The Accidental Inventor: An Interview with Hal Philipp

[00:00:00] Speaker A: Welcome to ID the Future. [00:00:01] Speaker B: I'm Andrew McDermott. [00:00:03] Speaker A: Today's episode comes to us from our sister podcast, Mind Matters News, a production of the Discovery Institute's Walter Bradley center for Natural and Artificial Intelligence. You can learn more about the show and access other episodes at mindmatters. AI. [00:00:24] Speaker C: Greetings, and welcome to this great interview that we're going to have. We're going to be talking to Hal Phillips and how Philip is one of the great entrepreneurs and inventors, I think, of the 20th century. And we're going to get into that. I would be very surprised if today you haven't used some of the devices and some of the technology which is developed by Hal Phillip. I'm joined in the interview by Bradley Norris. Bradley is the director of the Technical Entrepreneurship Program at the Baylor Business School, and he's going to be helping me do the interviewing. So I'd like to introduce you to Hal Phillip. And Hal, I know you love doing stuff like this. Right. Are you having fun yet? [00:01:09] Speaker B: Oh, we're having a lot of fun. [00:01:11] Speaker C: You're having a lot of fun here. What I want to do is just kind of start out from the beginning. You went to Michigan Tech. I did. And your brother went with you, didn't he? [00:01:20] Speaker B: No, no, he was nine years older. He went earlier. [00:01:22] Speaker C: Oh, he went early chemistry. Magnus. Yeah. And your brother is a professor? Professor. Retired. Right. [00:01:29] Speaker B: He's retired now. He's going to be 80 this year. He was the head of the biochem department at City University in New York at CUNY for many years. [00:01:37] Speaker C: Okay, so after you graduated from Michigan Tech, you went to work for Tektronix, which is one of the big electronics firms. Could you tell us some of the stuff you did when you first started out? [00:01:46] Speaker B: Well, actually, I worked for the National Bureau of Standards before Tesla. [00:01:49] Speaker C: I didn't know that. No, no. [00:01:51] Speaker D: Okay. [00:01:51] Speaker B: We didn't talk about that. Yeah, I worked for nbs. It's now called nist. [00:01:54] Speaker C: Nist, okay. So what standards were you? You have standards? I guess. [00:01:58] Speaker B: Fusion, plasma physics, believe it or not. [00:02:00] Speaker C: Really? [00:02:01] Speaker B: Yeah. I wasn't aware they were doing that kind of stuff. But in the development of fusion reactors, they needed to have calibration data for contamination ions in the plasma, and they were working on that. They had a theta pinch reactor. And then. So I worked on instrumenting that, doing the control systems and data collection. [00:02:17] Speaker C: So how long did you work for nist? [00:02:18] Speaker B: That was about three and a half years. [00:02:20] Speaker C: Three and a half years. And then you went to Tektronics? [00:02:22] Speaker B: Then I went to Tektronics Yeah. [00:02:23] Speaker C: And at Tektronics you were. I talked to him before. You were in charge of developing technology for optical time domain reflectometers. [00:02:32] Speaker B: Yeah. [00:02:33] Speaker C: Was that your first patent? [00:02:35] Speaker B: Yeah, I had developed the time base for the first world's first oftdr optical fiber time base. [00:02:40] Speaker C: Okay. [00:02:41] Speaker B: Kind of extreme domain reflectometer. Yeah. [00:02:43] Speaker C: Okay, that's easy for you to say, right? So could you explain what an optical time domain reflectometer is for the layperson? [00:02:52] Speaker B: Yeah, sure. So a TDR time domain reflectometer basically sends out a pulse of energy into some medium. It could be into space, it could be into, in this case, a fiber optic or a piece of wire. It works like a radar, so it looks for the reflections that are coming back. And based on the signal that's coming back, you can determine the attenuation of the fiber. You can determine if there are any breaks or anything special about the fiber, some dispersion characteristics. So that was necessary to lay all the long lines in fiber optics throughout the ensuing years. This was in the late 70s. This was developed. And so I worked in the TDR group at Tektronix. They were doing wire TDRs and they had a mission to do a fiber optic version of that. So that's what I worked on. My contribution was the timebase. It was a quasi digital analog timebase and I got a patent on that. I also did the control systems based on a Z80. Z80. [00:03:45] Speaker C: Okay. Now that patent has long since expired. You were a young guy when you did that, right? Yeah. Yeah. Okay. All in all, I talked to Hal before. He has 98 U.S. patents. 98 U.S. patents. That doesn't include the foreign ones that I know of. That you know of. Right. And you've lost. You've lost track of a lot of your patents, right? [00:04:05] Speaker B: Yeah, I don't monitor them anymore. [00:04:07] Speaker C: You don't monitor them anymore. [00:04:08] Speaker B: I'm out of the game. [00:04:09] Speaker C: So how long did you work for Tektronix? [00:04:12] Speaker B: That was close to five years. [00:04:14] Speaker C: Five years. And then you decided to go into consulting business? [00:04:17] Speaker B: Yeah, Since I had done a patent, you kind of get a taste of inventing. So my idea was I would go out on my own and develop my own patents and then license them. So that was the basic mission that I set myself onto and I promptly starved. Of course, it was a lot harder than it seemed. And so I ended up consulting back for Tektronix and for other startup companies in the Pacific Northwest. But I did eventually file a patent on something. [00:04:43] Speaker C: On something. [00:04:44] Speaker B: On something. [00:04:45] Speaker A: So I want to clarify you were starting independent consulting as. Independently on your own? [00:04:50] Speaker B: Yeah, I just quit tech one day and started consulting. Okay. But I had a contract for another company that was doing optical fiber work. It's called Photon Kinetics. I think they're still in business today. So I worked for the founder, his name was Phil Shearer, Dr. Shearer, in his garage, literally. And did optoelectronics stuff for him. [00:05:09] Speaker A: Okay, that's a nice contract. And did you ever expand the team and have others join you? [00:05:13] Speaker B: No, I was a lone guy. I was a lone wolf. Yeah, that was me. So I just enjoyed working on my own. Okay. Yeah. [00:05:19] Speaker C: And he did everything. So tell us about one of your first patents that has to do with. Well, in Texas, I was mentioning, to us, the number one religion is Christianity, number two is football. And so the second patent that you had was on football. So what did you do on football? [00:05:36] Speaker B: Well, I was approached by a Texan guy who was a recruiter. He had been a football coach. And his objective was to be able to have some portable gear that he could take with him to high schools to recruit students for football. And the objective was to measure athletic performance in terms of agility and speed, both in combination. So he developed a kind of a maze system, or he had this idea for a maze system where the runner would start out at point A and then run down the field. And then there would be a light at the end of the field which would indicate turn left or turn right. And so the person had to turn right, there would be another light and turn left again, and it zigzagged down the field and finally end up at end, the final destination. And for this, I needed to develop an optical sensor that could detect this person running by this particular position. And then some radio technology to control the lights and to measure the timing. And the optical sensor was very critical, of course, had to be very fast, very high speed and low power because it all had to run in batteries. Everything was set up on tripods, not cables. So that was my first taste of optical sensors. But I'd been working at Tektronics in the optical business anyway, so it wasn't like it was alien to me. But that's where I really started. [00:06:45] Speaker C: It was a football pad. [00:06:46] Speaker B: It was a football. Well, it's based on football. [00:06:47] Speaker C: So what was the idea for the runner, the offensive runner, to be able to look at these lights down the field and tell which way to go? [00:06:53] Speaker B: Well, it's the human reaction time seeing the lights, not knowing which way the lights are going. To go. Right. So you get to a certain point, pass a certain sensor, and then a light flashes on the right and they have to turn right real quickly. [00:07:04] Speaker C: Okay. [00:07:05] Speaker B: And some people would turn the wrong way in anticipation. So this is a failure. Right. These guys didn't survive. So you have to really react quickly to the stimulus. [00:07:12] Speaker C: But you couldn't use it in a foot football game, right? [00:07:14] Speaker B: That's not the point. Purely recruiting. Just for recruiting. [00:07:17] Speaker C: For recruiting. [00:07:18] Speaker B: It's just recruiting. [00:07:19] Speaker C: Okay. [00:07:19] Speaker B: Measure it out. [00:07:20] Speaker A: Success. [00:07:20] Speaker B: Right. [00:07:21] Speaker A: Measurement of. [00:07:21] Speaker B: It's a quantification of reaction time. [00:07:23] Speaker D: And speed. [00:07:24] Speaker B: And speed. Both agility and reaction time and speed. [00:07:27] Speaker C: Okay. So you got a patent on that? [00:07:31] Speaker B: No, actually, not at all. [00:07:31] Speaker C: Oh, you didn't? [00:07:32] Speaker B: No, because that got me into optical sensors. [00:07:34] Speaker C: Optical sensors? [00:07:35] Speaker B: Yeah. [00:07:35] Speaker C: Okay. [00:07:35] Speaker B: And that's when I started thinking about improving that to reduce the power consumption of the sensors. Because these sensors consumed a lot of power. They were active infrared, so they sent out pulses of infrared light and looked at the reflection coming back. And to get good response time, you needed to reduce the signal or increase the signal to noise ratio. So that implied a lot of power output. And so, yeah, that consumed a lot of battery. And so the objective was to reduce the battery consumption. [00:08:03] Speaker C: Okay. [00:08:03] Speaker B: And that's where I got into the patent on the next technology piece. [00:08:06] Speaker C: Okay. And you and I published a paper on that. [00:08:08] Speaker B: We did. It was called the Photon Bridge. [00:08:10] Speaker C: The Photon Bridge. I remember that. [00:08:12] Speaker B: It was based on the idea of