Legal IQ: Hello, and welcome to this IQPC podcast presented by Legal IQ in conjunction with the forthcoming Sixth Annual Patent Congress. The Patent Congress is due to take place this September. Today we're joined by Dave McAllister, Director of Open Source at Adobe Systems. We've got in this call Mikk Putk, Patent Attorney, Patent searcher and Partner at Sarap & Partners Patent Agency, also owner of the IP Insiders blog, together with Stephen Jenei, Editor in Chief of Patent Baristas Blog and Patent Attorney and Owner of Jenei LLC.

Now, if you'd all like to maybe introduce yourselves and give a brief overview of your current responsibilities at the moment. So first let's start with Dave. Just tell us a little bit about your current role and remit.

D McAllister: Hi. I'm Dave McAllister. I'm the Director of Open Source, as was announced, for Adobe Systems. I've been with Adobe for about six years and have seen a number of changes happen during this period time in Adobe's use of both open source and open development. I also manage accessibility, so I deal with a lot of policy from that side, and deal with a number of the standards organizations here as well, so I get to spend a lot of time worrying about the topics of today's conference.

Legal IQ: Yes. Great introduction. Thank you. And, Mikk, if you'd just like to give a brief overview of what you're responsible for at the moment.

M Putk: Hello, everybody. Greetings from rainy Estonia. I'm an Estonian patent attorney and partner of small patent agency. We work mainly with local technology companies and start-ups and we help to protect intellectual property in Estonia and abroad. Thank you.

Legal IQ: Thanks very much, Mikk. And finally, Stephen, if you'd just like to introduce yourself to the listeners.

S Jenei: Yes. I'm Stephen Jenei. I'm the owner of Jenei LLC, which is a patent and intellectual property law firm, and also the Editor of Patent Baristas, a blog on intellectual property issues.

Legal IQ: Thank you. It's great to have all three of you here today. Now, let's just give an overview of what we're going to discuss. We're going to cover Adobe's open innovation system first and foremost and also the ongoing debate versus the Adobe Flash Player and HTML5. Then we'll move onto Adobe's open screen Project and the impact and reach of open development that Adobe's embracing, such as Flex, Brackets and the PhoneGap. So to start, let's turn to Mikk, who's going to open with a couple of questions. Mikk, over to you.

M Putk: Yes. Very well. Can you please explain at first Adobe's open innovation concept?

D McAllister: Great. So Adobe is a company that has always been built on innovation, and innovation for Adobe over the last 25 years is ultimately led by internal discoveries and internal activities and projects. What has happened over the last decade is that it's clear that building innovation is easier in an open environment where all participants can play in an equal sense and provide ideas and concepts. The value that we really see in open is that you often get ideas that don't come from your traditional side because they're things that internal people don't think of. Fringe items sometimes end up being far more powerful than what the traditional engineers would think of.

So for Adobe, open innovation means that we make sure that anyone can take part in a project, and when it makes sense we move projects to external entities and work with external parties to build platforms and frameworks that make the overall value better for everybody. I use this phrase that we like to return more value than we receive in the open space. We are building on things, so we want to make sure that we give back more than we get.

M Putk: Can you explain also the borders of openness?

D McAllister: Openness is... sorry, I'll get off my soapbox for a minute, or on my soapbox. Open is one of those phrases that's been so diluted over the last couple of years that I'm quite often worried about using the word open these days. But for us, open is the exchange and sharing of ideas and information in such a manner that all people can use it. And believe it or not, this is something that's been in Adobe's roots since the formation of the PDF specification 1.0 back in 1993, when we released the spec and said, feel free to use this any way you want to, build anything you want to with it, and, by the way, here are the essential patents and you have the right to use those in perpetuity irrevocable without charge.

So open becomes real important in this sense because it enables the development of a vibrant ecosystem. Again using PDF as an example, and my team is the one that took PDF and made it into an ISO standard, (thus PDF literally is no longer owned by Adobe. It's actually one of the international standards being driven through the ISO 32000 specification.) But we see things come up that no-one else would have thought of because we, Adobe have a specific focus, but other people can build products that may have a different focus. And open innovation for PDF means thousands of companies make use of PDF. And literally in the open source sense there are hundreds of products that are built using the PDF specification for openness.

M Putk: Thank you. But what are the potential risks when you're tying open innovation to business strategies?

