Thursday, December 22, 2005

Quality, Service & Price: Choose Two

The title is reminiscent of a sign that a friend of mine had posted behind the counter of his print shop in the early nineties. What made me remember this sign was my experiences over the past few months was my experiences over the past few months dealing with contractors and buying appliances and other goods for our new house.

It seems to me the title statement could be considered a truism. Stated another way: you cannot pay the lowest price and expect both quality and service. This seems to be especially true in present day America.

And of the three, you really should rarely skimp on Quality, which defines the value of a good or service. So the choice is most often between Price and Service.

Too often, I think, we choose price over Service. At least I know, I do! Money often is an overrated asset valued perhaps more highly coveted than it should be. Afterall, money is only good for acquiring goods and services. In and of it self, it has no tangible value: money is a merely abstract concept afterall. However, I do understand why we value it so highly: people covet that which we do not have enough of and we never seem to have enough money.

But if money is abstract and intangible, Service is much more so. It is extremely difficult to put a value on it and often we do not value it until it is too late. Consider the situation where you have purchased a piece of computer equipment and something goes wrong or it doesn't work properly. You read the manual and do everything that is suggested in it to no avail. So you call customer service where after what seems like 20-30 minutes surfing through automated menus you finally get a live person. You ask your question and (AARGH!) they read the manual back to you!!! They are no help at all and you spend the next day and a half doing everything possible to solve the problem. My guess is in the end you wish you had bought a product that had a better support staff backing it up.

I guess the biggest question is: is there an exception to the rule where one can have all three: Quality, Service and Price? Sometimes, yes, but usually no. Look for companies or service providers that are hungry to grow. To get established they will often sacrifice on price while providing a superior product and incredible service. But as the newcomer gets busy, something always suffers. The company realizes it cannot make money and compete offering incredible customer service on the shoe string budget required because of the low price. One or both suffers and BEWARE of the established company that offers great customer service and a great price BECAUSE they are probably skimping on Quality.

Anyhow, there really isn't any point or moral to this post. Just something to ponder as a consumer.

Now, I am sure some of you are wondering where our firm fits into the mix. Well, we are still fairly young and growing so we try to provide all three. I will tell you that I value quality above all else in the patents I draft and compared to some of my national competitors, I am more expensive. However, I am still much less expensive than Big Firm lawyers that I used to work along side. I firmly believe I offer among the highest quality to price ratios among patent attorneys that work primarily with individuals and small companies.

You will typically find the best service at the big firm as they have secretaries and docketing clerks to make sure you are well informed of all aspects of you legal representation. On the other hand, the big firm attorneys often do not have the time and energy to devote to talking with the individual client as it keeps them from drafting lucrative applications for their Fortune 500 clientele. So servicewise, I make it a point to return all client calls within 1 business day and I take the time to walk clients through the patenting process so they understand what they are paying me for. However, sometimes I am remiss in getting copies of documents out to my clients despite everything being filed promptly and on time with the appropriate authorities. I am constantly striving to do better but the realities of limited time often affects my success in this regard. I guess you have to consider what you would prefer: institutionalized service of the Big Firm or less perfect but personal service that I offer.

And if I do not post for a few days: Merry Christmas and a Happy New Year. Hears to hope that no matter how good or bad 2005 was for you, 2006 will be even better.

Friday, December 16, 2005

Client Spotlight #2

The title of this entry, "Client Spotlight", is particularly appropriate for this client, Camerabright!, Inc.

The company manufactures a unique LED light that fits into the tripod mount of a camera. The light serves several purposes: (1) it can be used to illuminate a scene to facilitate video capture using a digital camera or a camcorder; (2) it can be used in place of the flash when taking portraits to help minimize or eliminate the occurrence of redeye that is common with strobe flashes; and (3) it can be used with macro photography where a high powered strobe flash would washout details of the subject.

The product is Patent Pending and we expect that a Patent will issue sometime in 2006. The company is also in the process of obtaining several Trademarks. Furthermore, the company is growing rapidly and is working on new lighting solutions particularly advantageous to digital photography.

Check them out at www.camerabright.com.

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Wednesday, December 14, 2005

Three Chords and the Truth


Part I

“All I’ve got is a red guitar . . . three chords and the truth” U2’s Bono reflects in their cover of Bob Dylan’s “All Along the Watchtower”. If you take a look a most popular music these days, you might be surprised by how many songs consist of basically three chords (for those of you who don’t know a chord is merely two or more notes played simultaneously). For example, the late Warren Zevon’s “Werewolves of London” (copyrighted 1978) and Lynard Skynard’s “Sweet Home Alabama” (copyrighted 1973) are both basically chord progressions based on the major chords of D, C & G – with differing emphasis. If you ask anybody, I don’t think that you would find a person that would say that they are the same song. Additionally, I don’t think that anybody would dare to assert that Skynard should be able to claim copyright infringement against Zevon or that either piece should not be entitled to copyright protection.

