Innovation-Based Technology Standards Are Under Threat

Our world faces challenges more intricate and abstract today than at any previous point in history. As these challenges grow ever more tangled and complex, governments and businesses strive to create innovative technological solutions.

Unfortunately, creativity is not a matter of will. And the need for solutions is not itself sufficient to bring them about. Innovation demands the proper conditions — a balanced mix of flexibility and stability, spontaneity and forethought, risk and return. Increasingly, these conditions are under threat from the very institutions that have come to rely most heavily on the technologies they produce. The patent system and the standards system — two vital contributors to U.S. economic growth and consumer prosperity, that have together kindled a generation of unparalleled technological advancement — are being wrongly targeted by regulators, academics, and special interests as impediments to future progress.

A movement has taken hold in the United States and elsewhere to reduce the benefits of patent protection and to limit royalties available to technology inventors who contribute their innovations to industry standards.1 This movement has gained traction in courts, universities and boardrooms based on the mistaken belief that inventor protections increase the cost of standards-based consumer technologies. In fact, the opposite is true,2 and public policies aimed at weakening the patent and standards systems risk stalling the pace of technological advancement.

It is far from granted that technological progress will continue at recent rates. The social, regulatory, and financial headwinds faced by inventors intensify every year. Absent the legal and economic conditions required to continually foster innovation, there is no reason to believe technological progress will continue at any particular pace, and serious cause for concern that the promises of the fourth industrial revolution will go unfulfilled.

Take the extraordinary potential of 5G wireless systems — steadily moving from the abstract promise of “next-generation” technology to concrete and widespread use — to connect drivers with roads and other vehicles around them, to connect patients with medical practitioners, and to digitize industries across a vast spectrum of commercial endeavors. Shared industry standards are necessary to make these communications instantaneous, reliable and secure, but their future is threatened by an economic and regulatory system that increasingly favors technology implementers to the detriment of technology creators.3 Companies like Ericsson and Nokia,4 leading innovators of 5G technology, have seen their licensing revenues and profits fall dramatically in recent years, due in large part to nonpayments from implementers and various government enforcement actions.5

The future of innovation — of smart, interoperable, and interconnected products — demands a sustainable system of investment, which in turn requires reliable facilitators of capital. Patents and standards are two proven accelerators of industry, and yet each faces growing pressure from regulators and technology implementers. If society is to benefit from a future of economic growth fueled by technological innovation, careful attention is required at the delicate interface between the patent and standards systems. An objective and informed balancing of the true costs and incentives of innovation, coupled with an appreciation for the exceptional opportunities for collaboration and growth made possible by patents and standards, is necessary to ensure that the inventors we have come to rely on have the resources they need to continue delivering on their potential.

Despite the truly profound societal interest in preserving incentives for technological investment, popular discussion of patent rights and standards is limited. This is because consumers are generally unaware of the process of value creation in high technology industries. Device manufacturers are customer-facing, so their contributions are readily recognized. But the inventors who enable device-level innovation through their contributions to underlying technologies go unseen, and their contributions unappreciated. Indeed, consumers often mistakenly attribute the technological achievements of modern devices to the device makers, when much of the credit should go to the inventors who create the foundational technologies from which the devices are built.

Consider the modern smartphone. The brilliant display, high-resolution camera, and full-motion video capability are all attributable not to the device manufacturers, but their upstream suppliers. And these tangible features are, themselves, useless without the profound innovations in cellular communications and processors required to run them — innovations generated by earlier inventors.

The underappreciation of upstream innovation becomes apparent where innovation is brought to market through industry standards. Once products that implement a given standard are put on the market, the only way inventors can receive compensation for the use of their inventions included in the standard — and, therefore, the only way inventors can realize a return on their substantial investments of time and money — is through the receipt of royalty payments. In contributing a technology to a given standard, and thus foregoing patent exclusivity, innovators surrender every other viable revenue opportunity. Unlike companies competing on nonstandardized products, innovators in standards-based industries cannot recoup research and development (R&D) expenses by simply raising the prices of the finished products they sell. This is because standards-based innovators, such as InterDigital and LG, sell in price competition with standards-implementing manufacturers, such as Apple and Samsung, who place comparatively fewer resources at risk to create the standards their products implement. These competitors have a dramatically lower cost basis and do not need to make up for time and money spent innovating. Yet they are able to enjoy and exploit the underlying product improvements resulting from the work of the inventors who created and contributed the standardized technologies.