D McAllister: There's always a risk, and what you have to do is balance the risk versus the reward. When you open up something you can quite often, particularly in an open source model with open licenses, as the open source initiative defines it, you quite often can empower your competitors to do things that are competitive to you. This is one of those issues that we spent a lot of time looking at. What's the business reward versus the potential risk in this space? 15 years ago in this space, every company that I worked with in the open source sense always felt that the reward of being open was not necessarily sufficient to balance the risk that a competitor could outperform you in your own technologies.

What we recently have found, recently, what has been discovered over the last probably six to eight years is that the advantages of providing an open development, particularly for platforms, outweighs any risk that's involved there. Everyone gets a stronger product, everyone gets to compete on their features and their quality and, very honestly, we get to take as much advantage of what our competitors may be choosing to do as they get to take advantage of what we're getting to do. So the open development model, particularly in the open source sense, really does provide the industry a way of working to make everything better. And it's really come down to the point where we really aren't as concerned about the potential risks as we are concerned about the value over the reward.

Just to sum up here, we do have to be cautious, particularly in intellectual property senses, because we do need to make sure that we are, when we're releasing something, not violating somebody else's work and that we are representing only the work that we have the rights to represent. So we do spend a lot of time. We have a pretty substantial process that goes through for both an open source project release from internal, as well as the adoption of open source work into Adobe.

M Putk: When we talk about opened economy and open business strategies, what do you think... how does it affect intellectual property protection?

D McAllister: The way that it protects intellectual property is always one of those things that, to my knowledge, everyone likes to argue about and no-one's actually come to a fully complete agreement on. But literally the ability to release something, either a specification, an open specification that anybody can build too or to an open source code, is a conscious decision that your protections are no longer as locked away as they were. And so quite often when we do this we do look at this and say, yes, we're retaining the rights to this, but we realise that we're letting everyone use this.

And so we still hold our patents, but we're basically granting the rights to use these patents. Not all open licenses implicitly grant these licenses. Some of them are unspoken. None of them have been significantly tested at least here in the United States. But from our viewpoint, we do look at this and say basically, if we're going to release a technology as open source we also expect, that our belief is that we are making the directly related patents that we hold on that available for others to use.

M Putk: And now finally, my last question, how do you tie IP protection strategies with open innovation business strategies?

D McAllister: Adobe is an interesting company. We have legacy backgrounds. We have products that go back forever. And very honestly, Adobe is a company that is driven by engineering and driven by innovation. We do set policies in place and we worked very closely to make sure that when people wanted to do something as open that we do the work necessary. We make it as lightweight as possible to do the background work and we try to automate the process as much as possible to try to protect our interest for both our customers, our shareholders and our employees.

So very honestly, we'll start off, and this literally is the first question, though it's not necessarily related directly to IP, is if someone in this company wants to open source a project the first question is always “Who cares?”. Because if you're doing something that the rest of the world doesn't care that you're open sourcing it or not, don't bother. And the “who cares” is also internally. If you're trying to get rid of a project that you don't want to support anymore we won't let you go out with open source.

Once we've gone through that we break it down into a category of business questions, a category of legal questions, and then we have a sliding scale for approvals that requires at least a VP-level approval to release a product into open source. Once you've done that, unless there are significant changes to your project you don't have to repeat the exercise. We do go through regular patent work for new releases on the open source side and we do reissue export compliance to make sure that it is handled correctly for each release. So that's the internal to external side.

Working with the external side, which is one of the places that Adobe is becoming more and more active, we go through a similar process of making sure that it's something that we want to be involved in because while open source is great at being open, open source is not free. It does cost a company money to do this work. So we also want to make sure that it's a business activity for us to work with a WebKit or an Away3D, which is the new foundation that we announced support for last week.

Legal IQ: Well, thank you very much, Dave, for your overview there. Thank you. Mikk, did that answer your questions?

M Putk: Yes, thank you.

Legal IQ: Now we're going to move the debate to a few other areas, focusing on the Adobe/Apple debate. So, Stephen, if you'd like to take over for this section, I believe you had a few questions for Dave.

S Jenei: Yes. Hi, Dave. I realise this is not new news, and I'm sure you're rolling your eyes as I'm asking, but obviously as a long-time iPhone user, who've visited many a website with the warning that I don't have a Flash plug-in installed, so I'd like to ask what it's like from your perspective, the behind-the-scenes view of this flash versus HTML5?