darkons. [00:08:14] Speaker C: Darkons. You guys know what a darkon. [00:08:15] Speaker B: Photons versus darkons. [00:08:17] Speaker C: Yeah. Darkons are absence of photons. It's probably like electrons and holes in semiconductors kind of. Yeah. Okay. So a darkon is the absence of a photon. So there's a lot more darkons than there are photons, I suspect, in the world. Right. Okay. So that's interesting. So optical sensors. Tell us about optical sensors. And maybe the door opener and the state of the door opener when you started to look at it. [00:08:42] Speaker B: Yeah. So once I had the patent on the photon bridge sensor, looking for other applications. [00:08:47] Speaker C: First of all, describe the photon bridge. [00:08:49] Speaker B: Yeah. So the basic idea of the photon bridge is to create a linearization of the pin photodiode. So pin photodiodes have non linearity. They have a lot of noise issues and kind of a dark response curve at the bottom end. And so you had to have some way to lift the curve up a little bit and also to create a more linear response so that when ambient light changes, it doesn't change the response of the sensor. So the basic idea was to create a summing junction at the pin photodiode. How do you do that? Summing junctions are made of the signal coming in and also a negative signal coming back, some feedback coming back to the diode or to the summing junction to create a negative or a null response. And so the idea of the photon bridge was, well, you have the light coming, you have an infrared emitter sending a beam out to the object that you're going to sense. The reflection is coming back, it's very weak, and then it's in pulse form. So the pulses are coming in. Of course, you amplify that. But before you amplify it, you send another set of optical pulses to the pin photodiode. But these pulses have to be in opposition to the pulses coming in. So you have to think of them as darkons. So you want to cancel out the light coming in this way by another stream of light coming in this way. How do you create darkons? Well, the basic idea was actually pretty simple. You just shine the LED light onto the pin photodiode all the time. And when the pulse is coming and you turn it off so you're creating a negative pulse, and this does the job, and everything is AC coupled, so the DC component falls out. That's it. [00:10:18] Speaker C: Okay. [00:10:18] Speaker B: That was a patent. [00:10:19] Speaker C: Yeah. Okay. We'll give Hal's email in case you have any questions about that explanation. But I remember visiting Russia during perestroika, you know, right when Russia was falling, and going to one of their fancy hotels and going in their elevator. And one of the things I noticed is that when the doors opened, you could not go like this, and quick keep the doors from closing anymore. They would just close in and they would crush your arms. So you did a lot of work on door openers. So what was the deal there? [00:10:49] Speaker B: Well, so the first real application, the first license deal I ever did, was for automatic doors, the kind of sliding doors you see in airports and so on and so forth, which are everywhere today. The problem was that in the door industry, there was no kind of light curtain or safety system. So the doors would oftentimes come closed on people, and people get injured. And there are a lot of lawsuits because of this. So children get knocked over, elderly people get knocked over, and of course, you don't want to hit people with these doors. So the basic idea that I developed was a light curtain from above using the sensor. So active infrared pulses of light coming down from the top of the door in a fan shape on both sides of the sliding door. And then Looking at the signal coming back. And again, using the photon bridge technology was ultra sensitive compared to the current state of the art at that time. And then processing that to see what the differences in reflectivity were. And it's really interesting because you think that dark clothing like this would be non reflective, but actually in the infrared spectrum it could be quite reflective. So it generally saw pretty much everything. And it solved basically a huge problem for that industry. And that was the first license deal I did, and that was to a Swedish company called BSEM out of Landskrona, Sweden. [00:11:57] Speaker C: Do you know whether or not that technology is still being used today? Sounds like a pretty universal. [00:12:02] Speaker B: I have no idea. [00:12:03] Speaker C: You have no idea? [00:12:04] Speaker B: I have no idea. I didn't track it after that. I got pretty busy with other stuff. [00:12:07] Speaker C: Okay. Another one was the faucet, the automatic faucet. Everybody has used the faucet where you run your hand under the faucet and the water starts coming out. Tell us a story about that. That's an interesting path. [00:12:19] Speaker B: So once I did the license for BSAM for the sliding doors, I was looking for other applications. The license agreement was specific to automatic doors, so that left the entire rest of the universe open for other license agreements for other applications. And one obvious one was automatic faucets. So stick your hands under the water, comes out. And in fact, they had a pretty big problem because they had a lack of sensitivity and there was color sensitivity. So depending on your skin color, it might not work and so on and so forth. And also they had issues with. [00:12:51] Speaker C: So what you're saying is some of these early faucet detectors were kind of racist? [00:12:55] Speaker B: A little bit, yeah. Yeah, they could be. [00:12:58] Speaker C: Okay, so you wanted to get around that. [00:13:00] Speaker B: Yeah. [00:13:00] Speaker C: Okay. [00:13:01] Speaker B: Yeah, yeah. But generally just to make it more sensitive and more reactive and have the potential for battery operation as well. So I worked on those and sold a bunch of licenses in that area to different faucet companies. [00:13:11] Speaker C: Okay. [00:13:11] Speaker A: Okay, I want to pause you for just a second. You said it was a super obvious application. What made it obvious to you? [00:13:19] Speaker B: To me? [00:13:19] Speaker C: Yeah. [00:13:20] Speaker A: You've got what I would call a technical trick, an understanding. You can use your efficient light reflecting measurement tool to measure a variety of things. I can imagine. Applications. We could make a list of 200 different applications. [00:13:36] Speaker B: Sure. [00:13:36] Speaker A: How did this one jump out at you? Why did you see this as the problem you could solve? [00:13:41] Speaker B: Well, like everybody else, I am out there in daily life and seeing things. And you know, you go to the restroom and airports and there are these automatic sensors. They didn't work very well. [00:13:49] Speaker A: So I remember the early days. [00:13:51] Speaker B: They didn't work very well. [00:13:52] Speaker C: There were crushed people lying all around. [00:13:56] Speaker B: So it just seemed kind of obvious that they might have an interest in that. And they did. They absolutely did. [00:14:00] Speaker A: I'm curious about those first phone calls. So you're calling a faucet company? [00:14:04] Speaker B: Yeah. There was no Internet at the time, of course. This was like 1992. Roughly. 93, 94, even earlier, actually. 19. No, actually, sorry. It goes around 19, not 92. Yeah. 87, 88. Yeah. I'm trying to think of the timeline. It's been a while now. It's a few years, but yeah, I would just go to the library and look up in directories of different industries and who are the major players. They generally had phone numbers and addresses. So I'd write letters to people or call them up. And it was cold calling, but that was okay. [00:14:39] Speaker A: How many companies did you contact? [00:14:41] Speaker B: Oh, dozens. It's a numbers game. [00:14:44] Speaker A: And how many responses. Thank you for that. I appreciate that. The numbers game reference, because I agree. I think this is one of those things where you have to have a lot of conversations to get traction, but. So dozens of contacts, attempts. How many conversations resulted and then how many hits? [00:15:01] Speaker B: Well, I got a lot, actually. You know, in this particular case, I hit it right on. For the faucet industry, that was. It's a really hot. Was a hot. [00:15:08] Speaker A: Serious pain point for them. [00:15:09] Speaker B: Serious pain point. [00:15:09] Speaker A: Yeah. [00:15:10] Speaker B: So I got responses from just about everybody. That doesn't mean I did a deal with everybody, but I did a deal with several. Okay. So, yeah, it was very worth doing. And again, it was pre Internet, so you had to wait and, you know, get responses and call people. And call people again. And so. But yeah, it was worth. [00:15:26] Speaker A: And some of these faucet companies would be international, right? I'm sorry, I'm diving. [00:15:29] Speaker B: No, they were really. No, they're really domestic. Mostly they're American. Yes. For example, TNS Brass, Sloan Valve Company, Chicago Faucets, in particular, these kind of companies. In fact, you go in the restroom here and you see these brands. Zurn was one of them. I think you have Zurn, I saw in the toilet. Zurin Flushers. So I talked to almost all these companies. It was pretty funny. [00:15:51] Speaker C: Wow. You used the term. I'm going to ask Bradley a question. You use the word pain point. What do you mean by that? [00:15:57] Speaker A: Pain point? That is, as entrepreneurs, we want to respond to pains that people have, and in this case, dysfunction in the faucet or errors in the faucet. If it's causing some sort of level of pain, in particular a level of pain that people would be willing to pay for a solution. That's where it gets interesting for us. And so I think it's interesting that, first of all, it came from your lived experience, which it doesn't always. Right. There's way more pains in the world than any particular individual would experience. But in this case, you hit on one that was very common and broad. [00:16:33] Speaker B: Right. [00:16:33] Speaker A: So we're looking for those broad potential marketplaces. So a lot of people having the pain or. Or a high value of the pain being experienced. [00:16:41] Speaker B: I also want to say that one of my objectives was to remain independent as an independent consultant, slash inventor. The inventor lifestyle of developing patents and doing licensing, getting checks in the mail. It's very attractive. You get all the holiday you want. You can do almost anything. It's a good life. It's a really good life. And you can