Looks like much-maligned U.S. Patent and Trademark Office is getting into the holiday spirit and trying to make entrepreneurs swoon. After six years, the agency has suddenly decided to give Steve Rosenbaum, founder and CEO of Magnify.net, the gift he’s been waiting for—U.S. Patent No. 8,117,545, covering a hosted video discovery and publishing platform—complete with a Valentine’s issuance date.
It’s a “big thumpy one too , ” Mr. Rosenbaum told Betabeat over Skype. Thumpy? “Makes noise when you put in on the desk… thump,” he explained.
Considering Mr. Rosenbaum, author of “Curation Nation,” had to suffer through three rejections and two years of straight silence along the way, we say it should’ve come a bag of Sweethearts®, at least.
While consumers may not be familiar with Magnify, its video platform powers sites like New York magazine, TEDxTALKS, and Mediaite. It allows publishers to populate their sites with video from around the web and create their own video channels.
We talked to Mr. Rosenbaum, who was recently named entrepreneur-in-residence by the New York City Economic Development Corporation and also built the 9/11 Memorial iPad app, about why Fred Wilson calls patents “the Anti-Christ” and the three ways a company can respond once its been granted a patent.
Mr. Rosenbaum founded Magnify back in 2006, the same year Google purchased YouTube. “Web video was a mere trickle,” he said. “We had this idea that it would be a massive river.” In the early days, Magnify was preoccupied with the idea of discovery. “If there’s way too much video… and you want to find what you care about… what’s the technology to do that?”
“We came up with a word, and code, and a process, and wrote a pattern application while we wrote the code. The word was ‘curation.’ Video curation, to be specific. Then we waited.” Two years later, the PTO responded with an ‘office action.’ Mr. Rosenbaum called it “polite talk for rejection.”
So Magnify re-filed, narrowing its claims and honing the language. In 2008, it was rejected again. In 2009, more of the same. “No fun at all,” he noted. In the meantime, Magnify was growing. “The practice was starting to get traction, and the patent claims were getting more carefully worded.” The PTO’s response? “Two years of silence,” said Mr. Rosenbaum. “Yeah, your government dollars at work.”
According to Mr. Rosenbaum’s “patent guy,” who did much of the IP work for Akamai, Magnify had a particularly arduous road, until “ta da—we get notice of allowance, with an issuance day of Valentines Day (love that!).” To celebrate, Mr. Rosenbaum said he was going drinking for Social Media Week at Bowlmor Lanes.
But now, comes the hard part. “It means that we have to decide how we want to proceed,” explained Mr. Rosenbaum. “There are flavors—Patent Troll (ugh), Licensing (not predatory), Business Partnerships (always). This the conundrum.”
As he framed it, it’s almost a conflict of ideologies. “I believe in the freedom of innovation, and clearly the problem with patents is that they are little more than permission to sue. Which means the big pockets can ignore a claim of infringement, or suit up for battle. While the small startups end up paying the freight. This is why Fred Wilson calls patents the Anti-Christ.”
Magnify has never faced an intellectual property lawsuit, but having a patent means, “Revenue, partnerships, potential suitors—it validates our take on the space and gives us real running room…our investors are pretty darn pleased.”
Had Mr. Rosenbaum heard of fellow New Yorkers facing the same slog with the PTO? “No, but it’s a little like asking someone how much they earn—the whole patent topic is kinda hush-hush, which I think is crap.”
In the patent wars, startups are also expected to behave differently than corporations, he noted. “No one says that Google shouldn’t file a patent, or Apple, or Microsoft, or Amazon, right? But startups are told that patents ‘stifle innovation.’ So big companies buy patent portfolios from each other, trade them like baseball cards, and startups are told they should win on ‘traction,’ which is fine, but really for B2C tech, not enterprise.”
In enterprise, he explained, “You need to sell your service to big companies (not consumers) and they often can be your competitors… with the resources to compete and reverse engineer your tech.”
For now, he thinks startups have to operate by the those guidelines if they want to compete. “Don’t get me wrong,” said Mr. Rosenbaum. “If we all agreed to abolish technology patents, including the big players, that would be cool. But until then, I think we should all play by the same rules.”