Monday 27 November 2017

If Uber turns to self-driving vehicles, what is to become of its brand?

Think of the sharing economy and Uber is usually the first company that comes to mind. What could be more appropriate than providing the infrastructure for the service, while the drivers supply their own vehicles. As the middleman, Uber simply brings together customers and drivers, taking a cut from the transaction. Even given the various legal issues and boardroom intrigues that have been plaguing the company, the fundamentals of the business model have remained unaltered, at least until now. But change may be on the horizon, as the company seeks to get ahead of the potential disruption posed by self-driving vehicles.

That is the gist of an article by Shira Ovide, published on November 20th as a Bloomberg Gadfly column. Ovide describes an announcement made earlier of last week, according to which Uber has agreed to buy from Volvo 24,000 SUV’s, meant to serve as the foundation for a future fleet of self-driving vehicles. The value of the transaction is approximately one billion dollars, with delivery to take place between 2019-2021. To some extent, the deal complements an earlier partnership transaction between Uber and Daimler, whereby Daimler will make its own self-driving vehicles available to the Uber network.

The upshot of the Uber-Volvo transaction is that Uber goes from being a mere middleman to the owner of substantial physical assets in the form of DUV vehicles. This carries with it all the obligations that come with owning a fleet of cars, such as readying them for daily use and maintaining such necessities as tyres and the interiors, all the while that the vehicles themselves will be subject to capital depreciation. According to the report, there are few details about how Uber ultimately plans to integrate these vehicles into its business.

In effect, the overarching question is: what kind of business model will emerge? It is true that a direct result of self-driving cars, if they take hold as a preferred means of transportation, will be that human drivers will be made redundant (although this blogger suspects that the transition to self-driving vehicles will be gradual and a certain sub-group of customers will continue to insist on human drivers). As Ovide has observed, will the company then seek to—
“make money by continuing to be a middleman for drivers and riders and for other categories including restaurant orders?”
Or will it simply—
“collect[] fees from rides, that looks more like Hertz than a traditional two-sided market place consisting of matching supply and demand?”
If the purchase of the Volvo vehicles presages (or even more, mandates) that the company will sooner or later need to reformulate its business strategy, then what does this say about Uber’s brand? Even within the current shared economy model, Uber has seen its operations effectively taken over in China by Didi Chuxing, while in some Asian jurisdictions, it is playing second fiddle (or no fiddle) to local competitors, such as Grab in Singapore. As for the US, competitors such as Lyft seek to nip at Uber’s heels.

But perhaps another way to view it as a bold attempt by the company to get ahead of the curve and remake its business model in light of the changes that will be wrought by self-driving vehicles. What comes to mind is Netflix, which began in the 1990’s as a DVD sales and rental business, before soon moving on to the DVD by rental business. When that model faced obsolescence due to the rise of video streaming, the company embraced the video streaming space that is identified with it today.

During each of these remakes, the company managed to enjoy the continuity of the Netflix brand as the badge of the company to the consumer public. Based on Uber’s current high valuation (Ovide indicates it is 68 billion dollars), there is both promise and risk in maintaining the value of the Uber brand in the face of a remake of the company’s business strategy. Stay tuned.

Thursday 23 November 2017

Tickbox TV: Concerns for Content Owners, Cable, and Silicon Valley

Tickbox TV provides a set top box, which allows users to access content on the internet.  Apparently, the device can be used to access and display copyrighted content, such as movies and television shows, through the use of Kodi (an open source media player) and add ons. Many content owners, represented by Munger Tolles & Olson, have filed a complaint for inducement and contributory infringement.  The case is somewhat similar to the classic Sony, Napster and Grokster type cases.  Joe Mullin of Arstechnica provides a very nice description of the case, here.  The Los Angeles Times recently reported on the ownership of Tickbox TV in an article titled, “How an Atlanta Power Couple’s Business Has Heightened Silicon Valley’s Piracy Anxieties.” 

I can understand the anxiety of content providers and some Silicon Valley companies.  As the Los Angeles Times article points out, Tickbox TV (with the software) is dangerous to some content owners (including those in Silicon Valley) because it operates similar to devices that some users may be more comfortable using—so, think of your technology adverse grandparents.  It is like plugging in a VCR.  This may also be a group of consumers who are paying “full price” for content and do not ordinarily illegally access material.  This should make cable and satellite services companies very concerned.  From the perspective of some in Silicon Valley, the case may lead to increased lobbying from content owners concerning stronger copyright protection depending on how the case turns out.  It appears that Tickbox TV is now receiving some counsel and is attempting to insulate itself from liability through the use of disclaimers. 

We are celebrating Thanksgiving in the United States today.  Happy Thanksgiving! 

