IPWatchdog.com is in the process of transitioning to a newer version of our website. Please be patient with us while we work out all the kinks.

Google Classroom and Picking Economic Winners and Losers

Closed AmericaMy daughter is a senior in high school. Today she asked me to print a paper she had written and forwarded the link to me. The link was to an eLearning application called Google Classroom.

I worked for Dell in the late 1990’s when the internet was still young. I was an HR guy and eLearning companies were just starting up and peddling their wares. I took part in evaluating many of these systems. There were dozens of companies each with some twist that solved a problem or created an efficiency in training employees. None of them were Google. In fact, Google didn’t exist at that time.

Google ventured into eLearning around 2011 but formalized their effort with the announcement of Google Classroom in May 2014. And why not? According to Global Market Insights, “E-learning market size is was valued over USD 165 billion in 2015 …” And it was a good decision. According to Boost eLearning, Google has “… an astounding 41% growth rate, which has actually started accelerating in the past year. Maintaining this rapid adoption of Google Apps for Education would result in 110 million users by 2020.” Certainly, there is a lot of money to make in eLearning. Google knows this.

So why is the high school in my little blue collar town using Google Classroom and not one of these companies that pitched to Dell in the 1990’s? I think the answer lies in how the government is picking the winners and losers of the internet.

eLearning technology is the type of technology that is likely to be invalid as an abstract idea under Alice. After all, education has been around for centuries and just adding a computer to it does not make the system patent eligible, or so a few misguided federal judges have decided.

Most of the eLearning startups in the 1990’s had patent pending technology. They were founded by educators, software engineers, corporate HR folks and others who understood the intricacies of learning, most of whom were not independently wealthy. They bet the farm on a new unproven market. They filed for patent protection for the twists they invented under the impression that patents would help them attract the capital and would keep competition at bay long enough to establish their space in the market. They had no idea what was to come.

Over the next decade, the Supreme Court would eliminate injunctive relief and then for all intents and purposes, invalidate their patents first under Bilski and then under Alice. The courts also changed the way claims were written, thus invalidating thousands of patents retroactively. The America Invents Act’s PTAB procedures are now invalidating nearly 90% of all patents they evaluate. The courts also radically reduced damages for patent infringement.

Whether their patents were specifically invalidated or not is a distinction without a difference. The effect is that they are. If you are small and don’t have a spare couple of million dollars, the decision to defend a patent is made by contingent fee attorneys and investors who have the time, experience and money to put at risk. These professionals base their decision on risk versus reward. The government increased the risk that a patent will be invalidated to astronomical levels and at the same time radically reduced damages. There is no longer economic incentive and most contingent fee attorneys and investors either avoid what are often called software inventions like eLearning, or have left the patent business altogether.

To put eLearning to scale, I did a quick non-scientific search at the USPTO. When using “educational AND student AND school AND online” there are 644 patents and 44184 applications. By any measure, this is a very low number of issued patents given the huge number of applications. I suspect the bulk of the pending applications are in perpetual examination and appeal at the USPTO, or have been abandoned due to an unending supply of rejections by the examiner.

Is this the government picking economic winners and losers? Absolutely. And that shows clearly with the meteoric rise of Google in the eLearning space. Google need not be concerned with any potential eLearning patents. There are no injunctions so if they steal it, they keep the market. The odds of an inventor being able to defend patent rights are slim at best. If it is defended, the inventor will be litigated into oblivion and in the end the patent will most likely be invalidated. On the outside chance that the patent survives a potential five year battle with the PTAB and few more years in court, and infringement is actually proven, then an English major in a robe will decide the economic damages.

For most inventors, there is little or no way to defend patent rights. So the coast is clear for Google to enter the eLearning space. It is likely that no Google engineer did a search at the USPTO to see what property rights they might trample. Most large multinationals have internal policies directing their engineers to avoid patents and to never search the USPTO. This helps when they are sued to avoid treble damages by appearing unaware they stole someone else’s property.

Google certainly has the horsepower to drive themselves into the number one position in the eLearning market. They have at least one of the world’s best known brands and are one of the wealthiest multinational corporations on the planet. No inventor today can compete against the likes of Google based solely on their market presence and deep pockets, at least not without a defendable patent. And now that a patent cannot be defended there will be no investment to start the company up and none to defend the patent rights. The winner is picked. The government chose large multinational corporations over small inventors.

Picking winners and losers does not come without problems. Large multinational corporations by and large do not invent new products. They commercialize for profitability. That means their main focus is driving costs down and manufacturing/distribution capability up. Instead of inventing new stuff, big multinationals buy up successful startups after they have proven the market. The multinational then commoditize the product. Inventing new stuff for new unproven markets is not what they do.

With China strengthening its patent system, the task of inventing is moving to China. Already they lead the world in new patent filings and we will start buying stuff invented there more and more over the next couple of years. What fools we are.



Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Join the Discussion

12 comments so far.

  • [Avatar for EG]
    December 20, 2016 09:01 am

    Hey Paul,

    A very nice, thoughtful, and poignant article. I’m certainly with you all the way on your view here. I only wish (sadly) that SCOTUS, our Congress, our President-Elect, and the American public at-large would realize that keeping America’s competitive advantage means fully supporting the valiant and extremely risky efforts of you David’s of innovation, not the multi-national Goliaths like Google.

  • [Avatar for Inventor Woes]
    Inventor Woes
    December 20, 2016 09:13 am

    I wouldn’t worry about China just yet. It’s still in the “copying” phase of its development. It hasn’t reached the “actual progress forward” stage.

