2,000, is very expensive for a computer that’s too small to be very good for typing, yet isn’t small enough to be extra portable. Part of the size problem is that it’s thick — thicker than a 400-page paperback. And I found its keyboard to be too little and crude for laptop-style typing, but too wide for fast thumb typing, like people do on a BlackBerry. It also exhibited some funky behavior in my tests.

So, like its predecessors and competitors, the FlipStart is likely to be a novelty or niche product. It may be popular with some techies, but it’s no match for a small standard laptop, like Lenovo’s X models, which start at $1,250, are 2.7 pounds, are thinner than the FlipStart, and include a great keyboard and a screen that’s more than twice the size of FlipStart’s.

The FlipStart, which goes on sale March 27 on the company’s Web site, flipstart.com, is also much larger and heavier than the new second model of the OQO, which weighs just one pound. The new OQO, on sale next week at oqo.com, is also less costly, starting at around $1,500. Like the OQO, the FlipStart can also run the new Windows Vista, as well as Windows XP.

The FlipStart is designed as a clamshell, with a flip-up lid, like a laptop. It can be used in an L-shape, like a laptop, on a desk or table. The OQO’s keyboard slides down from behind its screen and you type on it while holding it vertically, like a smart phone. The FlipStart can be used that way, too.

The FlipStart’s 5.6-inch screen is bright and vivid, and it has a resolution of 1,024 by 600, less than most laptops, but much better than the new OQO’s. There’s a zoom feature that can be adjusted with a handy scroll wheel on the side, which is also used for scrolling through text.

There’s also a second, tiny screen in the lid, so you can see your email, contacts and calendar when the FlipStart is closed. Special navigation software on the main screen offers the same information.

In my tests, the FlipStart handled Microsoft Word, the Firefox Web browser, Picasa photo software and Apple’s iTunes quite well.

In my tough battery test, in which I turn off all power-saving software, turn on the Wi-Fi, crank up the screen brightness and play music endlessly, the FlipStart did surprisingly well. It clocked in at about 2.5 hours, which means you’d get three hours or more with typical usage. The slimmer, lighter new OQO got just 1 hour, 48 minutes.

The FlipStart includes both Wi-Fi wireless networking and a built-in cellphone modem that uses the fast EV-DO network. Both worked in my tests, as did wired networking via a snap-on port replicator that lets you connect a full-size monitor, keyboard, mouse and speakers.

But I ran into some problems. The unit too often failed to connect to Wi-Fi networks. Also, at one point, the FlipStart logged me out of Windows every time I typed the letter “L” in any program. Microsoft Outlook crashed on me repeatedly.

The keyboard, despite its typing flaws, has some nice aspects. It includes a touch pad and a pointing stick, to replace a mouse, and special keys for quickly performing various functions, such as getting to the desktop and switching open windows. But for thumb typing, I much preferred the OQO keyboard, even though it’s smaller and even though FlipStart commissioned a study showing its keyboard was better.

I think the solution to making better hand-held computers is in ever-more-potent smart phones, like Apple’s forthcoming iPhone, rather than in shrunken laptops like the FlipStart.

• Email me at mossberg@wsj.com. See video versions of my reviews at wsj.com/mossbergvideo.

]]> http://allthingsd.com/20070315/flipstart-pc-snags/feed/ 0 http://allthingsd.com/20060504/ultra-mobile-pc-misses-the-mark/ http://allthingsd.com/20060504/ultra-mobile-pc-misses-the-mark/#comments Thu, 04 May 2006 23:59:00 +0000 Walter S. Mossberg http://ptech.allthingsd.com/20060504/ultra-mobile-pc-misses-the-mark/ In the boring world of me-too personal computers, only a few companies are frequently bold enough to try something really new.

Apple and Sony are the usual suspects. Microsoft and Intel, which dominate the industry, rarely make the list of design risk-takers. So the latter two leaders deserve credit for cooking up a whole new type of Windows computer — a machine that’s smaller than the smallest mainstream laptop — the Ultra Mobile PC, or UMPC. The first UMPC for the U.S. market, the Samsung Q1, goes on sale next week at Best Buy’s Web site.

