Marathon Digital Holdings Inc (MARA)

[onewhoknows2much]

http://www.ipwatchdog.com/2014/05/01/inventing-the-smart-phone-why-the-trolls-were-saviors/id=49356/

Dr. Rocco Leonard Martino, inventor of the CyberFone, the first Smart Phone.

A major car company is running commercials about companies that started in a garage. Amazon, Apple, Disney, Hewlett Packard and the Wright Brothers all started in a garage. The advertisement extols innovation, and the modest roots of great discovery and great companies. By implication, it hopes to align the public image of its cars coming out of a garage with these very successful companies. But the car company ad is wrong. It is highly unlikely these companies would ever get started in today’s hostile environment for the small innovator or company.
Let me tell you why.

This is a first hand account of my experiences with inventing the Smart Phone.

It became obvious to me in 1994 that the voice transmission over traditional telephone systems could be done using computers linked to telephone, cellular or internet networks. That was the origin of the concept of a smart phone utilizing the computer in support of multimedia traffic. I called it the CyberFone, filed for patents in 1995, and built models during that same period to demonstrate to interested parties, including the patent office.

I expected accolades for coming up with a useful idea, and proving it could be done, but that never happened. Some thought the screen was too small, others thought the concept of touch would never catch on, or that no one would want to make phone calls using a computer. One great business genius told me it was a software world and that no one was interested in hardware.

That was a ridiculous statement. How could software run without a machine? Apple became the most valued corporation in the world by combining hardware and software.

It’s tough trying to market a new product, no matter how exciting or useful it is. In fact, the more revolutionary the product is, the harder it is to gain acceptance. Disruptive technologies that lead to new industries are often delayed because they upset the status quo. It was Nicolo Machiavelli who enunciated this basic problem in his book “The Prince” in 1513. In today’s idiomatic language, he stated, “There is nothing more likely to fail than a new system or invention, since it meets with the enmity of all those who are affected by it and receives only lukewarm support from all those who will benefit.” The inventors of such disruptive technologies or devices are frequently ridiculed and often end up penniless. Johannes Gutenberg was met with tremendous resistance, even being accused of consorting with the devil, when he created his first printing press in the fifteenth century, even though his first book was the Bible. Rudolf Diesel died penniless; Frank Whittle had trouble meeting payments on his patent for the jet engine, which he filed in 1930. John Mauchly and Presper Eckert, who invented the first digital computer, the ENIAC, in 1946, could not secure funding to monetize their great invention, and ultimately sold their company for a pittance.

In my case, I could get no financial support for my invention, which is why I set out to fund the project myself. It was a horrendous undertaking. Some obstacles included building prototypes, demonstrating to potential buyers, going to shows, extending the patents with new filings in different countries, writing programs to demonstrate the capability of my invention, and so on. When I was finally ready to go into production, the chip supplier falsified the actual performance specs. The chips I selected for the production versions only transferred data at ten percent of the rated speed, which was too slow. It was the year 2000. The whole thing, in a sense, blew up in my face. By the time I could recover from this disaster, the dot.com crash occurred, the orders evaporated, and I ran out of money.

Next, I tried to interest manufacturers in licenses. That went nowhere. One company officially told me no one would take me seriously until they were sued, so I set out to sue a few organizations that I felt were infringing. I could not find a law firm that would take the case. Firm after firm said they had a conflict of interest. This took years. As far as trying to manufacture, it seemed as though the train had left the station.

What could I do? I could not get a major law firm to represent me in litigation because of client conflict, even when such firms were filing my patents. I could not go into manufacturing because I could not get funded. I could not sell licenses, even to infringers, because I had not sued them. This is when patent accumulators came into play. The opposition called them “trolls.” To me, they were “ saviors.” They provide the experience and leverage individual inventors need to get the attention of those who take what they want without repercussion.

I turned to patent accumulation firm Marathon Patent Group (headed by Doug Croxall), who in turn engaged IPNav, (founded by Erich Spangenberg), and we struck a deal. Without Doug and Erich, my patents would have gone nowhere. Thanks to their efforts, along with the fiercely supportive legal teams at Russ August & Kabat and Mishcon de Reya New York, LLP, companies have recognized the value of my technology and acquired licenses. As an inventor, I am gratified at this success, but more importantly, I am heartened that the hard work and creativity has finally been recognized. It is unfortunate that justice can only be achieved with the application of the adversarial process of litigation. With the billions in profit achieved on smart phones, I would have thought the inventor would have at least received a thank you instead of a brush off. Organizations like IPN and Marathon make it possible for the sole inventor to survive while swimming with sharks.

Though we started getting some return for the tremendous investments I had made in time and treasure with the CyberFone or the Smart Phone, there was great resistance to paying royalties on my patents. At one court hearing, the defendants ridiculed my invention to cloud the issue of their infringement. Facts became irrelevant amidst the name calling, which seems to be the norm in this arena. There is a great hue and cry today about the patent trolls – a derogatory term applied to patent accumulators. But the trolls are not infringing. They are called trolls by infringers. When I was a little boy, we used to chant, “Sticks and stones may break my bones but names will never hurt me.” Maybe not in the real world, but the world of lobbying and high finance is a different story. There would be no ‘trolls’ if there were no infringers. The patent accumulators are providing a vehicle for small inventors to gain some return for their hard work in creating something new. Without such innovation, we would be stagnant. Innovation is crucial in progressing economically.

We need new industries to create jobs and opportunities for the millions of people all over the world who are having trouble finding employment. If we stifle innovation and prevent people from being creative and developing ideas, we will spiral downward. We must decide if we want the people of today to have a better future than their parents or grandparents.

If the government is sincere about stimulus to create jobs, then the government should set up a competition for new inventions and support what gets invented. A criminal is given the benefit of a Public Defender. An inventor is given nothing. Why not a government funded Inventor Defender? Criminals get help, but those who seek to benefit the country and the world get no help. But, you say, that’s the SBA. Try getting an SBA loan for a new invention!

An even better idea would be for the government to honor the laws that protect inventors instead of changing the rules to protect companies.

About the Author

Dr. Rocco Leonardo Martino is founder and Chairman of the Board of CyberFone Technologies Inc. Most recently he was Founder, Chairman and CEO of XRT, Inc., the world leader in providing complete global treasury, cash and banking relationship management solutions for some of the world’s largest corporations and government entities. Dr. Martino is the inventor of the CyberFone, the first Smart Phone, and the driving force behind the software systems permitting real-time video, voice and data linkages. Dr. Martino is also the author of twenty published books as well as scores of papers, and numerous corporate monographs on computers, communications, networks, and planning.