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Ericsson's New York Cyberlab

This article appears in the issue July 1999 [Volume 8, Issue 7]

Perfecting a formula for invention

The serendipity of invention, which uproots established markets, casts out formidable companies and makes way for the meek to become giants, is the stuff of legends. All companies aspire to it, but in reality most companies maintain a "not invented here" mentality, which blocks them from seeing the potential of new ideas. Every company struggles when it comes to fully appreciating a new concept, because invention does not often meet what marketers define as a compelling customer need.

John Seeley Brown, CTO of Xerox and director of its famous research division Xerox PARC, has said that many famous inventions took time to attract a wide market because figuring out the best uses for a new product and the best way to bring it to market is a slow process. For example, the invention of the copier required innovation in sales, marketing and leasing before its mass market developed. Xerox PARC's invention, the graphical user interface (GUI), which ultimately was pursued by Apple, also took time to be understood and adapted. Appreciating invention and instilling the rigor required to turn it into a product or service that someone will buy requires a sustained, organizational effort.

Ericsson (www.ericsson.com), the telecommunications giant, established Cyberlab NY (www.cyberlab-ny.ericsson.com) to do exactly that. One part business development, one part product development, Cyberlab NY serves as Ericsson's window into how the outside development world is evolving the services delivered by wireless networks. Like all traditional telecommunications providers, Ericsson has struggled to successfully make the transition to the data communications market (where open systems based on IP networks integrate voice, data, video and Internet access) from telecommunications, where new products are based on closed, proprietary technologies.

Ericsson has implemented numerous internal knowledge-based programs, including efforts to reskill the work force and rethink the product development process. But the company has also taken a broader perspective. Recognizing that new ideas are not the single domain of its R amp&; D divisions, Cyberlab NY looks toward small, innovative firms, which seem to spring up daily. It fosters relationships and supports leading-edge application development for inventive new wireless application projects.

Established just over a year ago, Cyberlab NY pairs Ericsson technologists with independent Internet applications developers in the Silicon Alley. Funded in part by the New York City Investment Fund-which promotes the development of high-tech businesses-Cyberlab also serves as a locus for better understanding the needs of New York's buyers of technology services, particularly the financial services, media, healthcare and education industries. Cyberlab's mission is to form partnerships among potential customers in those industries, external Internet developers and Ericsson's product development and marketing units.

Silicon Alley has emerged as a hotbed of innovative Web design and development. Cyberlab's partners, such as Organic Online, have created well-known E-commerce sites for customers like Gap (www.gap.com). To fuel that demonstrated capacity, Cyberlab helps educate its developers about the wireless network and its capabilities to foster the development of the "killer app" for portable devices.

Recently, Cyberlab worked with a company called W-Trade, which had created a software application enabling stock trades from a cellular phone. Without the marketing prowess and distributed sales force, getting to all the cellular service providers would have been time-consuming-so time-consuming that another firm could bring a competing application to market.

W-Trade, not interested in developing the necessary marketing and sales capabilities in-house, chose to have Ericsson contribute technical insight and distribute the application through its sales force to operator customers like ATamp&;T, OmniPoint and Southwest Bell.

For companies in the fast-moving Internet space, the wireless network remains a largely untapped frontier. Tim Connolly, business development director, cited industry estimates that there will be 1 billion wireless devices in use by 2001. The potential is vast to provide additional services and connectivity for those devices to the Web. But bringing an application to market is no small task. And as small companies prefer to invent and larger companies tend to purchase those ideas, services like those Cyberlab performs will become increasingly valuable.

Cyberlab brings more than marketing and business development insight to the table; it also focuses on education. The wireless network remains a mystery for even the most innovative developer-making a Web site accessible through the tiny screen of a cellular phone brings fundamentally different development challenges. With a specification called wireless application protocol (WAP), it is possible to convert HTML or XML data on the Web into something a cell phone or digital assistant can interpret. Called WML code, it represents a natural progression for Web development.

