Show Me the Money! Article One Reaches $1 Million Milestone
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog
Zies, Widerman & Malek
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Posted: Mar 9, 2011 @ 7:33 pm
In November of 2008, Article One Partners announced the launch of what they characterized as a new global community to legitimize the validity of patents. Community members, called Advisors, would have the opportunity to send in previously hard to find evidence that challenges the validity of high profile patents. It was believed that by tapping the knowledge of Advisors it would be possible to collect valuable publicly available prior art, particularly non-patent literature. I was initially quite skeptical of the plan, but it is hard to argue with results. On Monday, March 7, 2011, Article One Partners announced that it had surpassed the $1 Million milestone and has now distributed over $1 million in reward money to Advisors.
On the company blog Article One wrote:
We are proud to announce that Article One has now paid over $1,000,000 to our research community! For just over 2 years, Article One has been working with excellent researchers, and this milestone is an excellent indicator of the strength of our community. This marks a huge step for the company and community, and we plan to keep growing even faster.
My initial skepticism was based on the fact that previous attempts to offer a bounty for finding relevant prior art had failed and it seemed unlikely to me that what appeared to be a subjective approach to issuing awards would be successful. I wrote: “[T]his same type of bounty system has been attempted before, but has been unsuccessful because it is difficult to impossible to locate a single reference that would strike down an issued patent. Furthermore, because the criteria used to determine whether submitted prior art is worthy of a bounty is so subjective it would seem quite unlikely that such a plan will succeed.” With the benefit of hindsight it would appear as if I was thoroughly and completely wrong.
Shortly after my initial reaction I received a call from Cheryl Milone, the President of Article One Partners. She offered to try and change my mind by giving me more details. I took her up on her offer and we had our first of many conversations over the last two-plus years. As a result of my conversation with Milone in December 2008, I wrote: “I do get the sense that she and Article One are trying to do something quite valuable, so to the extent that any comments I may have made in the past question her or Article One I think it wise to retract those comments. I have a feeling that Article One might be more successful than I originally anticipated, and even if that is not the case at least they are trying to do something productive about the growing problem of bad patents. So I applaud Article One for the effort and wish them well.” If facts and measurables are any indication of reality this second impression is far more accurate, as borne out by the company reaching the $1 million milestone.
My change of heart in December 2008 was largely due to the fact that Article One Partners did have in place a plan based on objective criteria in order to determine under what circumstances to pay a reward. In fact, Milone promised that Article One would have submitted prior art references reviewed by independent experts and that would form the basis of their determination on whether to issue a reward. On top of that Milone seemed genuinely interested in running the business without any pro-patent or anti-patent agenda, but rather to just create a human infrastructure capable of finding the best prior art available. That alone would separate Article One Partners from some with an obvious patent busting and/or anti-patent agenda.
Leading up to the $1 Million milestone I chatted with Milone and this time Marshall Phelps, a Member of the Article One Board of Directors and former high ranking attorney with both IBM and Microsoft, joined our conversation. At one point in the discussion I asked: “When do you think you turned the corner to have people understand that you were not anti-patent?” I went on to observe that, at least from my vantage point, Article One is more like an umpire. I said: “You call balls when the pitch is outside and call strikes when the ball is over the plate. So many folks that operate in this space have an axe to grind, but it doesn’t seem that Article One has any axe to grind. That would seem to add a tremendous layer of credibility.”
Phelps responded: “We started out with a manifesto on that exact point, that we were agnostic. We didn’t care what the result was as long as it was an adequate result. It could be thumbs up, or thumbs down, or thumbs sideways. That is not our concern. Our concern is running the human network, if you will. Our job is to be ruthlessly agnostic because once we are not agnostic then the value proposition is gone.” Indeed, Article One Partners has conducted studies and found invalidating prior art, and they have run some studies where they have not found invalidating prior art, lending factual evidence to Phelp’s claim that the company is agnostic when it comes to outcomes.
It also is apparent from our conversation that while Article One Partners has historically been involved in studies seeking invalidating prior art, the future will see them offering a variety of other services, including due diligence services. Due diligence services seem a natural fit if you ask me. If there is a patent or portfolio that is a critical asset in a transaction what better way to guarantee (to the extent possible) that the claims are valid and strong?
The Article One network as it stands today is extensive and geographically diverse. They now have over 1 million researchers worldwide signed up on their platform, so when a study is initiated each of those researchers are notified. These researchers are located all across the world, with 37% in the United States, 37% in Europe, 10% in Japan and 16% elsewhere. In addition to this geographic diversity nearly 50% of researchers hold advanced degrees. So far approximately 10,000 researchers have actually submitted prior art references to a study and there have been 85 reward winners declared with winners coming from 15 different countries. Milone explained:
We doubled our community last year from the year before. We reach over 1 million researchers worldwide and we translate our studies into 8 languages. That has caused us to have successful researchers from 5 continents, including a successful researcher that we just had from Iceland.
On top of this, Article One is building its own team of internal researchers, with one of their top performing Advisors coming in-house. She explained:
One thing that we are doing a a company a well is trying to build an internal research team based on the highest performing researchers in our community. So, as an example, we had a gentleman who received over $100,000 from us within about a year timeframe and was just at the very highest level of work product. So we decided to offer him a job and he has come in as the community head of our research and is also now teaching his skills set to the community and we look forward to continuing that process.
But is Article One succeeding in attracting the attention of those who would utilize their services? After all, to be successful the work product needs to be something desirable. The answer, according to Milone, is yes. Business is growing and Article One has an impressive client base. Milone said:
On the client side we are at over 100 clients. We have 13 Fortune 100 clients. 22 of the Global Fortune 2000. We are involved in research projects directed to probably the most important litigations in the world. We have the NTP patents on the platform, an interval licensing patent, some of the telecommunications litigations, the patents from some of those litigations are also being researched on our platform. The breadth and success of what the community is achieving is demonstrated by our net promoter score. At the end of each project we ask our client if they would work with Article One or refer us again and in 90%+ of the time the answer to that question is yes.
It would seem that Article One Partners is growing and thriving, and that my initial reaction to the Article One Partners business model was incorrect. In fact, Article One Partners is likely just scratching the surface of its potential and demonstrating the power of coordinated crowd sourcing solutions.
About the Author
Gene Quinn is a US Patent Attorney, law professor and the founder of IPWatchdog.com. He is also a principal lecturer in the top patent bar review course in the nation, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam. Gene started the widely popular intellectual property website IPWatchdog.com in 1999, and since that time the site has had many millions of unique visitors. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, USA Today, CNN Money, NPR and various other newspapers and magazines worldwide. He represents individuals, small businesses and start-up corporations. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.