I came across an article that asked the above questions the other day. The article, written by Peter Gutmann appeared in the October issue of IP Law & Business, and asks some interesting questions. The article starts off with an analysis of the sixths circuit’s 2004 decision in Bridgeport Music, Inc. v. Dimension Films, and winds up questioning whether or not music should be eligible for copyright protection at all. Mr. Gutmann begins and ends the article with one central premise – “all music borrows from other music and thus warrants no protection at all.” Personally, I think Mr. Gutmann’s “throw the baby out with the bath water” analysis is a bit over simplistic and dramatic, but it is an interesting concept to consider and most of all it forces us to take a deeper look at that what copyright is actually protecting when it relates to music.

Mr. Gutmann starts the article with an overview of the 6th circuit’s 2004 decision of Bridgeport Music, Inc. v. Dimension Films. Bridgeport is a case about utilizing digital sampling in music. The facts of the case are fairly straight forward. The song in question is “100 miles and running”, a rap song that appeared on the sound track to the 1998 movie I Got the Hook Up. The sample in question featured a two second sample of a three note guitar riff from Funkadelic’s “Get Off Your Ass and Jam.” The riff was subsequently lowered in pitch (thereby changing the individual notes of the riff), and looped to last for 16 beats and was featured several times during the song.

The court went through a standard analysis under 17 USC 102. It examined the two works to see if there was a substantial similarity between the two. The judge ultimately ruled that no reasonable person would recognize the source of the riff without being told and therefore concluded that no infringement occurred under section 102. If the authors of “100 miles and running” had actually made the riff using a studio musician playing an actual guitar, that would have been the end of the case. Since the riff was basically sampled and subsequently altered, the court delved into a different section of the copyright statute – section 114(b).

Section 114(b) of the copyright statue protects the owner of a sound recording’s exclusive right to make copies of the recording. In particular, it grants an exclusive right to the owner of the sound recording to make copies “that directly or indirectly recapture the actual sounds fixed in the recording.” Infringement under this section occurs when an individual, other than the copyright owner, reproduces the work by mechanical means or rearranges, remixes or altering the work in some other manner by mechanical means. This section only protects the sound recording itself and not the underlying material. Therefore, if I record an arrangement of Pachabell’s “Kannon in D”, some marketing director cannot use my rendition in their new TV commercial with out paying me a royalty, even though the song itself is in the public domain. Of course the ad agency could always commission their own performance of the song (which is codified in 114(c), allowing an independent fixation of the sounds contained in the sound recording – however you still would be subject to the copyrights to a musical work contained in section 102), but they cannot steal mine just because the source material is in the public domain. This is a fairly logical provision – as the rationale behind it states that we want to protect people’s artistic endeavors and an individual’s creative interpretation, arrangement or performance of a musical piece should be protected even if the underlying material is not. The court in Bridgeport found that the use of the sample violated section 114(b) and set out a bright line rule – “if you sample get a license”. It doesn’t matter if you sample a fraction of a second or the whole work; if you do not obtain a license you will be violating copyright law.

Personally, I think this rule makes sense and allows for some clarity in the law. Additionally, we are not talking about a case where there is a chance that the infringement was unintentional – the individual intentionally sampled the other work. Likewise, the rule does not forbid sampling - you just need to get a license. When talking about music, we have a very efficient system for clearing music licenses so, there really isn’t a high transaction cost for an artist wishing to use a sample. Correspondingly, requiring artists to get a license or gain permission to use a sample could result in unexpected benefits. For example, in the 1980 the rap group RUN DMC was recording a cover of Aerosmith’s 1970 hit “Walk this Way”. Producer Rick Rubin contacted the Aerosmith camp to get permission to use the song. Aerosmith not only gave their permission, but singer Steven Tyler and guitarist Joe Perry even stopped by the studio to lay down new vocal and guitar tracks for RUN DMC’s version. That collaboration has been cited as the impetus for the wave of Rock/Rap collaborations that have been so rampant the past few years and influenced groups and rap artists such as Limp Bizkit, Linkin Park, and Jay-Z.