The idea behind the UMPC is that it’s so small, yet so full-featured, it can replace a laptop. It’s meant to fit in places a laptop won’t, or simply to be held in your hands. It is also supposed to be a cool multimedia device for watching video or listening to music.

Unfortunately, the Samsung Q1 is so deeply flawed in key respects that it amounts to little more than a toy for techies. For everyone else, it’s impractical and frustrating. Unless the UMPC can evolve significantly beyond this first effort, it may wind up as a footnote in the history of personal computers, rather than an exciting new category.

The Q1 is sleek and attractive. It’s about the size of a hardcover book, only narrower, and is clad in shiny black plastic with silver accents. Most of the unit is occupied by a wide-angle color touch screen that measures 7 inches diagonally. Overall, it’s about 9 inches long, 5.5 inches wide and just under an inch thick. It weighs a scant 1.7 pounds.

Inside, the little machine runs a full version of the Tablet edition of Windows XP. In fact, the UMPC, which Microsoft had code-named Origami, is really just a small Tablet PC. That’s a good thing, because many of the Tablets shipped so far have been too big and bulky to use comfortably as electronic notepads or document readers, which are the main functions of tablet computers.

The Q1 uses a slow, low-end Intel processor, a Celeron running at 900 megahertz. But it was adequate for the common tasks I tested — Web surfing, email, playback of audio and video files. There’s also a 40 gigabyte hard disk, 512 megabytes of memory, Wi-Fi and Bluetooth wireless networking, an Ethernet port, two USB ports and a slot for Compact Flash memory cards.

There’s no embedded cellphone modem and no slot for adding an external one. The Q1 also lacks an internal DVD drive. An external drive can be added for $219, but it’s an extra piece to carry and plug in.

You operate the Q1 like a PDA — by manipulating icons on the screen and writing on the screen using either a simple plastic stylus or your fingers. It lacks a built-in keyboard and doesn’t come with a mouse.

In my tests, the Wi-Fi and wired networking worked well and were fast. All the applications I tried launched fine and worked fine. Video clips looked pretty good on the screen, and the stereo speakers, though small, did a decent job.

So what are the Q1′s big flaws? The first is price. Microsoft’s designers set a target retail price of $500, but Samsung is charging more than double that amount — $1,099. That’s more than many laptops cost, and much more than PDAs or smart phones. In fairness, the lightest laptops tend to cost more — $1,500 to $2,500. But $1,099 is still a lot for a UMPC.

The second is battery life. In my harsh battery test, the Q1 lasted just two hours and two minutes. That means that, in normal use, it might approach three hours, if you’re lucky. You can buy a larger battery for $119, but it adds bulk to the computer and nudges the weight up to two pounds, almost as heavy as the lightest standard laptops.

The third is the lack of a keyboard. Without a keyboard, many standard tasks in Windows are simply a huge hassle. You can’t really do word processing at speeds most people are used to. And email is a constant frustration. Yes, the Q1 has handwriting recognition, but it’s cumbersome. And there’s a semicircular onscreen keyboard, but it takes work to use it well.

Most Tablet PCs include a keyboard. Even the tiny OQO computer has a keyboard, as do Treos and BlackBerrys. How come the combined brains at Microsoft, Intel and Samsung couldn’t build one into the Q1? You can plug in an external keyboard, but that makes the machine ungainly.

The fourth big flaw is the screen. Its resolution is too low to see much material at a glance. Often, you can’t even see the OK button at the bottom of open Windows. There is a way to increase the resolution, but it results in distorted graphics and fuzzy text.

Finally, the navigation buttons and controls on the Q1 are awful. There’s a control that moves the cursor, and another that acts like a Return key. But there are no direct equivalents of the left and right mouse buttons. To emulate a mouse button, you have to hold down two of the Q1 buttons simultaneously.

My advice is to skip the Q1, and hope that the next generation of the UMPC will be better.

• Email me at mossberg@wsj.com.

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