Ernest Grumbles III

Ernest Grumbles III is an IP (intellectual property) and business development attorney at the Minneapolis firm Adams Monahan, where he works with entrepreneurs and early stage, tech-oriented enterprise. He is also Co-Founder of MOJO Minnesota, a collective supporting entrepreneurs and promoting innovation policy and community in Minnesota. He enjoys fresh air and lots of caffeine and is constantly trying new things (instead of sleeping). He may be reached at: egrumbles@adamsmonahan.com.

Bilski, Business Method Patents and the Uncertainty Principle

Posted by: Ernest Grumbles III under Government, Politics Updated: July 15, 2010 - 7:00 AM

On June 28, 2010, the U.S. Supreme Court issued its ruling in the biggest patent case in recent years, In re Bilski.  The case related to the patentability of business methods (steps in accomplishing a business task) and has been a lightning rod in the intellectual property world (and elsewhere) during its long path to conclusion.  These business method patents, typically directed to financial, Internet commerce, data analysis and business processes, are often written such that the particular machine or system used to perform the method is irrelevant.  Bilski himself had tried to get a patent on various methods of managing hedge fund risk.

In one view, the patent system is simply evolving to protect modern methods of technology, which may be platform neutral.  Think of the iPod, which can replace several other physical hardware tools.  In another view, such methods may not seem to require the perspiration of genius of physical hardware and seem to some to be too easy to create and protect.  Thus the questions posed to the Supreme Court: (a) do patentable methods require use of a particular machine or the transformation of physical matter; and (b) are business methods outside the bounds of patentability; and (c) what of Bilski’s methods of managing hedge funds.

If you’re Bilski, you now have certainty.  The Supreme Court unanimously rejected his claims as being “abstract” and unpatentable math formulas.  As to the other questions, we only know what’s not true.  Per the Court, methods or processes, to be patentable, don’t necessarily require the use of a particular machine or the transformation of matter.  That is simply one of the ways of evaluating whether a claimed method is too abstract to be protected.  Finally, the Court ruled that business methods are not per se unpatentable.  However, the converse is not true either – business methods are not always patentable.  Rather, each inventor’s claims will have to be evaluated individually as to whether they are too abstract. 

On this last point, if the Court had offered a definitive rule of unpatentability, thousands of patents across the country would have died a silent death.  Depending on your perspective, this was a good or bad thing.  For example, in the software community, there are many companies with valuable patent portfolios such as IBM who breathed a sigh of relief at the Court’s ruling.  And there are others in that community who believe there should be no patents on software inventions who were equally dismayed.

For the inventor community as a whole, the upshot of Bilski is that there is no strict test for determining patentability of methods and processes.  Flexibility and creativity in patent protection still reign.  But the lack of a bright-line test means that more cases will fall within the zone of uncertainty, which may increase the cost of patent protection and litigation.  While the Supreme Court may have been properly cautious in not issuing a ruling that stifled patent protection for future technologies, it did little to change the current realities faced by inventors and industry.  They will keep working and keep inventing, and the Patent Office will continue to sift the wheat from the chaff.

 

Memorial Day and the Loss of Gravity

Posted by: Ernest Grumbles III under Society, Politics Updated: May 31, 2010 - 10:22 AM

 

This Memorial Day weekend, did you spend more time thinking about what kind of beer and brats you'd buy for your picnic than about the 1.2 million who have given their lives in uniform? Did the latter even cross your mind?

Yes, the President will be speaking platitudes (truthful) today about the courage and tragedy of those who lost their lives. But, I would wager that most people, while aware that Memorial Day is a federal holiday to commemorate our military dead, are indifferent to the gravitas of this holiday. Setting aside your position on the propriety of more recent armed conflicts (Iraq, Afghanistan, Vietnam), one thing you know for certain: many persons, typically young and working-class, have given their life wearing a U.S. uniform.

How to account then for the fact that this very serious holiday has become little more than the official start of summer? There are several forces at work, and I will try to parse them out.

