VR Hardware and UI/UX: The next big thing in design patents

Google Cardboard - High Tech that melts in the rain. 

The internet teems with articles giving you the "20 next big things in X" or "15 reasons why everyone should know about technology Q." However,  most of these lists are really slim native advertisements for companies hawking all manner of kit and not really instructive on what the next big thing is going to be in any industry.

Luckily, I am here to tell you what the next big thing is going to be in a particular industry. I had the opportunity to go to Maker Faire this past weekend and take in the sights and sounds of what a low pretense, high diversity Burning Man would look like it if was hosted in Queens and had easy subway access. Among the automated pancake makers and drone suppliers, I kept noticing that what really stood out was the prevalence of VR (Virtual Reality Gear). VR gear was everywhere, not only in demo booths, but also strapped to the slack jawed faces of noobs and experts alike, usually through some jury-rigged cardboard contraption (as shown above).

VR Gear itself is a ripe for intellectual property protection. Usable VR gear presents a number of engineering and UX / UI problems that, when solved are like patentable inventions. Furthermore, just as in the Smartphone Wars (TM), the industrial design of one product versus another might spell the difference between a record shattering Iphone and an also ran Nokia. As such comapnies are going to be aggressive in patenting designs for hardware. Companies like Oculus Rift (Facebook acquired) already have pending an issued design patents cover the form of their VR headsets, and their products have not reached consumers yet.  

Occulus Rift Issued Design Patent on VR Gear. 

However, hardware is, well...hard, and designs for VR Gear are likely to be refined within the walls of engineering and design studios with massive budgets and expansive teams.  Neither of these resources are going to be available to the nimble, cash strapped, start-up.

On the other-hand, VR GUIs, i.e. the graphical display of information within the VR helmet, is the same sort of disruptive opportunity that garage tinkers, and lean teams have made fortunes on. Much like the design patents Apple Inc. received on its icon arrangement for the Iphone, VR companies will be looking to find the optimized, and proprietary, ways to display information to a user.

If one were asking me the "next big thing" is design patent law - I would say it is the race to develop and patent the most beautiful and intuitive VR UI this side of The Lawn Mower Man. In this race, the field is wide open.


  

The importance of underscore: Learning Flask and Python Windows Installs

Along with the broad, and highly compelling legal analysis provided with this blog, I want to also use this space to provide some insights into software coding.

In developing a legalTech App for Baselex , I decided to use the Flask micro framework. I chose this over Django principally because Django seamed a bit overkill for the simple back-end I wanted, and I wanted to get some hands on experience writing Python based server code without 10 hours of just reading documents first.

I found an excellent Tutorial for Flask here (the official one leaves a bit to be desired). Working on a Windows machine, you are always at a disadvantage since most developers are running OSX or Linux machines and have a more knowledge of the command line, and most tutorials assume that windows users do too. (FYI, you want to develop seriously, then know the command line - it makes you a ninja, use powershell)

After about an hour of setting up, googling, re-setting, and re-googling. I finally had Python installed on my system, along with pip and virtualenv. Setting up Python on Windows is not an uncomplicated process. While doing so, I learned the following

Windows Python users Pro-Tip taken from the excellent "Learn Python the Hard Way" 

1. Configure the path correctly. Make sure you enter [Environment]::SetEnvironmentVariable("Path", "$env:Path;C:\Python27", "User") inPowerShell to configure it correctly. You also have to either restart PowerShell or your whole computer to get it to really be fixed.
2. I would add to this [Environment]::SetEnvironmentVariable("Path", "$env:Path;C:\Python27\Scripts", "User")

When I finally installed Python, I followed the Flask tutorial instructions for a simple test app that would start a local development server. I made my folder structure, and executed my virtualenv script and......

 this happened:

Traceback (most recent call last): File "run.py", line 2, in from app import app ImportError: No module named app

I was crestfallen. All that work and I immediately get an error that prevented even the simplest of things from working. I tried everything, I looked at the code again, and copied it exactly. I restarted power-shell, and went to the help forums where others were having similar, but not exactly the same problem. I will spare you the amount of time spent trying to figure out the solution, but here it is.

One of the files I created was an  __init__.py file that contained the app assignment. Something was wrong here. I looked and looked and looked. The only thing I could find was that I had named my file _init_.py and not __init__.py (double underscores vs. single).

With trepidation, I changed the file name and Bango! my server started, and I was off to the races.

The lesson here about coding is that, as is law, precision counts. It is not enough to have the same code, but the name of the file has to be exact or else the whole atomic clockwork of computing can't tick over.

To NDA or Not to NDA, this isn't really a question...

There is a stain of thought, one prevalent in the venture capital community and elsewhere, that NDAs some how mark you as a novice, neophyte, or worse, a rube.

This line of thinking starts from the moderately dubious premise that VCs are all honest money, and they are too busy being efficient stewards of capital flow to even contemplate, let alone effectuate, the misappropriation of the finer points of your next big thing(TM). Secondly, the argument flows, if investors signed NDAs, what is to stop jilted Founders from suing them every-time the failed to back their company over a competitor. "Law suits are expensive, and we just don't want to risk exposure for an unlikely event."

I tend to find this reasoning akin to a hotel telling its customers that they don't provide locks to the room doors. The reasoning would be "Locking your door is, in essence, an insult to the ethics of our employees, and it passes a cost in terms of "locks" onto hotel, which is impermissible." Agreeing to this is totally reasonable, right? The odds that someone is going to break into your hotel room are statistically slim, so why worry about locking that door, or even have locks to begin with?  A hotel break-in is a low probability, high impact event. One that has an absurdly low risk control component. The cost of locking your door is low to you, given the potential down side of not locking it.  The cost of the Hotel providing locks to all its doors is high given how often people break into rooms.  

