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Crowdsourcing Patent Research: $2 Million in Reward Money


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: February 7, 2012 @ 10:55 am
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Article One Partners (AOP), the world’s largest patent research community, earlier today announced that the company has achieved a significant milestone — more than $2 million dollars in financial incentives to its global research community. This milestone comes 11 months to the day from when Article One announced that they had reached the $1 million award milestone.  The company has been in business since November 2008, which means the company took approximately 27 months to pay out its first million.  There is no doubt that the brand of crowdsourcing for prior art patent research pioneered by AOP is gaining in popularity.

Back in November 2008 I was highly critical of the AOP model, writing that I just didn’t think it would work.  At that time I wrote, in part: “While there is nothing wrong with paying to collect prior art references there is an extreme lack of incentive in the Article One business plan because the criteria for awarding the bounty are subjective and ambiguous.  Furthermore, rather than paying a bounty the far better model is to hire competent researchers…”  There will always be a place for hiring trained patent searchers, but the proof is in.  I couldn’t have been more wrong about the AOP business model.

Luckily, however, AOP President Cheryl Milone reached out to me to chat about the AOP model.  I was impressed with Milone and the fact that there were objective criteria put in place.  At that time she told me that when potentially promising prior art is submitted it would be reviewed by independent experts and their decisions would determination who received the reward. My conversations in the early days of AOP with Milone lead me to in December 2008 write: “I have a feeling that Article One might be more successful than I orginally anticipated…”  Nevertheless, I still wondered if a model based on volunteers who might get paid would really work.  Sure, it could work in some situations, but would it ever work enough across the board to provide a sustainable business model? 

Of course, the Article One business model has been sustainable and only seems to be gaining steam.  I spoke with Milone again yesterday and we discussed my early opinions of the company.  She has told me on more than one occasion I gave her extra incentive because of my skepticism.  She never says “I told you so,” but she is justifiably proud of the accomplishments of her researchers and her internal team.  She well could say “I told you so,” and she probably should. 

During my discussion with Milone I asked her what she thought the AOP secret to success is, to which she quickly responded — “our researchers.”  Milone went on, ” You build a platform and you really don’t know what that platform is going to provide.”  What the Article One platform has provided is a globally connected group of highly motivated individuals, many of whom are able to work full time doing patent research.  In fact 8% of AOP reward winners make more than the average U.S. annual income every year.

Witness Stacey Anderson-Redick, the AOP researcher who achieved the reward that pushed the AOP payout over the $2 million threshold. 

“I signed up with AOP back in 2008, and the initial $50K reward certainly drew me. But even though I didn’t really think I had a chance at the big prize, I thought the “treasure hunt” itself would be fun and intellectually challenging,” Redick-Anderson explained.  “The rewards for my time and effort eventually did have a monetary value – researching for AOP is now my full time job.

It is undeniably correct to recognize that the AOP researchers connected through the unique AOP platform together make up the “secret sauce,” but there is far more to it in my opinion.  The company philosophy is what holds everything together.

Marshall Phelps, a Member of the Article One Board of Directors and former high ranking attorney with both IBM and Microsoft, told me in March 2011: “Our job is to be ruthlessly agnostic…”  What did he mean?  AOP doesn’t care where they find prior art that will invalidate a patent or not.  What they care about is a rigorous process.  Phelps explained: ““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 ask me it is the fact that AOP is “ruthlessly agnostic,” as Phelps put it, that is the secret to their success.  After all, paying a reward for prior art wasn’t a new concept.  There had been patent bounty hunters before, all of whom failed.  So why would AOP be different?  That was my question back in 2008 and the answer now seems clear.  AOP researchers are not a bunch of patent busters hell-bent on destroying patents.   Likewise, the AOP platform is not one that facilitates patent busting. I suspect that if the corporate philosophy of AOP were that patents are evil they never would have gained traction and wouldn’t be taken seriously.