Americans are Uncomfortable with Mortality

For a country remarkably comfortable with violent movie content and a high murder rate, we are uncomfortable with mortality. If we can avoid it, we do. Thus the proliferation of every possible treatment or surgery on the body to avoid signs of aging. If we are 60, we want to look 40. Memorial Day is a day to deal with the fact that our nation has lost 1.2 million soldiers and sailors acting at our direction (yes, we're a democracy). Since we're uncomfortable with this reality, and our own mortality, we have transitioned Memorial Day into a vapid summer launch celebration.

Americans Don't Like Downers

In a similar vein as the previous example, American are relentlessly optimistic and avoid undue analysis of their actions. We are not a moody people and don't like to dwell on the past, much less a bloody past (except when we re-enact Civil War battles - which we'll then ignore on Memorial Day). It probably would've made sense to have memorial periods after major conflicts and wars (like a 10-year period), give the dead their due and then "bury" that particular war in a proper way. Of course, we would not then have a 3-day weekend for decades. In a strange way, this is a strength - we can avoid replaying bloody history (as in Ireland, Rwanda etc...) by simply forgetting it.

Americans Ignore War Dead if They're Poor

While we enjoy violence as entertainment, our middle and upper middle classes have largely left the dirty business of the battlefield to the children of hard-working folks of rural areas and the inner city. With no draft, we have a regressive military - where the tax of death is meted out in greater quantity on the poor. Since the poor are a downer (see above), we tune out their deaths (like the thousands lost in the Middle East in the last nine years). In World War II and Vietnam, when the draft was still in place, everyone knew someone who had served (both my step-dad and father-in-law served in the Navy) and knew someone who died in war. This maintained a sense of community purpose and sacrifice. With the loss of a heterogeneous military, we have less reason to focus on the tragic aspect of Memorial Day.

War Now Polarizes

In recent decades, it has been more difficult to maintain citizen unity around military action (for better or worse). With the internet, we all have access to information (at least pseudo-information) and routinely reach our own conclusions about whether we should go into a certain war. This discernment started in Vietnam, though the average American then was not an anti-war protestor. With our complex political transitions from 1980 to the present day, partisan politics has smothered traditional patriotism. Our government has been challenged to develop common purpose around something as innocuous as a new national park, much less an endeavor of the scope of war. The political rancor over the "War on Terror," albeit justified, has compromised our ability, or willingness, to deal with the very real tragedy of lost lives and broken families.

All Holidays Drift Toward Oblivion of Meaning

Maybe this is too obvious. We can all complain that our particular pet holidays have become compromised through material culture (Turkey Day, Fireworks Day, Present Day, Egg Day... and the list goes on). In some ways, the holidays that still work are ones with little gravity or historical complexity to begin with - Halloween, Valentine's Day, New Year's Day). We can simply enjoy them and not have to worry about ignoring their real purpose (enjoying them is the purpose!). But to see holidays with religious or historical significance drift into "3-day weekends" and occasions to sell products or intoxicating beverages is a little disheartening.

Perhaps the end was near for Memorial Day in 1968 when Congress changed several federal holidays to the certain Monday of a certain week of the month. We would celebrate the holiday, but only if it gave us a long weekend. Sen. Daniel Inouye of Hawaii, a WWII vet, has tried for years without success to move Memorial Day back to its original May 30th date.

Vesting holidays with substance has become a matter of personal choice - not common social purpose or obligation. When you enjoy your Memorial Day picnic with family, and you should, will you remember the 1.2 million? Balance levity with gravity on this Memorial Day and keep in mind the sacrifice others have made for the safety of our Republic.

 

Minnesota Radical CEO #1 - Matt Dornquast - Code 42 Software

Posted by: Ernest Grumbles III under Society Updated: May 29, 2010 - 4:11 PM

In an earlier post, I raised the question “Who are Minnesota’s Radical CEO’s?”  Why again does this matter? If we want Minnesota to remain a hub of tech innovation and jobs, we need business leaders who get the connection between business, people and place. 