use that money to parlay into other things that you might want to do, other kind of business opportunities or technologies. So I had a good income stream from these patent licenses. It was really, really good. That was kind of my dream. And I wanted to keep doing that because it was a lot of fun, too. I got to meet a lot of interesting people. I got flown to different countries. It's really a great lifestyle. There's a very dark side to this business, though, which I'll tell you in a little bit. But if you can conquer the dark side, it's a very alluring way to have a career. [00:17:30] Speaker A: I want to go back even a little further in your story, if I may. It took a lot of courage to step out from a place of employment, first with Nist and then later with Tektronics, and then to strike out on your own. Now, I know you had a contract in place. Maybe it was a side gig for you. In today's parlance, a side gig you had, but you leveraged that. How were you able to kind of wrap your mind around the courage necessary to step out on your own? [00:17:59] Speaker B: Oh, I was a very foolish guy. I didn't think too long and hard about it. There's power in the union. I always knew that I could go back and get a day job. So having that as a backstop obviously helps. So I just went to the very limit of whatever pain I could tolerate. And if it got too bad, I'd just go get a job. Right. So it's okay. It was cool. I didn't have expensive habits or expensive women or expensive anything. So I didn't have a lavish lifestyle to support. It was really just about getting out there and having this entrepreneurial attitude and developing something that people could use and something people would pay me for and I could live into retirement with a nice income stream. It's not a complicated proposition. Right. Just an interesting way to view a career option. Thank you. Unlimited holidays. You can work on the beach. What's wrong with that? [00:18:51] Speaker C: Before we get to the touchscreen and the evolution of your ideas on touchscreen, let's talk about the dark side. What are some of the dark sides that you've experienced as an entrepreneur and a developer? [00:19:02] Speaker B: Can we do that later in the. [00:19:03] Speaker C: You want to do it later in. [00:19:04] Speaker B: The context of you know who? [00:19:06] Speaker C: Oh, okay. Yeah, we'll do it later in the. [00:19:08] Speaker B: Context of you know who. [00:19:09] Speaker C: I have no idea who you know who is, but we'll go for that. Okay, well, the next one is something that everybody uses today, which is the modern touchscreen, which was an invention and patent, one of the 98 patents that Hal did. And I think it's just extraordinary. I mean, we all used automatic door openers. We all use the automatic faucets. We all use the football software, right? No, I guess we don't. That one kind of missed. But we all use the, you know, the modern touchscreen. But this did not happen at all at once. So how would you go through this? You developed different levels of the capacitive sensor for touchscreen, and yours wasn't the first touchscreen, but the previous ones were kind of stupid. Can we back up just a little bit, Scott? Consider myself back there. [00:20:02] Speaker B: So we didn't get to how I did the capacitive. We were talking about the optics. [00:20:06] Speaker C: Yeah. So the optical to the capacitive. Yes. [00:20:08] Speaker B: So one of the requirements I had from plumbing companies was to develop a sensor that could last for five years on batteries. And even the sensor I had couldn't do that. It could last for maybe a year, but they didn't want to replace the battery so often, and rechargeables were not a thing back in the. The early 90s. So I thought about other technologies to replace the optical sensor because it was just too power hungry. And I went through passive infrared, I went through rf, I went through whatever you can imagine, acoustic, everything. And finally I just hit on capacitive sensing. And I had the technical background to do capacitive sensors. But capacitive sensors at that point had a pretty sketchy history. They weren't very reliable. They were expensive, complicated. They weren't Self tuning. They were subject to interference from all kinds of radio sources and so on. So I went in with a little bit of trepidation to see if it was fraught with some risk. But hey, I was getting paid license money, so it was another activity to try. And in fact, I was able to develop a new kind of sensor, which I called the charge transfer sensor. And in this particular scenario, I would use just digital switches to charge and transfer charge from an object. And in doing so, you could measure extraneous capacitance. So if we took Bob's phone here as an example, if I may. [00:21:25] Speaker C: Yeah. Oh, please. [00:21:26] Speaker B: So if we wanted to turn this into a sensor, what we do is connect a wire to it. This is mostly metal, so we connect a wire to it and to a switch which charges this thing up to a particular voltage. Let's say it's 5 volts. Then we open the switch and that leaves the charge suspended on the phone. And then we have another switch which transfers that charge into a capacitor, which is a storage device. So almost all the charge is transferred into a much larger capacitor. You can measure the voltage on the capacitor, and that will give you an indication of how much capacitance was there. Now, if you change the capacitance by moving your hand around this object, you'll change the voltage on the storage capacitor by microvolts. Not very much, but enough. It depends on the signal to noise ratio, but enough to get some signal out of it. And the question was how to do that cheaply and economically and to make it very reliable. It turns out this digital method of capacitive sensing is extremely robust. You can do frequency hopping, you can do spread spectrum stuff, you can have narrow pulse widths and so on to suppress moisture films, and you can do all kinds of tricks with the switches. And they're very cheap, of course. And that was the basis of the next patent that I did, which was the charge transfer capacitive sensor. And that's what led me into all these other things we've been talking about. Including touch screens. [00:22:40] Speaker C: Including touchscreens. [00:22:41] Speaker B: Including touchscreens, yeah. [00:22:43] Speaker C: So you've shared with me the epiphany that you had. I would call it a flash of genius, where all of a sudden you had the realization that you could do something with a specific chip that later you found out that the manufacturer of the chip said you couldn't do, but you had this thought that raced through your head. So could you kind of reconstruct that scenario I think you were just sleeping at night or something, or trying to sleep with your mind racing. [00:23:09] Speaker B: Yeah, my mind is racing right now. At what point I should pick it up on that. So going from that particular circuit, which had a number of discrete components and a microcontroller and so on, it was still pretty expensive. But it did solve the plumbing problem. The question was how to reduce that in size and cost and make it really super small and super cheap. And the customers for this particular sensor that I just described were mostly industrial sensors and things where they could still tolerate some cost. And the plumbing companies, of course, they did a license for it in that business too, so that was okay. But for consumer devices, it was still way too expensive. We're talking maybe 20, $30. And so the question was, what do you do? And one night, falling asleep, I was mulling this over in my head and it just came to me that I could take a single chip micro, like an eight pin micro from microchip, you know, 12 LC, whatever it was, 508 or whatever, and manipulate the switches in the output ports between tri state mode and switching high and switching low. If you take two of those pins on the microcontroller, you develop a certain pattern on these switches and you have an external capacitor, which is the hold capacitor that I mentioned before, the storage capacitor that's between the two pins. And then you have a lead going out to the sensing plate and that's it. Just some firmware. And that was it. And the microcontroller was $0.30. So as soon as I realized that that one night I knew I hit gold. I just knew it and I knew it would work. And the next day I went into the lab and I tried it and it took me like half an hour to write the code and test it, and it worked. [00:24:46] Speaker C: You said as soon as you realized that you knew you were going to be rich, right? [00:24:49] Speaker B: I actually did think that. [00:24:50] Speaker C: Yeah. [00:24:51] Speaker B: Yeah, yeah, yeah. [00:24:51] Speaker C: Wow. [00:24:52] Speaker B: Sorry. So there were some steps in between the original sensor and that eight pin micro version. But at that time I already had a company in the uk and I don't know if you want to cover why I went to the uk. [00:25:06] Speaker C: Yeah, well, sure, let's do that. [00:25:08] Speaker B: Okay, so before we move on from. [00:25:10] Speaker A: This, I'm still stuck on the insight sort of moment, so clearly. And look, there's a lot of electrical engineers in the room. They're understanding a lot of what you're saying in terms of the, the technical, the technology and what I hear you Is you studied these things. There was a lot of input into your head about what are the specs on this chipset? You clearly understood what each of the pins was being used for, et cetera, et cetera. There's a lot of just knowledge that went. [00:25:35] Speaker B: I had the register model in my head, everything. [00:25:36] Speaker A: Exactly. But then there was a different moment or a different kind of thinking that produced this insight. Can you maybe just tease out a little bit of what you think was going on when you came to that realization? [00:25:50] Speaker B: I think there's a lot of subconscious work that goes on. If you have a problem that's stuck in your head for days and days and weeks, your subconscious is working on it, and just suddenly the answer just kind of pops out. And maybe the answer that pops out is wrong, but sometimes you just know when it's right. You just have that intuition that it's right. [00:26:08] Speaker A: But in this case, the company actually argued with you. They believed what you had. [00:26:11] Speaker B: That came later. That came much later. [00:26:12] Speaker A: Okay. [00:26:13] Speaker B: Yeah. Because I actually developed a whole business selling these chips before the company knew what I was doing. [00:26:17] Speaker