The problem inventors face in recouping their investment costs is compounded by the fact that, in order for technologies to be included in a standard in the first instance, inventors must both disclose the technologies to industry groups and commit to license them on reasonable and nondiscriminatory terms to anyone manufacturing devices practicing the new standard. Such disclosures and commitments necessarily occur years before any product embodying the new standard will reach the market, meaning that new technologies are available for implementers’ use well in advance of making royalty payments on them. During that period, manufacturers and consumers forget the importance, desirability, and value of the standardized technologies and discount associated patents and compensation accordingly, while economic, judicial, administrative, social, and competitive pressures force inventors to accept royalty rates that are unfair. The current remuneration paradigm thus involves a fragile “give now, get paid much less, much later” dynamic with respect to intellectual property. And as royalties are the only means of compensation for inventors, this dynamic can render inventors unable to access the capital they need to continue inventing, stalling the cycle of innovation.

Leadership in Innovation Requires Incentivizing Innovation-Based Standards

“Innovation-based standards,” such as Wi-Fi, Bluetooth, and 4G LTE, are standards that incorporate truly inventive technological advancements, enabling implementers to build products that do more than simply follow convention. These standards represent technologies unequivocally superior to those previously available. The natural desire of device manufacturers to acquire these technologies at their lowest possible cost is at odds with the sound public policy of incentivizing investments in innovation and the contribution of innovations to standards. It pits a short-term gambit by implementers of standardized technologies to pay less than the value they receive against the inevitable long-term consequence of inventors of standardized technologies disappearing in the face of poor returns on their sizable investments in innovation.

Implementers who would restrict the ability of innovators in standards-reliant industries to recover reasonable royalties are building profitable businesses on a technological foundation to which they made no contribution. For instance, the best empirical research to date6 suggests that royalties on the sales of most mobile phones on the market today are around 3% or 4% — pennies on the R&D dollar. What certain implementers seem to be pushing for are completely royalty-free licenses. They are, in effect, standing on the shoulders of giants while striking them at the knees. And such “short-term win, long-term lose” scenarios rarely make for good public policy.

Companies that make massive investments in R&D to generate the modern wonders of the digital world, then willingly share their hard-won successes through standards for the benefit of all industry participants and consumers, offer prime value in what is perhaps mankind’s most constructive and nuanced form of commercial activity. These innovators should be celebrated, encouraged, and rewarded. They cannot be expected to sacrifice their innovations in return for vanishing economic opportunity. Resolute leadership in championing innovation-based standards requires the careful crafting and honoring of incentives that recognize the critical role, and yet perilous position, of innovators. Leadership in this context means resisting the efforts of standards-implementing manufacturers to take without paying, supporting policies that enable innovators to receive fair compensation for their contributions, and attaching significant consequences for those who fail to pay for the standards-based innovation from which they seek to benefit.

With innovation-based standards bringing unprecedented value to our economy, U.S. policy makers must recognize what makes these standards so valuable: voluntary contributions of technology by innovators who invested much in the creation of that technology. To pursue policies aimed at rewarding and encouraging these innovators is to add impetus to the highest order of human enterprise.

MIT Sloan Management Review

Zoho bringing IoT under CRM to expand benefits

Zoho Corporation is planning to expand its offerings from SaaS to the Internet of Things (IoT) under its Customer Relationship Management (CRM). The company has integrated WebNMS, a division which has been working on IoT, into Zoho as part of integrating its offerings. The new offering will target industries including automotive sector.

Sridhar Vembu, CEO of Zoho informed media that the company would be looking for small tuck in acquisitions as the global SaaS industry is moving towards consolidation.  The company last year launched an integrated offering under Zoho One. This currently offers all its 40 suits as a bundled product and this has boosted its growth projections.

Sharing an example, he explained how IoT integrates with CRM. Suppose somebody sells you an air-conditioner, they want to know how well the unit is doing and need to send a technician if there is some problem detected. IoT becomes the centre of the CRM strategy. That is how WebNMS technology gets integrated into the CRM.