I went searching and found a worthy first Radical CEO: Matt Dornquast of Code 42 Software.  Dornquast has built a dynamic and successful Minnesota tech company even through the downturn. And he has an express purpose to help nurture the Minnesota tech ecosystem. This is not just aspiration. He has turned down multiple VC deals that would've required him to move the company out of Minnesota.  In this era, that’s radical – and that’s true community vision. 

Key Facts:     
 
  • Matt Dornquast, CEO and Co-Founder of Code 42 Software and home of CrashPlan - founded in 2003.
  • Interned at Minnesota innovation pioneer Control Data in high school and coded in assembly language for seven years by the time he got to college. Knows Minnesota’s amazing information tech heritage – but is aimed at new benchmarks.
  • Has built CrashPlan into the #3 online backup provider in the United States (after Mozy and Carbonite) with worldwide distribution. CrashPlan grew 400% during this recent economic downturn period (how many tech companies can say that?)
  • Maintains a collaborative work environment and focus.  Describes people and culture as the most important ingredients for perpetual success.
  • Has created “startups” inside large tech companies – yes, that’s possible. Has worked with pods of very creative people who are pushing innovation from deep inside large enterprise.
  • Has turned down numerous deals from West Coast and local VC’s because he believes firmly that Minnesota tech successes should stay here to enrich and develop the environment.  Not interested in “flipping” companies. Wants Code 42 to be the great Minnesota tech/software company that didn’t leave. 
  • Thinks Minnesota is a “10” as a place to launch new tech enterprise: smart people, great work ethic, access to capital.   Positive attitude always welcome!
  • Actively encourages potential Minnesota entrepreneurs to weigh risk and reward and jump on chances to build something new when they can.  Wants entrepreneurship taught early – by teachers and parents!
  • Mentors other local storage companies (his future competitors?!?) and is involved with local seed-capital efforts for startups (MinneSpark). Wants local money to move more freely.
  • Wants 3 great consumer-facing tech brands based here (the likes of Google, YouTube etc…).  And he means it.

With Radical CEO’s like this, we can maintain and expand our amazing Minnesota innovation culture.  Who's next?

Who are Minnesota's Radical CEO's? And Why We Need Them.

Posted by: Ernest Grumbles III under Society Updated: April 26, 2010 - 7:38 AM

Does Minnesota have any “radical CEO’s”?  I’ve asked this question many times, and I usually get blank looks or, “I can’t really think of any.”  Why is this a problem?  First, you have to understand what a radical CEO is.  My definition is: a CEO who (a) understands the effect that their company has on the socio-economic, political and cultural circumstances of their workers, customers, investors and partners and (b) is able to articulate and share a credible vision for the company’s role in improving those circumstances (beyond mere foundations and donations).  
 
Radical CEO’s, who are, in larger enterprises, analogous to political figures, understand the clear connection between what their business is trying to sell and its cultural and social impact.  This is obviously a vital business skill in the sense that to be able to sell products and services well, you need to understand the environment that you are trying to sell into.  But I think there is an aspect of how radical CEO’s operate that shows that they are fundamentally concerned with both the economic and social impact of their enterprises.   
 
Here are three random examples:  Steve Jobs (CEO, Apple - no groans); John Chambers (CEO, Cisco); Lynn Elsenhans (CEO, Sunoco).   
 
Why Jobs?  Do I have to answer?  The guy gets the connection between great design and the cultural and social forces it engenders.  Jobs understands the impact of technology on human lives and cares enough about that impact to create things of beauty that provide entertainment and accessibility for millions of people.  I recently read a quote that said that “I would buy tissue paper from Apple if they sold it.”  This is also why my 69-year old non-techno mother told me a few days ago that her relatively new iPhone was “one of the best things she’s ever had.”  Does this mean Jobs is not robustly trying to grow profits and market share?  Of course not.  But in our age of fickle consumers, you don’t get those without connecting company and culture.   
 