D McAllister: The US is currently in their every four year flinging of nasty phrases around all our political campaigns. And in many ways, from the internal viewpoint it felt like that. Very honestly, there was correct information given on both sides, but there became emotions involved and there became posturing involved and it became a, “I can't change this mantra because if I do then I'll lose face”. And it became a fairly interesting category. There's truth on both sides. But honestly, when Flash was first created and Flash was first developed it was done because there was nothing that did anything close to what Flash did. There was no way of having universal video or universal animation crossing websites and website browsers. And at the time, very honestly, it was something that website designers flocked to because there was no other solution.

Over time, most of these objects - working in this field it's fairly easy to say this - but over time, innovations that become commonplace do become standard and they do move towards standards and they move towards more generic ways of implementing it. And a lot of the things that Flash did in the 90s have been subsumed by browsers these days. However, at the same point in time there is a lot of things that they can't do at this point in time. But in the open sense these may be bad words, but things like digital rights management or content protection models, things as simple as a sound way of doing closed captioning for accessibility reasons, aren't quite there yet. And literally, in terms of performance, there's still certain edges in being able to say that you're dealing with  optimized code.

So what has happened in this space is that Flash and the Flash platform, which includes Adobe AIR, have moved to providing unique capabilities to marketplaces that are interested in advanced features, like in mobile for things like gaming and for things such as high-end video content. So we're seeing Flash continue to innovate, but move the standard capabilities off to other platforms. In fact what you're now seeing though is that in the mobile devices the Adobe AIR product, which does incorporate Flash, is the choice for both IOS as well as for Android. They both are available on those platforms. And the Flash Player near and dear to our desktops continues to evolve on the desktop environment.

So it was an interesting time, both internally and externally because, very honestly, people like myself never quite got what the argument really was.

S Jenei: That goes the same for users, I would say. So what is then the future of Flash? Is it that it's not dead, that it's become, evolved into a higher organism?

D McAllister: Yes, the Flash evolution continues and it's right now focused on two principal areas. One of them I mentioned, is basically gaming, particularly in the social or high-end social gaming marketplace, as well as into high-end video content delivery.

S Jenei: But how does it provide its service superior to other products?

D McAllister:  So I have to break it down into both of these issues and discuss this. Let's break it down into the video sites since that's the easier side and it impacts my daily job as well here. Currently, the Flash Player is one of the best ways to deliver accessible content, being able to do the closed captioning, being able to deliver the videos so that closed captioning stay within locked step and stay within timing, being able to deliver it in a consistent manner without necessarily overwhelming your CPU. I haven't tried HTML5 video recently. The last time I did try it on my Mac I did peg my CPUs. So there's things like that.

All these problems will be solvable and in the future they'll probably again move down because video is a commodity in the web space. But again, right now the ability to deliver necessary though somewhat high-end capabilities rests inside of Flash. People like Disney or like the BBC really do want to protect their content. It may be a bad phrase, but we have to recognise that our customers, the creative people of the world, do feel like they have value that's in their content and want to be able to receive that value.

The gaming side, which is... I have a 22-year-old son and unfortunately grown up for the last 20-plus years in video gaming space, as well as being a little bit of a gamer myself, is more interesting because there it's a concept of interactivity, graphics capabilities, as well as performance modelling. And in Flash we already are seeing that many of the today's social games, be it the original blockbuster Farmville, to things that run on armorgames.com, are already written in Flash. And so what we do there is we work to extend the platform, and we actually extended this into, again, the open side of the house as well.

About a year ago we announced support for an open source 2D framework for gaming called Starling, Starling 2D. And last week we became a strategic partner for an open source 3D called Away3D that's actually based out of the UK. These are to provide platforms that allow people to, again, innovate across the capabilities, because innovation in graphics is a lot of fun. I've spent ten years at Silicon Graphics, and 3D graphics is just fun for this. And so we do see those become innovations that will help power the Flash platform as a delivery platform, but allow people to innovate on top of it in ways that, very honestly, we have no concept where they're going at this point in time, but we expect it to be quite a ride.

S Jenei: If I understand, you're pretty optimistic about the future of Flash.

D McAllister: I'm pretty optimistic in the future of Flash within areas of innovation.

S Jenei:And what is your favourite game when you're gaming?

D McAllister: Oh gosh, that one's really tough. I'm more the strategic type, but I actually grew up with a family that played cards every weekend. So almost any card game will get my attention.

S Jenei: I understand. I have to ask, just because it's interesting, did you ever meet with Steve Jobs personally? And if you did, what was that like? And did he have a Dave McAllister dartboard in his office?

