Innovation in Business Models: AxisPointe's SmartBuilder Suite for Home Builders

Innovation in business models is often more important than innovation in materials and products. After all, the key to disruptive innovation typically is the business model in which a product or service is deployed, rather than in the physical product itself. So it pays to keep your eyes open to clever new business models to understand what can be done and what might be applied to other areas.

As an example of an innovative business model, take a look at the services provides by AxisPointe, a company based in Utah's innovation corridor (a rising entrepreneurial region extending from Salt Lake City to Utah County in the south). AxisPointe's HomeBuilder Suite helps home builders and contractors by simplifying many of the post-construction service and support issues they face, including walkthroughs, inspections, troubleshooting, repairs, maintenance, etc. A central source is provided that brings together various providers, manages interactions, documents calls and responses, and makes life simpler for both the homeowner and the builder. A nice combination of software tools, support personnel, and contractural arrangements bring it together into a business model that offers convenience, ease of use, and cost savings. Could be a huge competitive advantage for those who use it.

If you've had experience with AxisPointe's services, I'd love to hear from you. Would like to see how this fares in this difficult economic time for the housing market.

Why Publications?

I'm surprised at how few of the nation's leading companies aggressively use defensive publications to strengthen their intellectual asset portfolios. One major company I talked with recently told me that when they have a concept that they think should be published, they will write it up as a patent and file it with the PTO - paying big bucks to get a publication on file. Not to mention raising questions about knowingly filing something they don't think is really an invention. Doesn't sound wise at all! When I talk about the aggressive publication efforts I spearheaded at Kimberly-Clark, I get a lot of surprised looks. "Oh, we didn't think of that." "Didn't know you could do that so easily." "Hey, that really makes sense." But very few say anything like, "Right - we've been doing the same."

HP and IBM are vigorous publishers, to their credit. But much of the world really doesn't grasp how powerful publications can be. So why publish?

For one thing, defensive publications that create prior art can protect or even increase the value of your existing patents and applications. They can do this by disclosing numerous potential improvements to reduce the risk that others will get improvement patents on top of your estate. That strengthens your future patent clearance position ("freedom to operate" or "right to practice" are terms that others use). It also reduces the risk that a potential licensee will have to get lots of additional licenses from others to practice the art, thus preserving value in future licensing activity.

Publications can also be used to gain credibility for test methods or other tools that may be useful in your patents.

Publications may be used to reduce the value of competitive investments in certain technology areas, for you may be able to create prior art that reduces the potential patent territory that others can obtain in the future.

Publications can also confuse and distract competitors, as they struggle to understand if a publication from you reflects a serious investment in an area or is related to pending patent activity. To do this well, some of your publications should be based on actual patents you have filed, and others should look as if they are. And some should be anonymous but readily identifiable as your work, while others should disclose your identity.

There are several other things you can do with publications that we may discuss here later.

Where to publish? One venue that I strongly recommend is IP.com. This company has its origins in IBM's aggressive publication efforts, providing an opportunity for others to quickly and inexpensively publish a document that can be electronically searched by the PTO, and that is time stamped and archived with certain proof of its publication date, unlike most resources on the Web. Costs are low and ease of use is very high. It's one of the best ways to get prior art out there.

One of my publications at IP.com was recently cited by a PTO examiner against a case by IBM. Interesting! The PTO is increasingly using this resource.

If you want a holistic, broad approach to intellectual assets, you've got to do more than just file patents. At a minimum, you need to strengthen the patents you are seeking with additional publications. And there is much more you can do with that tool - just one of many tools beyond patents that must be part of a robust intellectual asset strategy.

Innovative Approach for Image Handling

An amazing new technology for resizing images without distortion of important features is presented in a video at TechCrunch.com. By calculating low energy regions in a photo, pixels can be added or removed in those regions without distorting key features of a photo as it is resized. Brilliant!

Now think about how this technology could be deployed disruptively. As an image processing program, incumbents will be motivated to respond head-on. That's their business and expertise. But what about subtle applications in other areas, such as enhancing the display of Google Ads, improving the display of graphics on signs or VR displays, or providing dynamic displays on electric paper? What business models would allow this technology to provide a disruptive competitive advantage? Food for thought. Correct answers will be given in four or five years.