 
Why Chambers?  Consumers are demanding accountability and connection in communication with the people that sell the things they buy and radical CEO’s are willing to engage in that conversation.  In fact they encourage it and facilitate it.  Chambers figured out that his company, known for building routers and switches, is really about communication and collaboration.  The networks and systems the company develops and innovates are about connecting people – not machines.  And the philosophy starts at home – with Cisco’s dismantling of traditional corporate hierarchies and information pathways in favor of open innovation and communication.  Chambers is now facilitating the creation of entire wired cities in Asia
 
Why Elsenhans?  This former basketball player and math major from Rice, one of the 15 women CEO’s of Fortune 500 companies, is making an oil company an advocate for environmental change.  How many oil companies are advocating for climate change legislation, an increase in federal gas tax and move to all sustainable energy sources?  That Sunoco is out in front on these issues is her doing.  Elsenhans knows that the companies with the greatest influence on energy (the oil companies) need to lead the way – not fight. 
 
It’s too simple to say that these are simply clutching, greedy people who are just manipulating society at large to line their pockets and enrich their investors.  That’s to fundamentally miss the personal passion for changing the world that lies at the heart of anyone pushing innovation, whether at a large or small enterprise.  I firmly believe that CEO’s like Jobs, Chambers and Elsenhans could just as easily have ended up running powerhouse soup kitchens or leading public health efforts in Africa.  Corporations with these kinds of CEO’s have public/private missions that drive the loyalty of employees, investors and customers. 
 
Another important feature of radical CEO’s is the willingness to speak out.  Radical CEO’s recognize the responsibility to govern and lead and talk openly about what revitalizes communities, technology, creativity and new enterprise.  They set an example for other CEO’s and corporations, who are often struggling to figure out what and who they are beyond a purveyor of a particular good or service. 
 
Yes, many CEO’s have big egos and can be brash and arrogant (like some of the folks above).  Name a social enterprise or movement that didn’t have dominant personalities or titanic characters at its heart (think: Samuel Adams; Abby Hoffman; Lucretia Mott; Newt Gingrich; Cesar Chavez; Emma Goldman; the list goes on).  
 
So radical CEO’s are CEO’s who fully understand that a large scale economic enterprise is a large scale cultural and social force movement.  In an age where government and business share hegemony in preserving social stability, businesses and CEO’s that don’t understand and actively cultivate the social impact of their enterprises are leading enterprises that may or may not have relevance in 20 years (how’s that for market impact).  
 
The question then is: who are Minnesota’s radical CEO’s.  Who are the outspoken business leaders that blur the lines between economic, social and cultural leadership while leading energetic and successful enterprises?  Where are the titanic personalities that put Minnesota enterprises on the map as innovation engines?  You should not have to struggle to name names.  
 
Minnesota in fact should be a prime breeding ground for such radical CEO’s.  It’s a populist state with economic might, with strong connections between rural and urban, academic and “real world,” whose citizens give among the greatest percentages of income to charity of any state, a home of radical theater and agricultural cooperatives. 
  
Minnesota CEO’s who get the deep and organic connection between business, society and culture, and are willing to be outspoken community leaders, will be the ones to drive Minnesota innovation and attract investment dollars.  Finding, highlighting and nurturing these radical CEO’s is a critical step for the Minnesota economy.  In a joint effort with Tech.MN, I will be digging into the Minnesota soil looking for Radical CEO's.  If you have names, name them here. 
  
(Adapted from a post on Tech.MN - "Who Are Minnesota's 'Radical Tech CEO's?")

 

How to Choose Minnesota Judges? Quietly.