Sure, prior art that will invalidate claims is found by AOP researchers, but sometimes no invalidating prior art is found, which can be equally important to know for all sides in a dispute.  If you exhaust all conventional patent search and non-patent literature search means you have a piece of critical information.  If you also then exhaust the AOP network of 10,000+ active researchers distributed across the world then you can indeed say that no stone has been unturned.  If nothing is found that makes the patent claims all the more valuable.  So the value proposition is not grounded in a fundamental hatred of all things patent, as was at least the perception with previous “bounty” arrangements.  The AOP value proposition is in an exhaustive search that leverages the unique skill sets of a diverse and highly educated network of researchers.

According to Redick-Anderson she doesn’t really view herself as a patent buster, but when she does find prior art she feels as if she is “reassigning credit where it is due.”  But there are other times.  “On the other hand, when mobile app developers were threatened with a lawsuit, my “patent buster” superhero cape came out… I wanted to help those small developers keep their amazing ideas unfettered.”  Redick-Anderson pointed out that for her this wasn’t just an issue about whether Angry Birds might be facing extinction, but rather about “potentially lifesaving apps like Skin Scan, which helps to prevent deaths from skin cancer.”

Stacey Anderson-Redick with her ceremonial AOP Check hanging on the wall.

Substantively, AOP has a global network of more than one million researchers worldwide who excell at uncovering hard to find prior art for AOP’s clients. Researchers are financially rewarded based on the quality of their findings. To date, Anderson-Redick, previously full-time in the education market and now AOP researcher, has been awarded more than $75,000 in financial incentives.

“Beyond the financial awards and total control of my career, AOP allows me to work from home and take care of my two children,” stated Anderson-Redick. “I have incredible flexibility with my career and a dream job that challenges me intellectually every day.”

“The AOP community is a virtuous circle,” said AOP founder and CEO Cheryl Milone. “Our crowdsourced community of researchers takes the complications out of the patent system and is compensated for it based on merit. Many researchers’ lives are being changed in the process. The level of trust in the AOP community mirrors the optimism represented by the act of invention itself. I feel honored to be a part of this company and its community. “

Among AOP’s researchers are many scientists, technologists and academics, including Michael Risch, Associate Professor of Law at Villanova University School of Law. Risch specializes in patent law, intellectual property and cyberlaw.

“AOP provides me the opportunity to help companies and law firms make more informed IP-related decisions by uncovering prior art that can either substantiate or discredit patents, “ said Risch. “Beyond academic research benefits, I also experience financial rewards through the AOP business model.”  Yes, Professor Risch has been a winning AOP researcher himself.

AOP’s revolutionary approach to patent research is the new standard. AOP clients include 18 of the top 25 companies most frequently targeted by non-practicing entities (NPEs), according to data from Patent Freedom, and 30 of the Fortune Global 500. This is particularly impressive when you consider that just 11 months ago Milone told me that 22 AOP clients were in the Global Fortune 2000.

Clients come from industries ranging from telecommunications, automotive, biomedical and pharmaceutical to consumer electronics companies and premier international law firms.  While they undoubtedly also pursue conventional search methods the results of AOP research speak for themselves, which is no doubt why more and more of the largest companies in the world are turning to Article One.

Congratulations to AOP on reaching the $2 million reward milestone.

 

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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patents

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

7 comments
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  1. That Risch guy must be awesome! Thanks for the shout out.

  2. Yes, I hear this Risch guy is on top of things!

    -Gene

  3. Thanks Gene.

    Do you have the list, or a link to it, of the top 25 (or more) companies targeted (meaning actually sued?) by NPEs?

    Thanks.

  4. For those who would like to learn more about crowdsourcing and IP, Cheryl and three other luminaries in the field will be on the panel Crowdfunding/Crowdsourcing Inventions and the IP Challenges Thursday, March 29 at the upcoming ABA meeting in Arlington VA.

    Details here http://www.americanbar.org/calendar/2012/03/27th_annual_intellectualpropertylawconference/schedule.html

  5. Steve-

    Take a look at:

    https://www.patentfreedom.com/about-npes/pursued/

    This is a list of the most often pursued companies.

    -Gene

  6. I think the USPTO should offer immunity from all post-grant challenges to any applicant who submits the results of an Article One study or equivalent.

  7. [...] that Article One has reached the $3 million milestone comes only six months after reaching the $2 million milestone, which took place at the beginning of February 2012.  It took AOP 11 months to the day to reach [...]