Guttmann also makes an attempt to defend artists that sample stating that it is not usually done to save costs, but rather as homage to honor the artists that preceded them. I don’t know about you, but I really can’t wrap my mind around this justification. If the motive for sampling is not economic, then why would the artist object to paying for a license? Additionally, if the purpose of the sample is to pay homage to those who have come before, why wouldn’t you want the person you are honoring to receive some sort of compensation for their efforts? Lastly, the homage justification doesn’t apply in the Bridgeport case since it is nearly impossible to pay homage to someone with a sample that nobody would be able to recognize in the first place. The truth of the matter is that sampling, without any obligation to obtain a license, does create a windfall for the artist. Without sampling, the artist would have to hire a studio musician who would be required to receive a performance credit on the album and residual payments on all sales or radio play of the song. By sampling and not obtaining a license an artist can keep that credit and residual for him or herself.

In the second, installment we will look at Gutmann’s more controversial theory that music itself should not be afforded copyright protection.

The Rocket Science Chronicles (Part II)

Before we delve into my experiences starting and running the Denver Bicycle Design Center, Inc., it is useful to understand my prior work history and experience. I graduated from the University of Illinois in December of 1986 with a BS in Metallurgical Engineering. In my last year and a half of school I focused on polymeric materials (plastics) and advanced composite materials (such as graphite fiber/epoxy materials).

Like most engineers at the time, I graduated without a job, but as fate would have it in late January of 1987, I received a call from Martin Marietta in the Denver Metro area. I flew out from my home town of Rochester, NY on a Thursday, interviewed on a Friday and received an offer on Monday.

On March 16, 1987 at the age of 22, I started in my first post-college professional position as a lead engineer in the Composites Lab. My job was to oversee and facilitate the small scale production of composite components for various satellite programs. The job was interesting and certainly the pay was substantial for a new grad in 1987. Nonetheless, I really only looked at the position as a stepping stone to going into business for myself at some point in the seemingly distant future.

Within 6-12 months or so on the job, it began to become apparent to me that the life of a corporate engineer was not for me. In short, there was too much politics. The company and my colleagues weren’t so much concerned with producing the best quality of the product or the arriving at the best solution to a problem. Rather, many of fellow engineers were focused on looking good to the boss and other higher ups even if that meant misleading or misrepresenting the true state of the projects they were involved in. I was never good at politics; I told things the way I saw them good or bad with the intent that information was best freely shared so that the best solutions to problems and issues could be ascertained. I was so naïve! At big companies one gets ahead by covering your butt when you make mistakes and tooting your horn as loudly as possible when you do something right. It also doesn’t hurt to have someone below you to blame for your problems.

To step aside from the narrative at hand: it has been my observation that the primary advantage that large companies have over small entrepreneurial companies is economies of scale, developed contacts (such as a customer base and developed means of distribution) and an established reputation. What large companies have a huge problem with is fostering innovation and creativity at least when compared to the creativity of the entrepreneur. And for many new companies, it is creativity and ingenuity that gives them an advantage over their well heeled competition. Of course, it doesn’t hurt that the entrepreneur or small company can lock up rights to fruit of their creative endeavors with PATENTS. Simply, for innovation and creativity to flourish requires taking risks. As a company grows and becomes more established, it has to protect its value and it becomes more risk adverse.

Anyhow back to our story: realizing that I was not cut out for the big company scene, I began to investigate starting my own business. Further, I began to study for an MBA part time. My first business idea was to sell advanced composite materials to radio control aircraft hobbyists. I knew where to buy the materials and I could repackage the materials in smaller lots and sell them at a significant profit. I identified suppliers, researched what types of raw materials hobbyists would most likely use and I investigated ad rates for the appropriate magazines. But in the end I never had the courage to flip the switch and get things started. I just did not have the confidence the composite materials would sell and the risk seemed just too great.

I was an avid bicyclist and mountain biker back in those days and I had a real desire to get involved in the business. I came up with my first product/invention back about 1989 or 1990: the Rack Camel. The product comprised a simple aluminum bracket that attached to the struts of a rear bicycle rack (such as a Blackburn rack) and had mounting holes for a water bottle cage. Accordingly, the a rider could carry up to 2 more water bottles during a long back country ride. The inspiration came from pedaling around the desert surrounding Moab, Utah. I received quotes to manufacture the product as well as advertising rates for the major bicycle magazines. I even made and tested several prototypes. I did not pursue a patent although I have no doubt I could have received really broad coverage if I had. In the end, I didn’t pull the trigger. Within the next year or so, a company called Fastrak Systems, Inc. made a splash with the Camelbak hydration system, and well, their solution to the problem of carrying enough water was just plain better than mine. Incidentally, if I had proceeded, Fasttrak would have likely shut down my use of the phrase “Rack Camel” as infringing on their “Camelbak” trademark even though I didn’t know about their product when I came up with the name. So in the end, perhaps this venture ended the way it should have: never getting off the ground.

Coming in Part III: My first actual entrepreneurial venture and the genesis of Rocket Science.

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