Apple Patent Case Ping!
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Rich Karlgaard’s writing about the Apple’s lawsuit evokes sad memories for me. In 1979, Xerox Development Corporation (XDC), a wholly-owned Xerox subsidiary made an approximate $1.1 million investment in Apple as part of a venture capital round in the fledgling personal computer company. In the minds of XDC’s small entrepreneurial team (of which I was a part), this was the start of an exciting long-term relationship offering access to a major new business opportunity for Xerox, including potentially marketing Apple products worldwide via Xerox’ already extensive sales organization. On the basis of this envisioned relationship, Xerox Palo Alto Research facility (PARC) was opened up to Apple with the intent that Apple should use any available technology it wished in Apple’s products. Several years later, Xerox top management decided that Apple, “that small California start-up” was not going to succeed and was unlikely to ever produce a product worthy of being marketed by Xerox. Instead, Xerox management elected to fund an internal program to develop a personal computer (named the “Xerox 820”) worthy of the Xerox label. I was instructed to dispose of the Apple stock, now a public company, which I did by donating part to the Xerox Foundation and bleeding the rest into the market over several months. The result was a roughly 19-1 investment gain, but a huge missed opportunity for Xerox. Much of this happened before IBM had developed its initial PC. Today, the entire personal computer topology might be much different if Xerox had stuck with the initial commitment to Apple. As a well-known radio personality would say: “Now you know the rest of the story.”
As part of this investment agreement, which was for PRE-IPO common stock, Xerox allowed Steve Jobs and a team of design and software engineers two 8 hour visits to PARC and to USE anything they learned there... but they could not take notes, or take any software, or copy any hardware. They could use what they learned. This was a formal agreement for Xerox being allowed to buy the pre-IPO stock. i.e. Apple purchased the rights to what they saw and learned. Microsoft and Bill Gates were never there.
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The Xerox 820 was a VERY overpriced CPM box. All 8 bit, Z80.
It did provide the diskette format that I used in my MSX/CPM Z-80 Spectravideo SV-318, so that’s something.
You could make an encyclopedia of Xerox’s missed opportunities.
They didn’t see any market for the FAX machine, when they were given first crack at licensing the technology.
Business history is replete with stories like this, of corporate imaginations going bust OR just being squeezed when new opportunities would make a difference. Western Union had little interest in the new fangled telephone, GE, Philco and other consumer electronic companies totally lost out to Japan in the home entertainment (just as Japan is losing to Korea and Taiwan now). Kodak had the FIRST Digital Camera in 1975 and helped Apple with its First Digital “QuikTake” in 1994.
It is highly likely, that at some point in the future, people will point to Apple as doing the same thing. Very few non-niche companies can reset themselves over and over again and IBM is the only one that I can think of that is not a financial or legal conglomerate. This is also a strong argument against GOVERNMENT operating in business. Socialism and Fascism stifles business self-interest, stifles competition, stifles new business entry and leads to bureaucratized emulations of government, large and stolid.
Apple sucks and the notion that you can patent rectangles with rounded edges is patently ridiculous.
The “Beleaguered computer maker” Apple strikes again!
From the article:. . . Apple founder Steve Jobs and Macintosh computer designer Bill Atkinson drew heavily from the work of Xerox's Palo Alto Research Center. In the 1970s, PARC had developed a computer called Alto. The computer featured all kinds of new stuff, including a mouse and pop-up windows. Jobs visited PARC in 1979 and a light switched on. A day or two later, Jobs met with an industrial designer and ordered him to build a prototype computer with a mouse. Thus was born first the failed Lisa, and ultimately the very successful Apple Macintosh, which made its debut in 1984.I interject the Lisa into the discussion to make the point that turning the tour of PARC into a personal computer was not something just anyone could have done; even Steve Jobs had to get past a false start in order to get it right. If it had been that easy, Xerox itself coulda woulda shoulda done it.
Did Apple steal from Xerox PARC or not? In the broadest sense, yes. The visit to PARC did more than inspire Steve Jobs. It sent him directly on a mission to build something very much like the Alto.
Notice, dear reader, the similarity between the claim that Apple stole the Mac from Xerox and “you didn’t build that . . .” Yeah, the government might have built a road past the place where someone put up a building and started selling ice cream, or maybe preparing income tax returns or selling dry cleaning services or some other specific business (often even the road construction is privately done), but it took vision, to identify a particular business that would work in that particular location, and it took perseverance to actually make it happen.Yes, and maybe PARC invented the GUI/mouse combination, but it took vision, dedication, and skill - yes, and perseverance, too - to convert the idea into hardware and software you and I could buy and use. Yes, if you own a business your employees may have done most of the physical work which built and sustained it - but you paid them for that. Likewise, Apple paid Xerox - and it is only because of Xerox’s failure of vision that the payment isn’t reflected in maybe a billion dollars of asset on Xerox’s books today.
Everyone knows that "Thomas Edison invented the electric light." But that’s not the real story. Thomas Edison founded GE to make light bulbs, and founded Consolidated Edison to generate and distribute the electricity to power them. Just “inventing” the light bulb was not enough to merit the credit that Edison actually deserved, and got. Similarly, Xerox “invented the GUI and the mouse” - but Steve Jobs put Macs on store shelves where you could buy them. Each deserves their proper credit, but don’t tell Steve Jobs - don’t tell any businessman - “you didn't build that.” That’s just ignorance on parade.
In your FReepmail you estimate the present value of the stock XRX sold back in the day at $8 Billion. Guess what the market cap of XRX is today? Yahoo lists it at $9.62Billion. I guess you could say that XRX paid dearly for the $16 Million it sold AAPL for, back in the day . . .Apple purchased the rights to what they saw and learned. Microsoft and Bill Gates were never there.Incidently the math doesn’t quite work: you say XRX got only $16M for its AAPL, but the source you quote says XRX invested $1.1 M and got back 19 times that, which would have been more like $20.9 M.
. . . so Apple and or Xerox had a claim against Microsoft/Gates.In that telling maybe XRX had a claim against Microsoft - but not against AAPL.