The Problem with Copper and Bird Droppings: Don't Doom Your Innovation Pipeline

Building an innovation pipeline? Great! But before you complete your system, there's a lesson to be learned from a real-world failure of copper pipes discussed in a recent edition of Design News. I refer to "The Case of the Oleaginous Inlet" by Kenneth Russell, Professor Emeritus, MIT, Cambridge, MA (July 16, 2007, p. 118). Here's the problem he faced:

Oils become viscous and hard to pump at low temperatures. In the case at hand, refined mineral oil was being stored in a large tank equipped with a heat exchanger to keep the stuff pumpable. Fairly low temperature steam circulated through an array of ¾-inch copper tubes immersed in the oil and then discharged into a dry well. Several of the tubes broke, which allowed the mineral oil to leak into the dry well and the surrounding ground and finally into Mount Hope (RI) Bay. Local environmentalists and waterfront residents were not pleased by the leak.

I was retained by the operator of the tank to find the cause of the piping fracture. My client, of course, hoped to be exonerated.

The tubing was just plain copper that, for some reason, had broken after only two years of service. Neither refined mineral oil nor clean steam attack copper, so the cause of failure was a mystery.

Scanning electron microscope images of the pipes suggested that the problem was corrosive attack on the outside surfaces of the pipe. This was puzzling because copper is usually inert and does not corrode easily. But ammonia can attack it, and ammonia from bird droppings, dog urine, or other animal sources could have been the cause.

In this case, it appeared that some source of ammonia (bird droppings from above, perhaps) had landed on the copper tubes while they had been in storage, causing weakening of the metal that later resulted in failure of the pipe in use, under cycles of internal pressure and change in temperature.

When it comes to innovation, even a seemingly robust pipelines can actually be surprisingly sensitive to certain waste products from above. Failure to properly shield innovation connections and pipelines can result in an environment where the pipeline can crack under pressure and fail.

Innovation pipelines - the people and processes behind innovation - need to be treated carefully in order to realize the full returns possible on those investments. Special rules, managerial sponsorship and protection, environments where involvement and creativity is encouraged and expected, and other steps can keep those pipelines healthy and functioning for years to come. But if soiled with normal corporate contamination and fall-out, connections can fail and pipelines can quickly become empty and even sources of extreme waste.

Intellectual Asset Help a la Carte? Forget It!

Back when you didn't know the ins and outs of restaurants, do you ever remember watching plates full of good food being delivered to nearby patrons as you anxiously waited for your order? When it came, perhaps there was just a lonely pork chop on an otherwise empty plate. What, just a pork chop? That's my dinner? And the waiter answered: "I'm sorry. Our meals are a la carte." Order a chop - get a chop. Nothing more. Disappointing! For many of us, the dining experience is incomplete without all the extras. Leave them out and the sizzle is gone.

The side dishes are one reason why Korean restaurants are among my favorites. The meal inevitably includes a spread of numerous side dishes to sample with the main course. Even when I order something inexpensive, the sides are there to make the meal exciting.

I think the same concept applies to consulting firms serving clients, whether it involves intellectual assets, business plans, or any other field. A satisfying experience should include extras to create customer delight.

• Someone wants help with a couple patents? Give them more! Help them consider the digital intellectual assets as well. Look at their portfolio and suggest some trademarks, domain names, even YouTube channels that could help them. In fact, if they like the suggestions, take five minutes during lunch and help them register the domain names on the spot. (Pet peeve: many people wait for months or even years before thinking about the marketing aspects of an invention, sometimes missing opportunities to obtain domain names and other low-cost assets that may have been available earlier. Don't put this off!)


• Someone looking for help in getting a great invention to market? Don't just help with the marketing strategy -- show them how they can use this invention as the first in a series of related products that can lead to a robust pipeline.