Automobile is one of the key vertical for Zoho. It has already launched a product for the automobile garages, named as Auto Garage CRM. It is signing in with garages for this product. It does not look like a CRM, but a job card system, which is built on Zoho CRM. Eventually, the garages will have an ongoing relationship with the customer.   Read more…

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TRAI Chairman RS Sharma Brings IoT under Net Neutrality

TRAI’s recommendation on net neutrality comes days after United States Federal Communications Commission (FCC) led by Ajit Pai suggested plans to scrap landmark 2015 rules intended to ensure a free and open internet. The move is likely to give service providers a say on what content consumers can access. TRAI Chairman R S Sharma called for Internet, an important platform for India, being kept open and free, and not cannibalised. “No one owns Internet… so, it should be open and accessible to everyone,” said Sharma, suggesting that service providers should not indulge in gate-keeping of this important platform.

In its recommendations on principle of non-discriminatory treatment, TRAI said, “A Licensee providing Internet Access Service shall not engage in any discriminatory treatment of content, including based on the sender or receiver, the protocols being used or the user equipment.”

Bringing Internet of Things (IoT) under net neutrality, TRAI said, “IoT as a class of services, are not excluded from the scope of the restrictions on non-discriminatory treatment. However, critical IoT services, which may be identified by Department of Telecommunications (DoT), and which specify the definition of specialised services, would be automatically excluded.”

TRAI has also stated that Content Delivery Networks which enable telecom operators to deliver content within their network without going through public Internet should be exempted.

The telecom regulator had earlier issued a consultaion paper for over-the-top service. In 2016, DoT had sought TRAI’s recommendations on net neutrality. TRAI has also dealt with the issue of differential pricing of data access.  Asked about the Indian regulator upholding principles of net neutrality when, in fact, US Federal Communications Commission has proposed to roll back net neutrality rules of 2015, Sharma said TRAI has kept the Indian context in mind while framing its recommendations.     Read more…

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Your online freedoms are under threat – 2017 Freedom on the Net Report

As more people get online everyday, Internet Freedom is facing a global decline for the 7th year in a row.

Today, Freedom House released their 2017 Freedom on the Net report, one of the most comprehensive assessments of countries’ performance regarding online freedoms. The Internet Society is one of the supporters of this report. We think it brings solid and needed evidence-based data in an area that fundamentally impacts user trust.

Looking across 65 countries, the report highlights several worrying trends, including:

  • manipulation of social media in democratic processes
  • restrictions of virtual private networks (VPNs)
  • censoring of mobile connectivity
  • attacks against netizens and online journalists

Elections prove to be particular tension points for online freedoms (see also Freedom House’s new Internet Freedom Election Monitor). Beyond the reported trend towards more sophisticated government attempts to control online discussions, the other side of the coin is an increase in restrictions to Internet access, whether through shutting down networks entirely, or blocking specific communication platforms and services.

These Internet shutdowns are at the risk of becoming the new normal. In addition to their impact on freedom of expression and peaceful assembly, shutdowns generate severe economic costs, affecting entire economies [1] and the livelihood of tech entrepreneurs, often in regions that would benefit the most from digital growth.

We need to build on these numbers as they open a new door to ask governments for accountability. By adopting the U.N. Sustainable Developed Goals (SDGs) last year, governments of the world have committed to leveraging the power of the Internet in areas such as education, health and economic growth. Cutting off entire populations from the Internet sets the path in the wrong direction.

Mindful that there is urgency to address this issue, the Internet Society is releasing today a new policy brief on Internet shutdowns, which provides an entry into this issue, teases various impacts of such measures and offers some preliminary recommendations to governments and other stakeholders.

Of course, this can only be the beginning of any action and we need everyone to get informed and make their voices heard on shutdowns and other issues related to online freedoms.

Here is what you can do:

  • Follow the live video stream of the launch event for Freedom House’s 2017 Freedom on the Net report. The Internet Society’s Vice President of Global Policy Development, Sally Wentworth, is among the panelists. (14 November 2017, 9:30 am EDT)
  • Ask people to spread the word that Internet shutdowns cost everyone.  Governments should stop using Internet shutdowns and other means of denying access as a policy tool: we must keep the Internet on. Tweet using #ShapeTomorrow and #NetFreedom2017. You’ll find more tweets on Internet Society’s Twitter account.