A: Oh, wow. [00:26:18] Speaker B: And the reason they found out what I was doing was because I was selling so many of these chips, I couldn't buy the chips through distribution anymore. I had to have a direct account with the manufacturer. And at that point, they asked me what the heck I'm doing with these chips, Right? Because I'm buying reels of these chips, and I wanted them to do the programming. I wanted them put the firmware in for me because programming was a headache. [00:26:39] Speaker A: So you didn't have to flash it. [00:26:40] Speaker B: I needed to buy a big machine to do the programming in quantity and so on. So I didn't want to do the flashlight. I wanted them to do it. And I wanted to laser mark my company's logo on the top of the chip so it looked like my company. Right? So it was a bit of a Potemkin Village. But that's what a lot of companies do, right? They buy silicon. They put their own markings on top. So that was part of the strategy or the business plan. I was evolving as I was going on with this whole process. So I called Microchip, I called the local rep from the company, and he didn't want to talk to me. So I kept escalating up the Microchip chain. Microchip is Arizona. You guys probably don't know them. And I finally got to the CEO of Microchip, Steve sang. And Steve invited me to Arizona to the company. And he had meantime asked his engineers to evaluate my tech and see whether it was viable or not, and whether this goes because I'm asking for a direct account. This is now a board level kind of decision because we're doing lots and lots of these chips. So I got to his office. I was in his office boardroom, like this one here, and there are a bunch of his executives sitting around. I knew some of them. And Steve says to me, you know, we had our engineers analyze your stuff, and it doesn't work. It can't possibly work. Oh, boy. I said, why? Well, they said, I don't know. He wasn't a technical guy. He said, the switching arrangement, you know, it's just not going to work. It's impossible. All the engineers that looked at this said, it won't work. I said, we're selling thousands of your chips and it works, so what's your problem? And then one of the managers said, we don't want to do this direct agreement with Mr. Philip. We're not going to do it with him. And Steve Sange, to his credit, he stared them down and he said, yes, we are. I think this guy has something. And he gave me a direct account. [00:28:23] Speaker C: Wow. [00:28:23] Speaker B: And that changed the whole course of the company. So, yeah, I mean, I had to screw up the courage to call him in the first place. But setting up that meeting was really crucial, and it had to be face to face. You can't do this on Zoom Call. You really had to read body language. You have to really understand the subtleties of what's going on in the conversation. If you think you can run a tech company solely on Zoom Calls, you will not. It's not the best or most efficient way of doing it. The best way is you fly there, you sit down, you talk, you read the body language, you see what's going on in their minds. You see the faces of the other people in the room, which Zoom will filter out. You had to read it. You had to read the room. And so he gave me that. And we bought tens and hundreds of thousands of these chips, ungodly quantities of these chips. And this was. I had the company in the UK at that time. I had started my company in Florida, but I moved to the UK to do a joint venture and kind of missed that part of it. Okay, So I was in the UK and I had an accidental company because I was supposed to be doing a joint venture with a British company to sell this technology into the European market. I was only going to be there for two years. Yeah, it was an accidental company. Remember my Business model in my head was I was a sole guide selling license agreements. Right. So. And making money. And I can go have all the holidays I want. And in this case, this joint venture failed because the company couldn't uphold their part of the bargain. The quality was bad. They weren't putting the money into it. I took the technology back. This was around 1996. 97. 97 timeframe. And so I had customers at that point. And it's like, how do I support the customers on my own? I'm just a single guy operating out of a rental house in the south coast of England. So I had to start hiring people. And that's like the point of no return. [00:30:13] Speaker C: Why is that? Hiring people is a point of no return. [00:30:16] Speaker B: Then you have to have a corporation. [00:30:18] Speaker C: Oh, that's your accidental company. [00:30:20] Speaker A: And you have responsibilities. [00:30:21] Speaker B: And then you have to do payroll. [00:30:23] Speaker C: Okay, I gotcha. Gotcha. [00:30:24] Speaker B: And you have to do corporate taxes. And that's feeding on itself. It's a virtuous circle because now that you have an employee, you're more productive, so you're selling more. So now you have to hire more employees. Now you have to hire engineers. Now you have to hire accounting department. So I had an accidental company. It's kind of. I say that with a little bit of a smile because it wasn't truly accidental. Accidental, but it had that sort of flavor about it. It was not intended, let's put it that way. I didn't intend to start that company. I sort of fell into it and I kind of embraced it. I thought it was a pain in the. You know what. But I sort of went with the flow. I tried to write a business plan at some point. I tried to get venture capital at some point. This was the year 2000. I tried to get VC money. [00:31:08] Speaker C: I was just to point out you had never asked for a penny. Venture capital. [00:31:12] Speaker B: No, I was self funded. [00:31:13] Speaker C: All this was done in your own dime? [00:31:14] Speaker B: Yeah, it was all self funded. But remember, I had the revenue stream coming in from other patents. So this gave me sort of a base level of income that I could do other things with and invest into this operation. It wasn't huge amounts of money. We're not talking like even hundreds of thousands, like 50, 60,000 a year. It's sort of minimal. Right. But it was enough leverage, enough cash to give me some leverage to do what I needed to do for the company. And then the cash just kept coming in because the sales just went geometric, which is absolutely exponential. As soon as we started selling this little eight bit Microcontroller. That was the key moment for the business at that point. [00:31:50] Speaker C: So let me ask you, you were recognized by the Queen of England for your business. [00:31:54] Speaker B: That came much later. [00:31:54] Speaker C: That was later. [00:31:55] Speaker B: That was much later. Okay, that was before I sold the company. [00:31:57] Speaker C: Before you sold the company. Okay, so you were much bigger than what you were doing now. Okay, so is it time to go into the touchscreen? [00:32:04] Speaker B: No. [00:32:05] Speaker C: No. Okay, what's next? [00:32:09] Speaker B: Up until this point in time, I was doing single point touch sensors. So single channel. So you touch or proximity. What? Single channel stuff. But I soon realized you could expand it into a linear sensor so you could do a stripe sensor so you get analog output. So you'd have two sensors on two ends of a conductive strip or some geometric set of electrodes and you get a ratio of the two endpoints. And so I did that and produced a chip that did that and then found out that, okay, you can do a scroll wheel like on the ipod, so you could wrap it into a circle. So you can do that. That's three channels of sensing. And then I developed for General Electric in, well, not Niski in Louisville, Kentucky. They approached me around 1999. They wanted to have touch controls for their Monogram family of appliances. And it was like 60 touch buttons on a cooktop, on an oven, whatever. And so that was a lot of chips. And it wasn't really economical to expand it to that. [00:33:06] Speaker C: What were they trying to do with all these chips? [00:33:07] Speaker B: They were trying to do it's controls on the, on the stove or whatever it was, the micro, whatever it was. [00:33:12] Speaker A: The 20 or 30 controls. [00:33:14] Speaker B: Yeah, well, there's a keypad, there's a, you know, all the cook modes and you know, all this stuff, typical stuff that got up towards 60 on some of these. [00:33:20] Speaker C: Wow. [00:33:21] Speaker B: Huge numbers of buttons. [00:33:22] Speaker C: That sounds like something that custom labeled mode buttons. They call it feature creep. It was feature. [00:33:28] Speaker B: So the question was, how do you do that with the current technology that it had? And I knew that I couldn't commercially adapt the technology I had to this kind of application. It was a lot of channels of sensing. So I tried to figure out how to make it into a matrix. In a matrix you have cross wires like this. So you have electrodes that are emitting pulses sequentially. So pulse this one, then this one, this one, this one. And then you have other electrodes that cross, they don't touch, but there's a dielectric in between. And then you're receiving the charge through a dielectric, say like a plastic layer or A glass layer in between, and you're receiving charge on these electrodes and you can differentiate all 16, in this case 4x4, you can differentiate all 16 nodes independently. They're completely independent channels. There's no crosstalk at all. And so that was the basis for the General Electric contract, and that was around 1999. And so I developed that technology and in fact it was very cheap to produce. Again, the external circuitry was very minimal and that was a very successful contract. When I did that contract, I then realized that once you had this XY matrix of sensors, you could interpolate between the two of them and that gives you a touchscreen. So you just had to have them in a regular arrangement. And you got the individual channel outputs from every crossing. Every crossing generates an output. Even just eight bits is enough. And then you take the next channels around it and by using ratio metric analysis, you can figure out where the finger is touching on a two dimensional surface. So that became another set of patents. [00:35:01] Speaker C: Is that basically the same sort of touchscreen we use today? [00:35:04] Speaker B: It is, it is, yeah. They're all based on the same principle. [00:35:07] Speaker C: But your patent is expired. [00:35:09] Speaker B: Yeah, sadly. But I don't get any money from it now, even since I sold the company. That's another question. [00:35:15] Speaker C: What surprises me about you, Hal, is that once your patent expires, you don't keep track of the technology anymore. You just kind of. [00:35:21] Speaker B: No, I let go. [00:35:22] Speaker C: You let go and you go on to the next. So it's always about the adventure of the next step. [00:35:27] Speaker B: You want to talk about Apple next? [00:35:29] Speaker C: Talk about Apple. Yes, let's talk about Apple. One of the things that Hal taught me is that when you get a patent, a patent is only a license to sue. Nobody else is going to defend your patent at all. You have to. So it's a license to sue the. So this is the parable that goes with that saying? [00:35:48] Speaker B: Correct. So if somebody steals your car, you call the police. If somebody steals your patent, you're stuck. You have to pay money, a lot of money to defend your patent. It's just the way the world works. And that's the dark side of inventions. Because if you have a really great idea, people will steal your patent. It's guaranteed. Don't think otherwise. It's absolutely guaranteed. And if you can't defend your patent, if you don't have the resources to defend your patent, the rest of the world will get the message that you're a soft touch, that you're weak. Somebody stole it already. You didn't do anything about it. So everybody's gonna steal it and then you have nothing left. That's the real world. That's the real world. A patent is a license to sue. That's all it is. [00:36:31] Speaker C: So you had license to Motorola, Samsung, GE and Apple. But then something happened with Apple that raised your eyebrows. Could you go into that? [00:36:40] Speaker B: Yeah, well, Apple was one of the first licenses I did with this technology. One of the very first. The other cases with the capacity I was really selling, except for the automatic faucets of course. But in the case of Apple, I was just from a marketing perspective. I was a one man band, okay? I had a very small company around the year 2000 and I had like five people at that point in time. So I was doing my own sales and marketing and I was writing articles and so on. So the principal means of marketing was actually writing articles for trade journals. So I'm pretty good at writing and so at least I think I am. So I'd write an article about an application of one of my patents. I would do the drawings. I would have a professional photographer do a very nice photograph and I would submit it to for example, Sensors magazine or Appliance magazine or any of these commercial trade magazines. And every time I would get on the front cover. The front cover, not buried on page 65, it was the front cover. Why? Because I had a great photograph. That's was a beautiful photo Abstract. The photographer I hired was amazing. This is all pre digital stuff, right? So this is late 90s and all analog with film and everything, you know, so. But did a great job and I submitted those and I got on the COVID every time. I have so many covers in magazines I stopped counting. And one of those magazines was read by an engineer at Apple, his name was Chris Crawford and he was working on the G4 power cube, which is around the year 2000. I don't know if some of you remember that it was a box, a cube, a passive radiator. Didn't have a fan in it. It was one of Jony Ives creations, I guess. And it had a capacitive touch button on it because Steve Jobs had decreed that they would use capacitive touch. It was sexy, it was cool. The problem, as Chris Grah described to me, was that their capacitive Sensor cost about $35 and didn't work worth a damn. So when your phone went off next to the computer, it would switch it on and off. If your cat went by, it would switch it on and off. So not very reliable and horribly expensive. Crisscross saw my chip I was selling through distribution at the time through Digikey, which some of you may know. And it was a catalog item along with a bunch of other derivations that I had going through Digike. He bought one and he stuck it in the computer and it worked first time. And the cost was about a buck fifty or something like that. So that's what the retail price was in small quantities. And so I got a call from him and an invite to come to Cupertino. So I did. I went out there and had a conversation. And it turned out the G4 was quickly discontinued. So I didn't get in there. But Chris Craw went over to the monitors group and it was decreed then that they would put my chip into their monitors. So, yeah, the desktop monitors. And that was just the single point sensor. It was nothing sexy, nothing fancy, just on, off, you know, and menu functions. So the senior buyer for Apple that was involved in this transaction called me and said that they couldn't possibly do business with my company, which was Quantum Research Group, by the way, if you want to look it up. Couldn't possibly do business with us because we're too small. We had maybe eight people or something, and it was a liability for them. You know, if we went bankrupt, then the supply chain would be disrupted, and you just can't do that. So that's a lesson in business right there. You have to find an alternative means to market if you're too small sometimes. In this case, I said, well, how about licensing it? Because I knew license models, right? So I said, let's license it. Yeah, we do licensing all the time. We'll license it. So I wrote a license agreement with Apple. So it went into their monitors, and that ran for, I think, five years or so. Microchip was selling the actual chips themselves directly to the suppliers in Japan and Korea. And I was getting royalties. My company was getting royalties, which was very cool. They got very angry with me, though, because I refused to sign the terms and conditions that Apple laid out. They first signed the contract, the license agreement. Then they presented me the T's and C's after that. And I read terms and conditions, and I read the terms and conditions, said that I will not work with any competitor for Apple for the rest of my career. And I said, no, I don't think so. Thank you very much. And that made them very angry. [00:40:52] Speaker A: Yeah, can we go back to the. So they did not. They rejected you as a direct supplier, but were okay with licensing? [00:41:00] Speaker B: Yes, because the supplier was then Microchipped directly. Which is a Fortune 500 type company. [00:41:05] Speaker A: Right. So did they specify the parameter on which they rejected you? I know. Supplier evaluation. Supplier qualification is a big issue in supply chain management. Operations management. [00:41:15] Speaker B: Too small. That's it. [00:41:16] Speaker A: Just too small. [00:41:17] Speaker B: Just too small. Okay, yeah, they just wouldn't work with a tiny micro sized company. Okay, yeah, that's it. All right. [00:41:24] Speaker A: But they were comfortable with the license and so. [00:41:27] Speaker B: Yeah, and my pack of tricks was licensing agreements. [00:41:31] Speaker A: Okay, so how did you get past their terms and conditions? [00:41:33] Speaker B: I didn't, I just didn't sign them. Oh, okay. Yeah. And the manager was fired the next week. Oh. Because he screwed up. He should have presented the T's and C's first. [00:41:43] Speaker C: I see. [00:41:44] Speaker B: Yeah, I know his name. I'm not going to repeat it here. [00:41:47] Speaker C: Okay. But his initials were. No, don't, don't go there. [00:41:55] Speaker B: That was really something. And so I guess Steve Jobs got really angry with me. So that colored the rest of the relationship with Apple. Not in a good way, but I didn't know it had gotten that bad. So when I developed the touch screen, I took some models to Cupertino and I met with Jony, I've and a team of engineers and managers again in a conference room about this size. And they oohed and ahhed over it. And I had a private meeting with Jony I've afterwards and all that stuff. And I said yeah, we'll get back to you. They never did. They never did. And the rest is kind of history. They stole everything from that point on. Everything. There wasn't a patent that I had that they probably didn't steel in some fashion in terms of capacitive sensing at that point in time. [00:42:41] Speaker C: So that's the reputation for some of the larger companies. They use your technology without considering the ownership at all. And then if you get cross with them, you either go to court and if you don't have the resources, you lose your shirt. If you do have the resources. Well, the legal thing plays out and sometimes they come to you and say, we'll buy your company, we'll give you few million dollars and we'll just buy your company. And to heck with you. So elaborate on that. And what Apple did and what you did in response to that and the idea that patents give you a license to sue. [00:43:19] Speaker B: Sure. So once I realized what they were doing, it was again a survival thing that kind of kicked in. Either I sued them or I would lose the company eventually. It's just a matter of time because everybody in the industry knew what was going on. They all took apart Apple products. And I got calls from people. So you got to deal with Apple? No, actually don't, because they knew whose tech was in there. So Motorola, for example, I quickly licensed Motorola when they were still in the handset business. So they got a touchscreen license from me. They didn't develop it to the degree that Apple did later, but around about 2005, I was kind of pleading with Apple, the legal department, to do business with me and to to be honest and to be ethical and all the things they claim to be as a company. My lawyer explained to me that basically, companies like Apple, big American companies, are, let's say they're a little ethically challenged. What they will do is they'll take what they want in the marketplace. They see a good idea, they steal it, and they just wait for the pennies to drop, see if anything happens after that. In many cases, if you're a tiny company, you don't have the resources to sue. So it slides by. And eventually, like I said, you lose your company. In some cases, if you think you have the money to sue, you go and sue them, but then you go bankrupt from the legal fees. [00:44:36] Speaker C: You have to have deep pockets. [00:44:37] Speaker B: You have to have really deep pockets to sue. And so I was faced with this conundrum. So it took me about a year to figure out whether this was the proper course, what the proper course was. And I did sue them in 2006. And the lawsuit involved several things. It involved, first of all, the trackpad on the notebook, which was mine. It involved the iPad, which was mine. Involved the mouse. They called it the mighty mouse. It had a capacitive switch in it that was mine. And the scroll wheel on the ipod, that was mine. They took all those things without permission. Just about everything I'd done to that point in time was mine. And their attitude was, well, sue us. Okay, so you have to sue them. [00:45:23] Speaker C: So you did. [00:45:24] Speaker B: I did. Fortunately, as a company, we were doing really super well. Between license agreements and money coming in from that, money coming in from chip sales, we were really flying pretty high. And we had a lot of cash in the bank. And remember, we had no venture capital. So I ran the company extremely tight, really super tight. And there was no fluff in that organization whatsoever. We had secondhand office furniture. We were sub lending from a company that was slowly going bankrupt and expanding into their space. So we optimized our rental needs so we had the cash. And so 2006 came around and they weren't responding. And my Lawyer was saying, you're not going to get anything out of them. It's like squeezing a rock. So I filed a lawsuit, and in 2007, I spent 3 million just in that year alone on litigation, on legal fees. [00:46:18] Speaker C: Oh, my gosh. [00:46:19] Speaker B: Just against Apple. 