D McAllister: I only met him once face to face, but I have actually had a number of phone calls with him back in the 90s for a lot of interesting reasons. He honestly was one of the most futuristic geniuses I've ever seen, to be able to figure the directions for the broad-based consumer and the high-end prosumers' direction. I've never met anyone that was as capable of that. Very honestly, the closest that I can come with is again in the 90s, was Jim Clark, who ended up... he founded Silicon Graphics but also founded Netscape, Healtheon, and I get lost after that, other places. But he could predict precisely where the world was going to be in three years. It was absolutely amazing how Jim could do that.

Steve was a guy that was just right. The problem was that sometimes even though he was right he was so tapped into the future world that no-one else could see he was right until it happened. And I was absolutely amazed by the way he could see the future. He didn't have a dartboard to my knowledge, but I didn't get to go in after some of these other things happened as well. But yes, good guy, really good guy.

S Jenei: I appreciate the insight. As a ramp up, it seems as though Adobe is juggling a lot of projects and there's a lot of open development going on. There's Flex, there's Brackets, there's PhoneGap. I'm sure that that's all far too much to go in detail about in a call like this, but I was wondering if you can give us some sense of where these things are going. I know a concern quite often in the public is that Adobe will take up a project such as the open innovation concepts that they've had and then they might wither away when they don't flourish. And so I was just wondering if you'd give us an overview of where projects are and what you see the future of those.

D McAllister: Sure. The ones you mentioned are interesting, so PhoneGap, Flex, Brackets are probably the newest ones as well as the most popular ones. And there's a whole list. If you go to http://www.adobe.com/go/open you'll go out and see a much larger collection of projects. My team tries to keep track of everything going on inside the company, not as successful as we'd like to be yet, but we are trying to make that the consolidation portal for all open projects.

But breaking this down, one of the things we did was we looked at the projects themselves and we broke it into two sets of categories. Are the projects themselves dependent on Adobe support or could the projects actually live if Adobe went away? Where the project would seem to make sense, where it would live with Adobe not being directly involved and driving the day-to-day business, we try to move into a more open environment.

So PhoneGap, or Cordova as it's known, is actually an Apache project. The PhoneGap 2 and Cordova teams work very closely together. PhoneGap 2.0 was actually announced last Friday at PhoneGap Day, which is during OSCON 2012. But it's a project that has gone through an incubator set. It's gone through the Apache process. And therefore if Adobe was to suddenly not be involved it would continue to survive. It's one of the most popular projects for mobile use, even people who are using other frameworks. At talks last week many people referred to PhoneGap as a way of doing something unique or a way of doing something easily.

Similarly, Flex, which was one of our first big open source projects, we ran internally for a number of years. So it was actually... the announcement for open source happened in 2007. Flex 3 went open source in February of 2008. And we ran it ourselves until we got to a point where the industry and the marketplace, the environment could support it and then we presented it through the Apache process into their incubator process once again. And it is an  active projects that's just released their first Apache version, and is mostly driven by the outside community. We do have Adobe people who make submissions to it, but Apache doesn't really look at any project as a company-owned project. It's actually looked at as a project to which individuals work. And so there's a huge amount of innovation work, there's huge amounts of support work that's being driven by people who don't work for Adobe, as well as people from Adobe committing their own time but not as Adobe, as individuals.

Brackets was an absolutely interesting category because it's one of the first time that a company went out and said, we need to have a capability, and let's find out what's out there to begin with. And so they went out there and looked around and looked at the IDEs, came up with one and enhanced it and then pushed it, so it became a very popular programme. It's out on GitHub, and GitHub has a similar model even though there is an Adobe name associated with Brackets. Anyone can use it, anyone can fork it [?], anyone can do anything with it for that.

To put back to the other side, however, there are other projects. So we recently open sourced two security-oriented products, one of them which will go through and analyse a SWF file, which is the output of the Flex environment, to look for potential malware vulnerabilities, as well as one that goes off and sniffs executables to look for malware as well. And those we have and we allow people to use, submit changes to, but because they're security related we do like to keep a little closer eye on those and so we actually watch what's going on with those and we make sure that no-one is sneaking in anything that's not in the best interest of people building secure products. And so there's a dichotomy between those two.

We heavily support other outside places, and probably the biggest one that's known is WebKit, where we're doing a tremendous amount of CSS work to enhance WebKit. We have recently been working with machine translation and extending machine translation in the open source sense, the open source spell checking apps, as well as funding an accessible screen reader NVDA. In a sense all these projects that may not be of huge interest to the marketplace but are incredibly valuable to the end user will get supported, but equally driven by outside folks and outside innovation.