Wednesday 22 November 2017

Evolution and Survival: Technology Transfer Offices

The Association of Land Grant and Public Universities has released a November 2017 report titled, “Technology Transfer Evolution: Driving Economic Prosperity”.  The report identifies numerous opportunities for technology transfer offices as the system matures.  Importantly, technology transfer offices should focus on general regional economic development.  In reviewing opportunities and providing examples of successful programs, the report also highlights obstacles.  In particular, the report examines, “Redefining Expectations of Technology Transfer Offices,” and identifies obstacles to a successful, revisioned technology transfer office that serves to promote local and regional economic prosperity.  The Report states:

• Many senior administrators, faculty, trustees, and alumni are primarily focused on the revenue generation potential of technology transfer operations and less on the societal benefits that can be reaped by moving intellectual property of all kinds into the marketplace, even those that may not result in immediate, high revenue returns.  

• For many institutions, economic development and engagement as a central mission component is new and has led to confusion regarding the roles and responsibilities of individuals and units involved, including technology transfer offices and related professionals. New outreach duties often require coordination across multiple campuses, schools, departments and units, which makes collaboration and reporting a challenge. Many technology transfer offices lack the adequate staff, training, or resources necessary to meet the evolving expectations placed on them in the context of economic engagement.  

• Institutions sometimes face difficulty in giving credit where credit is due, for instance, when technology transfer offices are sharing partnership development responsibilities with other units. On many campuses, technology transfer offices used to be the main externally facing office for the university in the realm of business and industry. This is often no longer the case, and the new reality requires a level of coordination that is not typical practice. Moreover, reporting lines and measures of success are not consistent across different kinds of university offices, and it becomes very difficult to execute strategic, campus-wide partnerships involving external audiences.

I’ve previously written on redefining goals of technology transfer offices, here.  In redefining technology transfer offices, I would focus on their role in promoting the education of students within the university.  It is important to remember that the primary method of university knowledge transfer is teacher to student--for sure, patents are important, but let's keep our eye on the ball.  The technology transfer office, in collaboration with faculty, can play an important role in providing valuable experiential opportunities to students--leading to potential employment opportunities.  This places technology transfer offices squarely within the "core" mission (and "business") of the university and fits them nicely with partnerships in academic units that run business clinics, for example.  It may even lead to fundraising.  

Tuesday 14 November 2017

China Changes Policy on Transfer of Technology for Market Access?

As previously discussed, China has been criticized for outright theft of trade secrets as well as requiring the disclosure of trade secrets to do business in China.  Keith Zhai, Bloomberg Technology, has reported in an article, “China Says Foreign Firms won’t be Forced to Turn Over Technology,” that a senior Chinese official has stated that market access in China will not require disclosure of trade secrets.  Notably, the article also states that China “pledged . . . to treat all companies equally" and the timing of the announcement came “close in time” to Trump’s exit from China.  It will be interesting to see if there are meaningful changes. 

Wednesday 8 November 2017

A pioneer in the world of university tech transfer to share his insights in a free webinar

IP Finance has been informed of an exciting free webinar that will take place next Wednesday, November 15, at 3:00 PM- 4:00 pm British Standard
Time. The topic of the program, under the auspices of OxFirst, will be "Academic Entrepreneurship & IP Management in Universities" and the speaker will be the distinguished Professor Graham Richards. Prof Richards was a founding member of Oxford University’s tech transfer office and a successful inventor, whose IP formed the foundation of a multi-million publicly traded company. He will talk about the core elements of turning science into business.

About the Speaker

Professor Graham Richards is a pioneer of British technology transfer. The university spin out that he established -- Oxford Molecular Group, was the first university spin out after the UK introduced a regulatory change that attributed the IPR generated in a university context to the university itself. Under the leadership of Professor Richards, Oxford Molecular Plc grew from a £350,000 start-up to a £450 million public company. He is also a founding member of the Technology Transfer Office of the University of Oxford and he was a director there for over 20 years. Another flagship project is the publicly traded company IP Group Plc. Originally created out of the necessity to attract further funding for the chemistry department of the University of Oxford, it is nowadays one of the most important investors in technology generated by universities. IP Group Plc is a FTSE 250 company with a market cap of £1 billion.

How to Join

Please sign up here with your professional email account. The program organizers will not accept a registration from a personal email address.

Tuesday 7 November 2017

Chemical Company Joins the LOT Network Against Trolls

Covestro, a chemical company which uses digital technologies to build better products, has joined the LOT Network.  As previously discussed, the LOT Network was started to thwart patent trolls.  Essentially, each member agrees to provide a license to the other members of the network if their patent is transferred to a patent troll.  Covestro’s press release states:

“With the convergence of the chemical industry and digital technologies, our sector has increased exposure to PAE litigation,” said Gilbert Voortmans, Vice President, Head of Intellectual Property Rights at Covestro. “Innovation is core to our business, and we feel it’s important to take a stance against anything that could interfere with the fair use of intellectual property.”

Interestingly, this is the first chemical company to join the LOT Network, according to the press release.  We’ll have to see whether other companies in industries generally thought not to be subject to troll suits will join the network, particularly as digital technologies influence almost all industries.  Moreover, I count around 170 members listed on the LOT Network website, including companies ranging from Alibaba to Crate and Barrel to Wells Fargo to Uber to Target to Honda. I wonder if universities should create something like the LOT Network to protect themselves from future suits by university based patents.