90% of it was against Apple. We had other lawsuits as well, but that was a major one. And then there was a discovery process. So if you sue somebody in civil court, they have the chance to go through your file cabinets and all your electronic records and everything, and you have to produce these. So you need staff to do all that and produce all these documents and upload them to a cloud storage facility. [00:46:43] Speaker C: That's discovery. [00:46:44] Speaker B: That's discovery. [00:46:45] Speaker C: It's only in the U.S. it's. [00:46:46] Speaker B: Yeah, well, yes, it's mostly in the U.S. mostly in the U.S. there's some limited discovery in the UK, but, yeah, that's us. But the lawsuit was the U.S. so I had to play by U.S. rules. So that was very disruptive. All that is very disruptive to your organization. All your people are involved in this sideshow. That has no bearing on your actual business, but you have to do it. And it's a bit disheartening, honestly, but we won the Markman hearing. The Markman hearing is where the judge will decide on your claims. And I had something like 20 claims in the dominant patent that they were violating that the lawsuit was about. And one of the claims was disallowed, only one out of the 20. And so the lawsuit was allowed to proceed to trial. And then the iPhone came out in 2007. So this is the following year. And when the iPhone came out, we opened that up and realized that there was another patent involved. And my lawyer said, well, you're gonna have to file a second lawsuit. And it's like, okay, well, yeah. [00:47:54] Speaker C: And so you did. [00:47:56] Speaker B: No, I didn't. You didn't? No. I decided to sell the company. [00:47:58] Speaker C: Okay. [00:47:59] Speaker B: There comes a point where, you know, you have to get out. This is really, really critical. You have to know when to leave. You have to know when you're at your peak and when it's time to go. I woke up one morning and I said, this isn't fun. Just not having a good time. It wasn't about the money. It was just not having a good time. So I made one phone call and I sold the company to my principal supplier, which was Atmel in San Jose. Atmel does the AVR family, they were bought up later by Microchip. There's a really interesting story involving Microchip. And Atmel, but that's for another time maybe. [00:48:33] Speaker C: Okay. [00:48:33] Speaker B: Yeah, there was a lot of rivalry. Anyway. Yeah, I knew the CEO because I'd just done a license agreement with them. So I knew the CEO and I called him up and he said, I'll be on a plane as soon as I can. A couple days. Meanwhile, don't talk to anybody else. I'll make you an offer you can't refuse. Yeah. [00:48:50] Speaker C: Did he have a hat on his lap? [00:48:52] Speaker B: Yeah, he did. He did. [00:48:57] Speaker A: I know none of us like to spend a lot of money on locks for our doors, but a good defense is necessary. And clearly in this case, you needed to activate those defensive mechanisms. Like a lawsuit. [00:49:09] Speaker B: Yeah. [00:49:10] Speaker A: What was it that triggered you? You said it took a year to decide to go to court. And by the way, you're not the only small business that has decided to do this. Would be interesting to kind of dig up the various stories. I know Mazamo continues to play out with their oxygen sensor and heart rate sensors in the watch, but I'm just curious about that decision, how you came to the conclusion, okay, it's time. We have to activate this. We have to do this. [00:49:40] Speaker B: Well, it was just the fact that they weren't responding. I really did put in a lot of good faith effort and communication to their legal team and to their management to try to do business with me and honestly accept a license agreement and pay money. And they were just stonewalling. And also I was looking at the financial situation of the company, the other things the company was involved in at that point. And so it's a kind of a balancing act. It's not just about deciding to sue, but also when to sue and knowing that you have the resources to back it up. Right. So if I had run out of cash, if the company run out of cash during the middle of the lawsuit, then it would have been a catastrophe. That what happens next is that you go bankrupt. And then Apple, for example, could buy the company out of bankruptcy and get all the patents. It kind of works like that. So it's a very dangerous game. It's really super dangerous. There's no backup plan, really. You either do it or you don't do it. And so I did it and we were winning. Except that again, I had to file another. Would have had to file another lawsuit, civil suit, and go through the discovery process again and pay another 3 million a year and whatever. And by the way, even if you win the litigation in civil court, that doesn't mean you actually win the overall case. You can win the battle but lose the war. So they can appeal that decision through the appeals process and it could take you 10 years to get your money. Even more, there's the infamous case of the automatic windshield wiper, which is like a 1960s patent or something. And this went on for like 20 years. The guy got it just before he died. He got the money finally and he got like 20 cents out of the dollar of what he was really owed. And the other trick that they will do is an Apple, for example, or any company in this kind of scenario might offer you 10 cents on the dollar just to make the whole thing go away. So you think you got something, but actually they got off really cheap and that just makes the whole thing go away, right? Yeah. Do you really want to do that? Not really, no. [00:51:43] Speaker C: You know the case where they had the automatic windshield wiper? They made that into a movie called Flash a genius. [00:51:48] Speaker B: Did they? [00:51:48] Speaker C: Yeah. And so that's if you want to watch the story in a pseudo documentary where actors play out things. It's a good thing to watch, but it really shows the difficulty of going up against a Goliath when you're a. [00:52:01] Speaker B: Little David, you know, it's a very amoral business. There's no ethics involved. The company can spout all they want in public about ethics and morality. How they treat smaller, small suppliers is bs. At the end of the day, they do what they want to do. That's just the way the world works. That's just the way the world works. [00:52:19] Speaker A: So has this changed you, this experience as an entrepreneur, as an individual, has living through that attack and defense changed you? [00:52:29] Speaker B: Yeah, I don't want to get back in that business, that's for sure. It was a bit traumatic. I mean, I won the battle because the lawsuits went with the company when I sold the company. And Atmel picked up all the litigation and settled with Apple. So they did their thing. But meanwhile I got paid. So I had a really good positive outcome. And since I didn't have venture capital, I basically owned the whole company. I had a stock option program and so on. So some percentages went to friends and family who supported me in the early days and employees and so on. That's great. But I didn't have to pay off a VC house, so it was mine, basically. And that was nice. So that was anti traumatic. That was a good part, Right? [00:53:10] Speaker A: Right. [00:53:10] Speaker B: That was a good result. Would I do it again if I knew what I was facing from the very start? Not so sure. [00:53:18] Speaker A: So what's the vision now? [00:53:20] Speaker B: I'M retired. [00:53:21] Speaker A: Well, let me enter fiction land then for a moment. If you were going to continue working, continue inventing, would it be back as the solo inventor licensor? [00:53:34] Speaker B: That's a tough one. It is a lot of fun. You get so much euphoria out of doing that. But it's also a bit manic depressive too. You have some really great times, really great successes. The eureka moments come and you're flying high and you do a license agreement, you're really flying high. And then somebody, you know, steals your patent and it's like you're down in the cellar, you know, so it's, it's really a roller coaster ride in shark infested waters as well. Would I do it again? That's really tough. That's really, I don't know, it's hard to second guess. [00:54:09] Speaker A: Yeah. [00:54:10] Speaker B: I tell people, don't try this at home. It's a very dangerous game. I didn't know, you know, I did it because I was ignorant of the dangers. Honestly, I had no idea, no way to predict it would be this dangerous and this stressful. And if I had known, I probably would have said no. I'll just get a day job, right? Yeah. [00:54:30] Speaker A: Well, this kind of may be a good time to transition to recommendations. I think it'd be very interesting, particularly since we have some young potential entrepreneurs in the room as well as some experienced entrepreneurs in the room. What advice would you be giving to, to especially engineers who are considering it? What guidance would you give them maybe to protect them from these moments of stress? [00:54:52] Speaker C: I will tell you just a little footnote on that. In engineering at universities, we teach people to go to work for Boeing, Motorola, Tektronics. We don't teach them about the possibility of entrepreneurism. And hopefully we can put something together which, which emphasizes that a little bit more because that's just