[1] Among other similar studies, Brookings assessed a cost of about USD 2.4 billion resulting from shutdowns across countries evaluated between July 1, 2015 and June 30, 2016.

Image credit: Sara Silva on Unsplash

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Tiny GPS Antenna Under The Players’ Jersey Boosts Tracking Performance

Tiny GPS Antenna Under The Players’ Jersey Boosts Tracking Performance

Here’s your daily newsletter showcasing the everyday worldwide developments including news & research in the field of Internet of Things (IoT) and connected devices. Following the links, you’ll know newest and hottest technologies and the important trends of this exploding world to keep you updated.

GPS Antenna Under The Players’ Jersey Boosts Tracking Performance

Ever wonder what are those things that players wear under their jerseys during practice? Well, that’s a GPS system for player tracking and analysis during their training and games to boost performance. One firm excelling in such GPS player tracking equipment, STATSports, recently said that it has chosen Taoglas’ GPS patch antenna for its Apex-line of sports performance monitors. This antenna is claimed to work even in the most challenging of situations and helps the device deliver location accuracy within 1 meter, and is hoped to eventually improve players’ performance. More details.

IoT Development Kit Enlivens India’s Smart City Vision

Geared for enhancing smart city development in India, u‑blox and IoT firm Atoll Solutions have launched an IoT starter kit for developing nodes and gateways based on LTE Cat M1 and NB-IoT. The starter kit is based on u-blox’s LTE Cat M1 and NB-IoT modules. Atoll’s spokesperson further noted: “narrowband LTE has the power to add affordable and reliable connectivity to a wide range of assets, creating truly Smart Cities through Smart Lighting and Smart Metering.” More details. 

One-click Parking Payment For Connected Car Drivers Made Easy!

In a bid to make one-click parking payments for connected car drivers easier, Tantalum is working with SAP to integrate SAP Vehicles Network into Tantalum’s Pay.Car end-to-end payment platform for connected cars. This will help drivers to find an available parking space quickly and pay securely without needing to find spare coins or load a separate app on their phone. In addition, customers will be better able to save time and reduce fuel consumption by navigating efficiently to an available parking space, thereby reducing harmful CO2 and NOx emissions, according to the announcement. More details.





Vodafone Joins Open-source Community To Ease Deployment Of Digital Home & Smart Gateways 

In order to foster innovation in the digital home and smart gateways, mobile giant Vodafone is working together with open-source IoT consortium prpl. The firm hopes that open-source software and open standards will accelerate the harmonisation of software platforms for the deployment of in-home devices like routers. More details. 

Have Fun Chatting With Your Home Appliances On Your Mobile Messenger!

Smart home appliances equipped with features such as LG HomeChat and SmartThinQ will be introduced in India this year, LGEI recently said. This will enable consumers to control and operate home appliances such as washing machine, air conditioners and refrigerators through smartphones. The company is in talks with several mobile network providers for data connectivity in order to connect different appliances to the internet.

Wireless VR To Storm Data Networks, Grow 650% By 2021!

Wireless VR headsets are all up in the news lately. According to a new report from Juniper Research, Virtual Reality (VR) headsets’ (both smartphone-based and standalone) data consumption will grow by over 650% over the next 4 years, from nearly 2,800PB (Petabytes) in 2017 to over 21,000PB in 2021, leaving data networks strained. This is said to be equivalent to a massive three billion hours of 4K video streaming! More details.


BeagleBone Green Wireless IoT Prototyping Kit Now Available! 

Seeed Studio’s BeagleBone Green Wireless internet of things (IoT) developer prototyping kit for the Google Cloud Platform is now available from Mouser. Together with and Google, the kit collects various types of sensors and actuators used in internet-equipped devices. The sensor and actuator modules are plug-and-play and fully compatible with the BeagbleBone Green Wireless Board. The kit includes built-in Wi-Fi and Bluetooth Low Energy(BLE).  More details.



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