Patents & Ads & Time, Oh My!

A trio of items caught my eye today, beginning with a CNet article on the perennial debate over whether patents aid or inhibit innovation, particularly in the realm of technology. Patent debates are a recurring theme in American business history, but the issue has sharpened in recent years as these 20-year-legal monopolies have been applied to software, Internet and biotech developments.

In “Staking a Claim,” CNet’s Michael Kanellos brings this debate current in what struck me as an interesting and thorough examination of whether patents are allowing little guys to protect ideas and gain funding for startups, or whether they are being misused by large companies and patent mill firms.

This is a subject I’ve covered in the past, and two things strike me as important. First, the trend seems to be toward extending patents to new areas. I was among the reporters who covered the 1993 fracas over the Compton’s Multimedia Patent. It was eventually reversed but while the anti-patent forces won that battle, they seem to be losing the war. Part of the reason, I think, is that the federal courts were reorganized in 1982 so as to create a special circuit that hears appeals on patent trials. This special circuit has generally strengthened and extended patents, allowing, for instance, the patenting of human genes. Arguments could be and have been made that patents in some areas are counterproductive, particularly as regards software and Internet processes, where ideas can spread with viral rapidity and where IP laws may be anachronistic. But the federal courts seem so far persuaded that patents continue to perform their function, as spelled out in Article One, Section Eight, of the U.S. Constitution, “To promote the Progress of Science and useful Arts.”

Moving quickly to advertising, the mother’s milk of media, a New York Times article highlighted a debate among the ad buyers who indirectly underwrite most content — does their spending produce results, or is it money wasted and how do they discern the difference? This angst is being worked out in a forum called the 2005 Marketing Accountability forum, and while we may despair of hearing a definitive answer, the Times articles suggests that old media have more to fear from this debate than new media, which allow greater measurement of click-thru and the like. However, as I’ve written in the past, I’m not so sure click-thru rates tell the complete story online. I think advertising in any medium is likely to have a subtle and accretive effect rather than a directly measurable stimulus-response loop. But it’s difficult these days to argue with numbers, and new media have numbers coming out the wazoo.

Lastly and most puzzlingly is a finding by the Online Publishers Association, which tracks how much time Internet users spend each month pursuing activities in four various online categories: e-commerce, content, communication, and search. The association was pleased to report that browsers spent more time perusing content in June than in previous months, and less time engaging in e-commerce or search. Communication, though, still accounts for the largest single block of time spent online (41.3 percent for commo versus 36.9 percent for content, followed by e-commerce at just under 18 percent).

But when I checked out the association’s index, which listed the raw figures, I was puzzled. Search accounted for just 4.3 percent of online activity in June as measured in time, yet I have seen elsewhere that search firms are getting something on the order of half of all the advertising dollars being pumped into cyberspace. Now I have always heard that “time is money.” But in this instance it’s obviously not. Perhaps not all time is created equal. Or it may be that too much in advertising is being lavished on search, click thru numbers notwithstanding. But I wouldn’t worry. There’s probably a patented algorithm in the pipeline that will straighten all this out.

(Note: Paid Content pointed me to the patent and ad items; MediaPost alerted me to the Online Publisher announcement.)

Tom Abate
‘Cause if you ain’t Mass Media, you’re Mini Media