• Someone wants help with training their people on the basics of patents? Don't just help them with the training - show them how they can build a community of practice in their company to naturally grow expertise in intellectual assets across their company. A self-sustaining community of practice in intellectual assets is one of the most important things some companies can do for their IA systems - and was one of the most important things that I helped bring to Kimberly-Clark during my years there (with the assistance and support of our Chief Innovation Officer, Cheryl Perkins, who is now the owner of Innovation Edge, the exciting firm where I work now as Director of Solutions Development).

In one recent meeting with a client, we noted that their position potentially could be broader than the concept they were focused on. In fact, we offered a suggested trademark to cover a broader scope. It took five minutes to do the search and see that it might be available. It took another 60 seconds to see if the domain name was available - and it was. We even interrupted our meeting to guide them through the simple domain name registration process and secure the domain name for them on the spot. A nice side dish that added a lot of enjoyment for the client. A la carte services? Forget it! Make sure the side dishes are included.

The Patent Wiki: Peer to Patent

At an IP conference in New York, I recently met Professor Beth Noveck, the brilliant law professor at New York Law School who has been the driving force behind the new Peer to Patent Project and PeerToPatent.org. The concept is to apply the power of the Wiki and communities of experts to help the PTO do its job of finding prior art for pending patent applications. In this program, inventors with pending applications in category 2100 (software-related patents) can volunteer to expose their application to the online community, who will then dig up the best art they can find and provide comments explaining the relevance of the art. The top 10 items of prior art and comments will be sent to the PTO to assist the Examiner.

Why would anyone want to do this? That's the reaction of most IP professionals. Naturally, this process greatly increases the chances that a patent will be gutted by prior art or whittled down to narrow claims. "Even an invalid patent is worth something" - a common statement that refers to the huge expense and risk involved in challenging a patent that stands in your way. But for those interested in having strong valid patents that they intend to license or otherwise use, this system can greatly increase the perceived value of the patent, if it's a good patent in the first place. And it can give the inventors of the surviving patent confidence in their claims.

There is another huge benefit for those who out their patents through the Peer to Patent process: the PTO will expedite prosecution, trimming the normal five+ of prosecution for software patents down to roughly a year. That's for me!

In fact, I have a patent application in the software/security area in category 2100 that I just submitted to the Peer to Patent system. They are selective, limited to only 250 patents in this pilot stage of the system, so I might not make the cut. But if I do, I hope the world will join in the fray to tear my patent apart, because whatever survives will be worth something - and I'll know its worth years sooner than otherwise.

In any case, I hope you'll sign up to be a reviewer for the Peer to Patent community review system, a brilliant idea. And if you see an application from me show up sometime, have at it!

To Bring Your Invention to Market, Know the Market and the Market Forces

There are so many great inventions out there in search of a market, addressing problems that people don't really care about. Disruptive innovation needs to solve the problems of real users, often in ways that the mainstream market ignored or couldn't directly address. Sometimes, inventions solve serious problems that users care about deeply, but which cannot be marketed effectively through existing market channels or because of regulatory or legal risks. For instance, products that enhance safety may be difficult to market to consumers by advertising the safety benefit if there is a risk that they will misuse the product and then sue.


An example of the barriers to success for safety innovations comes from Joe Figliuzzi's story of marketing a safe ladder (see US Patent 5,915,498 and 5,791,437). A large company was interested in his ladder (see US Patent, but by focusing on safety in his marketing approach, he set himself up for failure because he did not understand the market and regulatory forces for the ladder business. Had he taken a different marketing approach, his product might have found a home in a distribution channel by emphasizing some other feature, letting users see for themselves the obvious safety benefit. But touting improved safety for a new ladder will scare away the manufacturers who don't want to be sued and who don't want to suggest that their other ladders aren't safe as well.

The disruptive power of an innovation depends on how it is positioned in the marketplace. Positioning it poorly - almost guaranteed if you don't know the turf - can quickly kill and innovation, dooming its disruptive potential. It's not enough for an invention to be cool. To be disruptive, or even to just make a buck, it needs to be positioned for success in the marketplace, and that means you need to understand the needs and pressure felt by manufacturers, distributors, end users, and others. Know the market, find the positioning, and let your product disrupt.