not an option. So I think your advice is going to be very useful. [00:55:16] Speaker B: Yeah, you know, I think if I were to do it over again, I would probably get a little more assistance. I would probably associate with a larger organization in some fashion and cut a deal. So size matters in this business. So if you're a large corporate, you get respect and they are not so likely to cheat. That being said, I don't know if any of you know, but the name iPhone was stolen from Cisco. That's how ballsy these guys are. Absolutely. IPhone was a VoIP phone from Cisco. [00:55:46] Speaker C: VoIP. I'm not sure. [00:55:48] Speaker B: VoIP voiceover IP oh, okay. And they just decided to steal the name and Let the chips fall where they may. And apparently Steve Jobs did a deal with Cisco and secured the name finally. I don't know how much he paid her. I think it's all a private settlement. But, you know, even being big is not a guarantee. But it's certainly helpful and certainly in terms of financial backing. So being affiliated with a larger organization that has a little bit of moxie, a little bit of presence in the marketplace and financial backing is useful. Getting VC backing might be useful too, but then you give up a lot of your company, so it's a balancing act. Right. So what should you want to do? [00:56:26] Speaker A: What about co founders? Maybe having a team instead of an individual? [00:56:30] Speaker B: Sure, that could be helpful. Yeah, co founders. But then if you're going to build a team, I mean, the classic Silicon Valley route is you've got to team together and get VC money. And so you have a step function capability and financial backing. So that's really not a bad route, and that's why people do that. But in the context of what I did, you have to understand that I just wanted to be a solo operator. I didn't want to do that. I didn't want to have a company, I didn't want to have a team. I didn't want any of these things. I just wanted to be able to go to the Bahamas, go on vacation and have a nice life. And it didn't work out that way, but that was my whole mindset and that's why I went down that path and I sort of organically fell into this path that went down this road of ending up setting up a company in England and then getting involved in all this stuff. And yeah, it is what it is. So it wasn't necessarily optimal, but it's my particular story and I wouldn't necessarily advise it for other people, but it. [00:57:37] Speaker C: Looks like it's having a happy ending here, right? [00:57:40] Speaker B: Yeah. [00:57:40] Speaker C: Okay. And Hal lived happily ever after after the story is over. [00:57:45] Speaker B: Mostly. [00:57:46] Speaker C: Mostly. Okay. [00:57:48] Speaker B: Mostly. [00:57:49] Speaker C: Okay. Any other thoughts? [00:57:52] Speaker B: No. [00:57:53] Speaker A: Wonderful stories. And I appreciate in particular the story of patents, licensing and being bought out. So thank you for sharing. [00:58:01] Speaker B: You're welcome. [00:58:02] Speaker C: One other dark side is your experience with trolls. [00:58:06] Speaker B: Oh, yeah, trolls. [00:58:07] Speaker C: People would call him up, recognize he was rich, and say, you violated my patent and I'm going to take you to court unless you paid me money. Some of these are just nuisances. [00:58:17] Speaker B: I had one in particular. The guy used to be patent counsel for Texas Instruments, and he went to a little company called Nartron in Michigan, and he was a professional patent Troll. He had a deal with this law firm where the law firm would collect a percentage of the action of whatever he could shake down from companies. And he shook down General Electric to the tune of maybe 5 or 6 million. They just paid the money. He accused them of violating his patents. He had some very old capacitive patents. It didn't affect anything that I was doing, certainly. And he just filed a lawsuit against General Electric. They just had the policy of just paying people off. No protest, just paid them off. Then I knew this guy. He was kind of an operator in the business. And then he came to me and he said, you're violating my patents. It was complete tosh. It was rubbish. And I decided to fight him. So again, his business model, he was in Michigan. He was in. Was Grand. Grand what Michigan was? Grand Rapids. Grand Rapids, Michigan, I think it was. Yeah, thank you. I've been out of the states too long, and his law firm was in Detroit or something. But anyway, the lawsuits were all being done in Michigan, and the law firm had its own expenses to pay, and that's it. So there was almost no out of pocket for these guys. So the company, Nartron, didn't really have to pay the law firm anything to do these lawsuits. It was a joint venture between these two organizations, the company and the law firm. So that was the Achilles heel. So all I had to find was whether this company, Nartron, was selling product in Pennsylvania, because I had a base in Pennsylvania and a law firm in Pennsylvania at that time. And indeed, he had sold to an army depot, some technology, something recently at that time in Pennsylvania. So I had found that out through something in the press. So I had my Pittsburgh law firm file suit against Nartron preemptively before he could file a suit against. He had been threatening to file a suit for, like, several weeks. That gave me the basis to file a countersuit even before he filed his primary suit. And I did it in Pittsburgh, Pennsylvania, which is the town where I grew up. And they fought that tooth and nail, because suddenly they would have to hire a Pittsburgh law firm and pay money to a law firm that's not their business model, and they could potentially lose. So that's a very aggressive move to try to get them out of their home turf. And in fact, he screamed uncle at the end of the day because he knew he would lose the case because they had no basis for the lawsuit. It was just a shakedown. He was just expecting to pay money. And so we settled, and that was that. He went away. [01:01:07] Speaker C: He went Away. Wow. Well, I tell you what, with Bradley's permission, if anybody has any questions, if they'd like to ask Hal, we can open it up for Q and A. Is that okay? [01:01:20] Speaker B: Yeah, sure. [01:01:21] Speaker C: One of the things, Hal is here from Switzerland. He's still suffering from jet lag a little bit. Right. You doing okay? [01:01:26] Speaker B: If I'm talking gibberish, it's. [01:01:27] Speaker C: No, no. It's a fascinating story, isn't it? Just fascinating. So if anybody has any questions, now would be a good time to think about it. Do you have any regrets? I think one of the things you said you created a generation of zombies or something. [01:01:45] Speaker B: Yeah, yeah, yeah, I do say that. I think it is true. It's true that without the touchscreen you would have no iPhone. It simply wouldn't exist. They would have had to find some other technology. The technology at the time were resistive where you're pressing two layers into each other. An overlaying plastic layer with microdot spacers into an underlying layer. Indium tin oxide matrix. Yeah. But it wasn't interpolative, so it didn't give you infinite, nearly infinite or essentially infinite resolution and certainly no multi touch. So doing it from underside a piece of glass was totally novel. It was only my technology that could do that. And so without that, you wouldn't have the phones that you have today. Eventually somebody would have done it, sure. But to his credit, Steve Jobs was a visionary and he's the one who put this together. And I owe him a huge debt of gratitude because even though he stole everything, he actually gave it recognition for what it was and made my company worth a lot of money. Because everybody knew where the iPhone came from, really where the key technology came from. And I was recognized for that throughout the industry. Everybody knew I'd been talking to all of them for years, including Nokia and rim in Canada. BlackBerry, who rejected the technology, by the way. So you know what happened to them. So it made my company grow and have the valuation it did now. Could it have been worth more? Yeah, absolutely. Absolutely could have been worth a lot more had they dealt with my company honestly. But nevertheless, the result was very satisfying. Pretty happy. You know, I could have done a lot worse if he hadn't stolen it or done anything with it, then my company would just continue to grow. Yeah, nice exponential ramp. And I would not have exited so soon. But you also wouldn't have the iPhone, which is a key piece of technology for the 21st century. [01:03:41] Speaker C: No social media or minimal social media. [01:03:43] Speaker B: Well, there's that too. So the App Store and all the social everything. It has created a generation of zombies, as we all know, people texting across the table from each other to each other. It's a little bit sad, quite honestly. I think it's removed a lot of direct personal interaction. This is quite sad. [01:04:00] Speaker A: We have a question. [01:04:01] Speaker D: I'd love if you could generalize a little bit more about your thoughts on the patent system and any possible reforms. The standard story that we teach when we analyze innovation is that there's some unfortunate consequences of patenting models. What we usually focus on is the fact that for the duration of that patent, the patent holder has a monopoly on the technology, can charge monopoly prices, earn monopoly profits. The way we explain this is, well, there's a trade off. We have to issue these two temporary legal monopolies to induce people to invent things. And that on balance, having the kind of patent system like we have in the U.S. most Western countries, increases the amount of useful and valuable innovation that we get in society. From reading many accounts of how the patent system works in practice, including some of your stories today, that standard story seems less and less obvious given, given that companies, in particular large companies, are using technologies that they find to be valuable whether they're patented or not, that the outcome of patent litigation depends on all kinds of factors other than the underlying merits. Patent trolling. People talk about patent thickets and the inability to bring useful innovations to market because there are so many. They could infringe on so many patents, potential patent holders, rights. Would we be better off in a world with no patent law whatsoever or with a different kind of patent law from the one that we have today? [01:05:32] Speaker B: So I haven't thought too deeply about that subject, but it is a really