S Jenei: Thanks. That's really interesting. I'm sure that most consumers wouldn't ever really think about security issues that could come up when you have open source, and I could see why that would be a great concern.

D McAllister:Yes. Just as an example, there was a security bug that was in a version of Linux. I'm an old OS kernel guy, for years and years and years, VMS days, Unix days. And there was a security issue in a Linux distrothat when you generated the secure key there was a bug that only allowed the potential of 1,024 keys to ever be generated. And so if you knew about it you could go try 1,024 keys. That's pretty easily. And it was only discovered because someone was looking at random number generators and couldn't figure out why he couldn't get lots of random numbers out this particular Linux variant, and discovered it.

So security is something that people have to consciously look at. And it was quickly found, quickly changed, but it turned out it had been in this particular Linux distro for about two years. So we really do watch the security side very closely.

S Jenei: I say, as I'm looking to Adobe's website, as you mentioned, there's lots and lots of information about the various services, I'm probably most interested in PhoneGap, given the graphic that I saw in there that shows the wireless network connecting together things like a laptop and cell phone to a toaster and coffee cup. Can you tell us what that toaster does?

D McAllister: It will report to your phone when your toast is the perfect shade of brown for that. This is the inter-connective world that you're beginning to see here. I don't know if you've reached the crossover point where mobile devices outnumber desktop devices, but I suspect we have for this. And I depend as much on my phone when I'm travelling as I did on my laptop. As a speaker, I can't go to a conference, look around the room of 100 people where there won't be at least 5% writing something on their phones.

So PhoneGap's capability of being able to tie all these things together because of the nature of its cross-platform environments and because of the nature of the actual framework itself, it leads us into these wonderful, wild connected ideas where your refrigerator calls your phone and tells you to buy milk on the way home. So it'll be really fun when we get there.

S Jenei: I will tell you that I actually... it's not a patent I worked on but one I came across, was the weather toaster. And it is actually in fact a patent on a toaster connected to the internet so that it knows what the weather is going to be. And then it toasts or browns into the bread a symbol of the weather that day, like a sun if it's going to be sunny, that sort of thing. So it actually exists [?].

D McAllister: That's really cool. I have to admit, that's really cool. I'm going to have to go find the toaster now. And if there isn't one, I just read there's the maker faires, and they had one of those running [?] and demonstrating projects at OSCON last week. I'll have to go ask one of the maker guys if they can build me that toaster. So wow, really cool.

S Jenei: So, Dave, thank you. I'm sorry?

D McAllister: Of course, here in California the weather comes out the same every day, as we all know.

S Jenei: Yes, it would be a boring toaster I guess. But, Dave, thank you so much, and also for your good nature-ness. I appreciate all your discussion today.

Legal IQ: Yes, that's great. Yes, thank you very much, and some very good questions there, Stephen. And, Dave, yes, so interesting to get a firsthand account of working with Steve Jobs and Jim Clark, very interesting insight there. Great. Has that answered all of your questions? Yes?

M Putk: Yes.

Legal IQ: Excellent. And are there any talking points that you'd like to bring out of those to discuss as a final Q&A section, Mikk or Stephen?

M Putk: No.

Legal IQ: No? It appears that all answers have been offered. That's great. So thank you very much for your time, everyone. It's been great to have this discussion. Just for the benefit of our listeners, the forthcoming Patent Congress, you can hear more from Dave. He's going to be delivering a presentation on day one on patent portfolio strategy, licensing and monetisation. His presentation will cover in depth open innovation business strategies and how to ensure smooth operations.

So just to give a few more details about the event, the Annual Patent Congress will take place on 24^th to 26^th September at the Mogens Dahl Concert Hall in Copenhagen, Denmark. If you'd like any information about this event and the other speakers that we've got onboard, please do visit the website, www.patentscongress.com. Alternatively, you can find out information from our enquiries team, who are contactable on +44 207 368 9300 or email enquire@iqpc.co.uk.

So with that, I'd like to thank once again our speakers today, Dave McAllister from Adobe, Mikk Putk and Stephen Jenei, our bloggers of the day. Thank you very much for your engaging questions and discussion.

M Putk: Thank you.

D McAllister: Thank you. Thank you guys for listening to me ramble on, and great questions, and look forward to discussions in the future.

Legal IQ: Thanks very much. I hope everyone enjoyed the show.

S Jenei: Very much, thank you.