But not without some training. Therefore, Cyberlab has developed a wireless network education program, what Connolly calls "wireless 101 to WAP 999." It brings in market experts to explain growth potential and technical experts to explain the ins and outs of developing applications to run on a wireless network. Those sessions, which are fairly informal and free of charge, are available to anyone who registers with Cyberlab's Web site.

The Cyberlab Web site is also key to its strategy. Although the organization has formed close ties with the Silicon Alley developers, it is not tied exclusively to that region.

As Donna Campbell, director of Cyberlab, explained, "We provide an external view for Ericsson on what innovations are being created by other developers. But for me to find every company, every developer in NY with a nifty wireless communications project, that would be a lot of lunches."

The "submit a proposal" feature enables companies beyond Silicon Alley to bring their ideas to Cyberlab. The site provides useful resources to developers, such as a software developers kit and access to expertise. Through the "Ask the Expert" feature, developers can submit technical questions regarding the wireless network. Three Ericsson technology experts are available to respond. The idea has caught on with other areas of Ericsson, which have patterned the same system to promote other technologies.

Cyberlab's efforts to find new ways to use wireless networks also extend to the non-profit sector. Ericsson established ERICA awards to promote innovative uses of technology within a community that often lacks high-tech resources. Fourteen hundred non-profits submitted proposals this year on how they could benefit from the technologies. Britain's National Library for the Blind was among the three winners; its idea was to build a bookstore for the blind, providing greater access to resources as well as interactivity with the media. With prize money, as well as donated products and development time from Oracle and several of the Silicon Alley firms, the library is fulfilling that need.

That application exemplifies the boundlessness of technology's use, as well as the infinite sources of good ideas. How technology comes to be used often surprises the original developer. When Thomas Edison invented the phonograph, he balked at using it to play music, seeing that as debasing its potential.

As work takes more people away from their desks and their corporate networks, the need for ways to access networked information resources grows. No one knows how the need will be filled. But Ericsson is betting that someone will come up with an answer. It increases its odds of being part of the answer with Cyberlab.

Patent process for Ericsson U.S.

Ericsson is keeping closer watch on ideas and inventions that could become patents. Three years ago, Ericsson made the development of a strong patent portfolio a business imperative. In the telecommunications industry, licensing fees derived from patents are a significant source of income. They also pave the way for companies to establish their pre-eminence in a field, enabling them to convert carefully derived innovations into sustainable competitive advantage.

"Patents are an attitude. If the inventor is not wondering whether this new concept could be patented, then we are practically giving it away," explained Don Mondul, corporate counsel for Ericsson's U.S. division.

Getting patents, however, can be time-consuming. The U.S. Patent and Trademark Office (USPTO) often takes two to three years to grant them. Internal process inefficiencies kept Ericsson from filing as many patents as it could. Ericsson, like many other companies, had a patent review committee staffed with senior engineers. Because of members' multiple commitments, the committee could not meet as often as necessary. The backlog grew alarmingly. So, Ericsson decided to expand responsibilities for patent review beyond that small team of senior managers.

Corporate Patent Counsel, in conjunction with senior executives, designed a process that put responsibility for patent review into the hands of the line manager and the technology experts who were creating the new products. Ericsson first identified the leading expert in the different technologies areas, who would be first to notice any ideas potential. They then established a procedure for determining what inventions qualified for review. Asking basic questions-Is the invention different from previous solutions? Is the difference trivial? Is the patent important for Ericsson or its competitors?-stimulated the process from idea to patent. The review process centers on honing an argument for approval by USPTO. In reviewing the application internally, it strongly emphasizes constructive feedback: One cannot simply return an invention disclosure to an investor with the comment, "Make it better." Continuous education through positive feedback speeds the patent process as well.

Ericsson's U.S. operation has seen remarkable results from the decentralization of the patent development and review process. It has increased the number of patent filings fourfold; reduced the time from disclosure to delivery to a patent attorney for application preparation by 75%; and decreased the time from disclosure to filing with the USPTO by 59%. z


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