Posted by: Ernest Grumbles III under Government, Politics Updated: April 5, 2010 - 8:17 PM

Since the dawn of recorded time, one of the functions of government is to help decide disputes between citizens and between citizens and government.  This prevents the unnecessary (and occasionally bloody) conflicts that ensue from self-enforcement of legal rights.  Think vigilante mobs and feuds.  If justice is going to be something more than vengeance, then it should be rendered impartially and equitably.  Citizens need to have confidence that the person deciding their disputes has an open mind, knows the law and complies with the law.  The process for selecting such people has been the challenge.

In the U.S. federal court system, judges are primarily chosen by presidential appointment. The U.S. Constitution provides for the Executive Branch to select, and Senate to approve, candidates for federal judge, who serve for life.  This system provides a deliberative screening process for candidates by elected officials, but also then shields those candidates from political influence after approval.  While there are rancorous confirmation hearings at times, they are infrequent.  If candidates are well-chosen and the process well-handled, the appointee humbly takes his or her position and begins handling legal disputes that are typically free of any political content.  Do you care how the Minnesota federal courts decide random breach of contract suits?  Likely not, unless you're personally involved.  But you do likely want the disputes handled properly.

An appointment system, free of nasty election politics, favors a quiet, neutral and independent judiciary, which is essential for public confidence in justice.    The downsides are that work performance can vary over a lifetime, and federal courts are largely left to have to police their own performance.  This is in marked contrast to legislators who are regularly turned out of office for policy or performance reasons.  There are bad judicial eggs occasionally and the U.S. Constitution provides for impeachment.  Thankfully, this rarely occurs - mostly because judges tend to behave themselves! 

The U.S. Magistrate judge system provides another good model for balancing the need for qualified candidates with judicial independence.  U.S. Magistrate Judges were a creation of Congress under Article I of the Constitution to relieve some of the occasionally severe backlog in the federal court system.  Magistrate Judges in Minnesota are appointed by the local District Court for fixed terms - with the input of a local merit advisory panel of attorneys.  Persons can apply for the positions openly, and the process typically produces high-quality judges - again free of any political contest or election.

And now on to Minnesota state court judicial selection and the current controversy.  Being a populist state, Minnesota requires judicial elections.  The Governor, however, may appoint persons to judgeships that become open in between terms (whether through retirement or death).  In actuality, most judges in Minnesota get on the bench initially through appointment because most judges leave before the end of their term.  This is largely a function of custom.  The Commission on Judicial Selection then handles applications for appointment and makes recommendations to the Governor. 

Nonetheless, all Minnesota judges, whether initially appointed or elected have to eventually stand for election, which can be contested.  While few judges are turned out in these elections, which happen every six years, the people have a direct say in who gets to decide civil and criminal disputes.  Incumbents are typically re-elected because really there's no reason to move them out.  They're not public figures regularly clashing with opponents on matters of social controversy.  Rather, they're doing their job of processing and disposing of the 1000s of lawsuits, criminal proceedings, family court spats and other matters requiring calm and impartial intervention. 

So what's the problem?  Some have tried to push judicial elections in Minnesota in the direction of partisanship, campaign promises and big money.  Recall the Wersal case to the Supreme Court.  Full-fight elections would be a bad way to go.  The beauty of the impartial court system is that when and if we show up there we will get a fair hearing from someone who has not already announced their position on certain issues.  Compare this to legislative elections where that's exactly what we want. 

In response to the increased conflict in judicial elections, there are current efforts to move Minnesota to a retention election system.  All candidates would be appointed by the Governor and all candidates would be subject to periodic retention elections.  The public would get to vote yea or nay on keeping the judge.  If a majority votes nay, the Governor would then need to pick a new candidate. This system would preserve public input, but would keep the current relative low profile of judicial elections.  Whether this method goes forward should be a matter of clear and open public discourse, though it seems a sensible compromise.  One thing does seem clear though:  expensive, partisan and bitter judicial elections will do nothing to promote public confidence in the quiet branch.  That's not the Minnesota way.