interesting subject and worthy of further analysis. I think the patent system we have today is actually pretty good. It doesn't really protect small inventors like myself, but overall it certainly does foster development and innovation. There's a profit incentive to have something innovative and to have that monopoly. I think that's good. Patent pools are interesting. In the handset business, for example, patents are typically pooled into collections which are then licensed and so on. So there are free market approaches to making the technology more universally available. And among giant large corporates, patents are typically used to defend their own product lines, but also as a means of bartering. So big corporates will barter patents with other corporates. So I've got these six patents that you want and you got 10 patents that I want. And so let's do a deal. [01:06:26] Speaker D: Robert, does that lead to over patenting. Patenting simply to have a large portfolio you use in bargaining rather than patenting, to be able to bring things to market. [01:06:34] Speaker B: Yeah, I think there is abuse like that. Absolutely. I've seen a lot of patents which are just not worth the paper they're printed on, but then the court system has to sort it out. And again, that's a very expensive proposition. Or if you think a patent is very weak, you just violate it. I mean, the standard approach in patent. What's the right word here? So in dealing with people with other patents that you want is you try to knock them out so you find some prior art. Maybe the examiner missed that in the examination process, and you feel like you have a very strong position to go ahead and utilize that patent. Not contractually, but just use it and then let the chips fall where they may. And Apple certainly tried to knock out my claims. They didn't succeed. So there is a process for all these things. Is it perfect? No. I can't think of a better approach than what we have currently today. Some things could be streamlined. The patent examination process, to my mind is too long. Three years to get a patent is just way unacceptable. It should be one year max. And it's not terribly expensive to get a patent. But if you're going to get global patents, that is a very expensive proposition. Of course, for a small company, what else could you improve? Yeah, I don't know what else you could really do. I mean, maybe some things in the civil litigation process could be streamlined, maybe cutting short some of the appeals processes so these things don't drag out for decades. That could be improved. Discovery I've heard was improved recently. Somebody told me that. I'm not familiar with the details, but I understand that discovery has been cut back quite substantially. So that's also helpful for small entrepreneurs. Does that answer your question? [01:08:17] Speaker C: Yeah. [01:08:17] Speaker D: Thank you. [01:08:18] Speaker B: Okay, great. [01:08:19] Speaker C: Anything else? You know, another thing that Apple stole? Okay, backstory. I asked my class graduate class in electrical engineering if they knew who Paul McCartney was. Half of them didn't know. Okay. So Paul McCartney was a member of the Beatles. And one of the things the Beatles did is they founded their own record label, which was Apple, which was taken by Steve Jobs. And there was a big litigation between the Beatles, Apple and Steve Jobs, Apple who owned that trademark. And I forget the outcome, but, you know, it was a. It was an ugly thing. So this goes into the history of just people taking other people's things if they can. [01:09:05] Speaker B: Shark infested waters. [01:09:06] Speaker C: Shark infested waters. [01:09:08] Speaker B: Seriously. [01:09:08] Speaker C: Okay, yeah. Go ahead. [01:09:11] Speaker B: What I'm most curious about right now is the different levels of dependence versus independence that you can approach entrepreneurship life with. For example, do you just. There's from the complete independence, it's you and your garage, you've got some ideas and you're contracting and stuff like that. And the opposite end of the spectrum is you're working a 9 to 5 with a company that you don't really get to keep any of the intellectual property that you end up coming up with, it all gets transferred over. So I imagine somewhere in there there's an optimal middle ground. Let's say you make a small company and spin it off before, like spin it off in the growth period or something like that. What are your thoughts on kind of the middle ground there or what would be an optimal spot? I think if you're starting out as I did, you need to find your footing and to get comfortable with operating solo. A middle ground could consist of Bradley, as you mentioned, having a small team or something like that, having co ventures in this process and keeping it small and lean. That could be a middle ground. I think that's a very useful way to go about it just to have some other people with you. And if you have a really great idea and the patent looks pretty solid, certainly go for some outside money to support you support the company. So again, I was completely a bootstrap operation. And that's tough. That's really tough. I was fortunate because I had previous license agreements which paid me money so I would not be on the street with a shopping cart under a bridge. But on the other hand, it still was pretty tight and I had to manage the money very, very carefully. So yeah, there's stress points you have to avoid and operating completely solo will give you a lot of stress for sure if you play this game. [01:11:16] Speaker A: Could you talk a little bit about patent strategy? You mentioned that you got a singular patent. We just brought up the idea of patent thickets. I appreciate that. And I know a lot of the startups where working with end up applying for a wide variety of patents to establish some white space in the patent literature to create a lot of layers of protection. [01:11:41] Speaker B: Sure. Would you do that ring fencing? I did that. [01:11:44] Speaker A: Okay. All right. [01:11:45] Speaker B: Yeah. Ring fencing is a very valid approach. And yeah, you could say it's a thicket and some of the patents are very weak, but that's the way the game is played. So the more patents you have, the stronger your defensive position is in case you're attacked for sure. Because your opposition now knows they have to knock out not just your primary patent, but all these other secondary patents that relate to the application of that primary patent. So it's a valid defensive position to take. And I did that in my company. Absolutely. We did a lot of application type patents, not just on the core technology application patents. So that's the ring fencing part to create the moat that prevents direct attack on everything else that you have. [01:12:28] Speaker A: Wonderful. [01:12:29] Speaker B: So for a small business, if you can afford the patents, I think that's a legitimate thing to do. And I would not change that system. [01:12:35] Speaker D: Yeah, I guess the larger, I mean, you know, from a societal point of view. [01:12:39] Speaker B: Sure. [01:12:39] Speaker D: If we subtract off all of the expense, legal fees, opportunity, cost of time involving strategic maneuvering to protect our ip, you have. Somehow we have to subtract that from the benefits of the innovation that's induced by the ip. The net impact may be smaller than what an intro textbook on patenting would suggest. The net societal impact may be smaller. So you're talking about you could reduce the amount of. Why 17 years? Make it 10 years or 8 years or why not 30 years? I mean, there's all kinds of things. [01:13:15] Speaker B: It's arbitrary. It used to be 17 years from grant and now it's 20 years from filing. So that's a differential of three years, which was the typical theory. [01:13:24] Speaker D: Doesn't tell us what those numbers and what those starting points should be. [01:13:29] Speaker B: It's really hard to change because on an international basis, other countries would have to change as well. You have to be pretty uniform globally to make the patent system really work. [01:13:39] Speaker D: What about countries like China, which de facto seem to be operating by a different set of rules? [01:13:45] Speaker B: Yeah, it's really hard to enforce anything in China. It's really super hard. I mean, you can. [01:13:50] Speaker D: But Chinese companies are still innovating, it seems like. [01:13:54] Speaker B: Sure, yeah, they are. Of course, theft is legendary in China. My company never had that problem with Chinese businesses, but it is supposed to happen quite a lot. [01:14:10] Speaker C: Did you license to communist China? [01:14:12] Speaker B: No. [01:14:13] Speaker C: Oh, okay. [01:14:13] Speaker B: No, we never did. Did. Korean and Korean. Yeah. [01:14:18] Speaker C: So Pacific Rim. [01:14:20] Speaker B: Pacific Rim. [01:14:20] Speaker C: Okay. [01:14:22] Speaker B: Mostly they were American companies and some European companies. [01:14:25] Speaker C: Okay, great. Additional questions, Bradley? [01:14:28] Speaker A: No, thank you. [01:14:29] Speaker C: Yeah, we've been talking to Hal Philip, maybe one of the greatest inventors of the 20th century. He's given us things such as the automatic door opener, the automatic faucet detector, and the technology that we use daily, which has included the touch screen that we all use. Really remarkable stuff. And we appreciate your time and your effort. And I've been joined by Bradley Norris, who's the director of technical entrepreneurship at the Baylor Business School. And I think it's been a very fruitful time. And thanks for sharing your venture. I mean, it's just extraordinary. When are we going to see the movie? I think. Don't you think his story would make a great movie? I really. [01:15:09] Speaker D: Who's going to play him in the movie? [01:15:11] Speaker C: Well, now, I knew I've known Hal for a long time, so I want to be played by Ryan Gosling. So you need to arrange that. Who do you want to be played by? [01:15:23] Speaker B: I'm not interested. Sorry. [01:15:27] Speaker C: Okay. Well, thank you very much. And so, until we meet again, be of good cheer. [01:15:41] Speaker B: This has been Mind Matters News with. [01:15:44] Speaker C: Your host, Robert J. [01:15:46] Speaker B: Marks. Explore more@mindmatters AI. That's mind. Mindmatters AI. Mind Matters News is directed and edited by Austin Egbert. The opinions expressed on this program are solely those of the speakers. Mind Matters News is produced and copyrighted by the Walter Bradley center for Natural and Artificial Intelligence at Discovery Institute SA.