Therein lies the rub. Whose job is it to manage risk. The customer, or the seller.

The truth is that VCs see hundreds of companies, lots of time these companies are direct competitors to your company.  No amount of NDA language is going to give you complete comfort that some portion of your next big thing isn't going to get passed around like a handle of fireball at a Tennessee wedding.

However, that doesn't mean that you shouldn't make sure that you protect as much as you can. Big capital players usually have some form of internal control to at least minimize law suits, so it is not the end of the world if they don't sign, remember execution is much more important than  conception.  But ask questions, be knowledgeable about how they safeguard confidential information. If there are no locks, are there burly security guys on every floor?

However, if you are dealing with small angel investors and syndicates (potentially first time investors) that might a) not have the institutional controls, and b) internal discipline to keep things confidential, then make sure that you are using some form of NDA. Some of the smaller players might not have the systems in place to protect information, so a NDA can focus the mind. If you are dealing with anyone less than a household name in the industry, there is no harm in the ask. 

Asking for NDAs goes beyond investors. If you are outsourcing any part of your Dev team, NDAs are a good way to get people on the same page, as well as giving you legal recourse for straight up IP theft. (This does happen, regardless of what people tell you.)

All things being equal, even if no one agrees to sign an nda, you can still protect yourself.  We advise filing low cost provisional patent applications that cover your pitch deck. That way, even if your disclosures become public knowledge, you still have the potential of protecting the IP through the patent office. 

Never forget that VC money is not doing you a favor. Their job is to allocate capital, maximize return, and minimize risk. It is not your job to make their job easier by not protecting your intellectual capital.

Jordan Garner. 

Some thoughts on legal technology business models

The start of the New Year is a great time to revisit the basic premises that underpin business models.  For CodexJuris generally, that business model is legal software technology.

In the last year we have launched Baselex (www.baselex.com) a forum for lawyers to share difficult to find legal tidbits, the kind that frustrates easy googling and makes attorneys inefficient.

In the future, 2015 and beyond, we hope to launch other projects that tackle some of the inefficiencies in the practice of law.

However, the goal of reduced inefficiency is not always the primary goal of Legal Tech start-ups. Broadly categorizing, legal tech falls into two, non-mutually exclusive, camps. The first are outfits that that seek to replace expensive lawyers, usually with some combination of cheaper lawyer stables and intelligent work-flow systems. The second, are outfits that seek to replace inexpensive lawyers and staff with technology. Usually though software  designed to make expensive lawyers more efficient. Think of the first one as a market place for auditioning solo lawyers (like Angie's List, but for legal work) and second as modular document generation (the Baselex document repository). Of the two, I would place my bets (and I have) on the latter being more successful than the former.

Why? Well, the root of most things, money and risk. Lets take a hypothetical, suppose that Mega Company, and more particular, the in-house counsel of Mega Company, decided to outsource some bit of complicated legal analysis to a outside legal vendor. Vendor 1 is a start-up that claims they can supply the work product of a high-priced legal team by putting the client in touch with a low-cost legal team that has been pre-vetted.

Vendor 2 is a high priced law firm that has a sterling reputation for quality work and exorbitant fees. However, Vendor 2 is willing to cut the Company a deal, 60% of its normal fee, to do the project. 60% is a steep discount, but the Firm likely knows what it needs to make on its billable to be profitable and will use some Lawyer-Augmentation software to squeeze every last ounce of efficiency from the high-priced attorney (some poor associate). This can be done using optimized work-flows, semi-intelligent work product generation, and in case of software failure, a heavy wooden stick.

99 times out of 100, In-house counsel is going to go with Vendor 2. Why? Risk. Who assumes it and for what cost. In example 1, the in-house counsel assumes the risk for catastrophic screw-ups. If the work produced by the start-up was excellent, then everyone is happy that the Chief Counsel used such an innovative product.

However, if things go pear-shaped, and they do, who will receive the highest risk exposure? The start-up...nope. They aren't in the business of providing legal services, they are a match maker who takes a cut. The low cost contractors that the start-up sourced? Nope. They have an agreement, and mal-practice insurance (they do have mal-prac insurance right...).  Nope, the full weight of failure will fall on In house counsel. In the event of a catastrophe, it will be the chief counsel, or more likely an assistant counsel, whose squirming terror stricken body will be dumped before the Corporate Board to explain why it was a good idea to cut costs on a highly sensitive issue.

Going to the other extreme, if a well established, well regarded firm screws up, and it happens all the time, the GC can point to a number of factors to deflect blame. Specifically, going with a known quality service provider is a means of providing institutional cover to the decisions of a procurement officer. The GC can point to the prestige, the billing rate, the marble lobby and say "it was reasonable to assume these people knew how to do their job, not my fault." In this scenario, the GC is not paying for the expensive attorney out of his own pocket, and definitely not staking her personal livelihood on an unknown entity.

You can see this dynamic work out in today's legal tech market. Document production and review companies primarily serve law firms, not the end client. Some do, but the business model is to have the cost savings of using less expensive attorney go to the client and not the Doc review Company. The Doc review companies replace the low level attorney salary, and unload some of the risk. What they don't do, is replace the Law Firm.

If that weren't true, you would see document production companies turning into litigation powerhouses, instead of the rise of non-associate litigation / discovery analyst positions inside litigation powerhouses.

As such, a winning business model is supplying the existing legal industry with more sophisticated tech. Trying to supplant firms with Legal Tech is difficult, primarily since the only way to do that would be to provide an equivalent level of risk cover to the GCs. Moving fast and breaking things is a great way to dislodge entrenched tech outfits, but it is a great way to not get risk adverse GCs to become customers.