  • [Avatar for Stuart Saunders]
    Stuart Saunders
    December 20, 2016 09:52 am

    Nothing has changed since the USs’ best inventor was hounded to death by his ‘best friend’* – who stole his inventions, then advised his own competitors to also steal said inventors inventions.
    R.I.P., EHA.

    *Best friend wanted to buy the invention, on the condition that inventor deny his own inventorship; so ‘bf’ just stole it.

    Inventors; got a good idea? Here’s a better one, take two aspirin & have a good lie down; hopefully you’ll feel better in the morning.

  • [Avatar for step back]
    step back
    December 20, 2016 03:13 pm

    Inventor @2 re China “still in the “copying” phase of its development.

    Sadly you are woefully wrong.

    Re-read the fable of the tortoise and the hare.

    America snoozes (and loses) while many others move ahead.
    We aren’t the great again exception that we believe ourselves to be.

  • [Avatar for angry dude]
    angry dude
    December 21, 2016 12:06 am

    “Most large multinationals have internal policies directing their engineers to avoid patents and to never search the USPTO.”

    This is what is written in some bs documents and what they tell the public but not what they actually do in private

    Trust me on this – they do search PTO and all other sites A LOT (not from corporate IP addresses)

    Their patent infringement exposure is of catastrophic proportions right now and they know it but will never tell

    “Efficient willful infringement” is the name of the game in today’s SillyCon Valley

    Heck, why all the fancy words ? Call it “quiet stealing” cause that’s what it is

    Just watch HBO’s “Silicon Valley” – although the show creators decided not to touch patents but you will get an idea of what it’s like to be a small startup with something valuable for larger company – patented or not

  • [Avatar for angry dude]
    angry dude
    December 21, 2016 12:36 am

    “…and we will start buying stuff invented there more and more over the next couple of years”

    I second this 100%

    About 6 months ago I came up with some excellent technical idea in Virtual Reality technology related space: no analogs in US or anywhere – I searched up and down
    I was sitting on this for a while pondering if I should file patent application first or forget patent altogether, keep as much as possible a trade secret and try to get some investors interested…

    Couple weeks ago while doing google searches I saw quite similar idea being developed in a new product by a small high-tech startup from ….. Beijing, China

    Not by Google, not by Facebook’s Oculus, not by US-based startup,
    but by some very smart US-educated kids in Beijing, China
    they have web site and YouTube channel and it’s mostly Chinese like they don’t even care about US anymore

    What a shame (I mean for USA)

  • [Avatar for Jack Smith]
    Jack Smith
    December 21, 2016 06:12 am

    Have you used Google Classroom and/or a Google Chromebook? I have eight kids and our schools switched from using iPads and I believe Pearson software.

    It is like night and day. As a parent I absoultely love the Google school software. It is so much better than before.

    First, I am a huge fan of keyboards even at very young ages. In our house my kids knew how to use a keyboard before they knew how to type. So our school was all iPad and then 3rd grade and below with above Chromebooks.

    They now start with the Chromebook in kindergarten and no iPads.

    The Google Classroom software is a huge plus for parents. We can see all our kids broken down into Google Sheets.

    But it is the analytics that I am most excited about. Kids perform very differently depending on fit with the teacher. I love our school now having the analytics to better fit kids with teachers throughout the K-12 experience.

  • [Avatar for angry dude]
    angry dude
    December 21, 2016 10:19 am

    Jack Smith @7

    Just wait a few years

    soon enough google will implant little chips in your kids brains to control them all the time and turn them into happy and placid little lemmings to play nice with each other, their school teachers and with google of course

    gotta love google

    don’t be evil

  • [Avatar for Mike]
    December 21, 2016 10:42 am

    Very insightful! I stumbled onto my own E-Learning today! That said, as an educator, I can tell you this all has little to do with why your daughter is interfacing with Google Classroom. It’s simply an organizational shell that offers no content and, most importantly, it’s free. My district is one of the largest in the country, but teachers are using it because it doesn’t cost them anything. We’re overwhelmed with the amount of e-learning offerings, some of which are go, others are not. The Google Classroom phenomenon, at this point, is based on what it isn’t (content/dictating what/how to teach) and on it’s cost point (0). That said, it is clearly an attempt by Google to engage as many people as possible into its overall ecosystem, to be certain! Thanks again for the great post, though!

  • [Avatar for Night Writer]
    Night Writer
    December 22, 2016 10:00 am

    This is really a great post. Google’s position seems to be to rid the world of all IP so that they can monetize what is there for their purposes.

    I would point out too that very little of what Google has done has been innovative after the first year or two. The Android, maps, etc. has mainly been lifting other people’s work and using their monopoly power to plow through them.

  • [Avatar for N/A]
    December 22, 2016 10:11 am

    Dear angry dude,

    Yes your are certainly correct about engineers that work to avoid patents, because I was one of those engineers who did exactly that many years ago. It was for different multi-national corporations.

    From all that experience, I don’t advise people to patent right away but only do a provisional to feel the waters, if they really want to head that way.

    I spoke with a patent attorney recently this year about an invention I had. I decided against any patent for my invention. Trade secrets and Non-Disclosure is the way to go for me.

    This is my 2 cent opinion.

  • [Avatar for angry dude]
    angry dude
    December 22, 2016 04:15 pm

    N/A @11

    Unfortunately trade secrets don’t work in every field

    While you can obfuscate compiled code or even use hardware based encryption/decryption, you just can’t hide e.g. internals of mechanical devices or electrical circuits (not asics) – those can be reproduced in a matter of days if not hours by a skilled reverse-engineer

    And NDAs aren’t worth the paper they are written on