 

Live Theater and Medical Technology, or Why We Should Lose Silicon Valley Envy

Posted by: Ernest Grumbles III under Society Updated: March 10, 2010 - 1:47 PM

In our evolving post-employment culture, there are vigorous debates about what conditions are needed to promote entrepreneurship – quantity of talent; quality of ideas; access to risk capital; culture of innovation; public-private cooperation – and the list goes on. Inevitably, the conversation turns to “How can we be more like Silicon Valley?” - with its abundant and well-publicized startups, venture funds and innovation cheerleaders (Graham, Andreessen, Kawasaki, Bianchini…). This is true even in places that themselves are widely regarded as innovation hubs, like Boston (supposedly left “in the dust” by the Valley).  

The short answer is, no, you can’t be Silicon Valley. It’s a confluence of great brains, great weather, great money and luck. But rewind the clock back to 1950, and there was no Silicon Valley. So we’re mistaking directional success with inherent virtue and value. If you were alive in 1900, you’d be bemoaning the industrial might of Pittsburgh and Cleveland (which themselves are re-emerging with transforming economies). Nonetheless, this is the trend that we’re stuck with. Some parts of the country are doing better than others. Some are taking better steps to prepare for the next economies. Some have a better street-level entrepreneurial culture than others. It’s a dynamic, but playing out with real consequences for real workers/business owners/investors.
 
Now ignore the previous paragraph and remember that the only garden that you can grow is the one you’re in. So if you want to go west, head west – if you can afford it (and if you can handle mudslides, fires etc…). If you want to stay, look down where your feet are. Then look around. There are no civil wars in the countryside, the police generally keep order, the politicians are generally honest and we’re generally helpful to each other. We have amazing schools, amazing culture and amazing businesses (large and small). On any given day, there are likely more than a billion people around the planet who would be happy to switch places with you. 
 
Assuming then we can be thankful to be here and avoid Silicon Valley envy, we need to regularly recognize what we do have that works here at a world-class level - and learn from, and leverage, that success. Here are just two examples – live theater and medical services/technology.
 
The Twin Cities has the largest amount of live theater per capita after Manhattan (by ticket sales). We have over 100 venues to watch live theater (not including schools/colleges) and in every shade and stripe from repertory to avant-garde to community – urban, suburban and rural. We have the nation’s only real playwright advocacy organizations (the Playwrights’ Center) and perhaps the nation’s best repertory theater (Guthrie). Playwrights move here to get a chance to air their works and find support. This is true for a pursuit that typically yields little money or fame. 
 
In other words, we are the Silicon Valley of live theater. It’s organically successful and people around the country (and world) know it. With all the dramatic engines fired up, we are churning out tons of new works. And frankly, some of it may be crap. But so are many of the startups out of the Valley (remember the Dot-Bomb). Then again, you need this race to get the best stuff out on top. Imagine if we had 100 street-level innovation centers and laboratories just in the Twin Cities, dynamically developing and demoing new technologies, sharing ideas, seeking creative input and criticism and launching startups. 
 
Minnesota’s stature in medical services and technology is a great legacy of care and innovation. We have a world-famous medical clinic that sheiks come to (Mayo), the company that pioneered the battery-powered pacemaker (Medtronic) and the institution that launched open heart surgery (University of Minnesota Medical School). The Mayo and the U of M legacy has spawned a raft of local innovation such that the Twin Cities is a world-class medical service and device hub. Like playwrights, medtech entrepreneurs come to Minnesota to launch new enterprise – because there is a deeply supportive community of financiers, startups and successful companies. 
 
In other words, we have the brainpower, the money, the creativity and the legacy to support and launch world-class innovation. As with the blossoming tech scene in New York, we need to anchor around our strengths (medical, food/grain, information technology, culture) even as we push into new spheres.  And we need to see new business and technology for what they are - inherent and important parts of culture and human life – and keep the juice (and money) flowing. When we’re present to, and nurture, our local innovation, we’ll be too busy and creative to wallow in self-doubt – and that’s a fun spot to be.   

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT