The "bad news" is seen in the following text:
Recently, in talking about how the Netflix Prize helped demonstrate the value of openness and collaboration when it came to innovation, rather than hoarding and taking the "inventor-knows-best" attitude towards things, Mark Blafkin of the Association for Competitive Technology (a tech industry lobbying group who tends to be a patent system supporter) took exception to what we said about the value of openness and collaboration instead of focusing on patents, by noting that Dean Kamen has also put a lot of effort into collaboration and prizes to award innovation, but also is a strong believer in patents (and, actually, making them stronger).
In response, I pointed out that Kamen's thinking on patents may actually explain part of the reason why Segway has struggled so much over the years. In believing so strongly in patents, it shows someone who tends to believe invention is more important than ongoing innovation, even as there's a growing body of evidence to suggest the exact opposite is true. Invention is the original idea, but innovation is an ongoing process of taking a product and adjusting and adapting it to the market. (...)
Exactly. Again, this highlights the difference between invention (believing that you alone have come up with the perfect idea for a great product) and innovation (the ongoing iterative process of going back and forth with the market to test and understand what the market wants and how to make your product meet their needs). By focusing so much on the invention, Segway missed the real opportunity for innovation, and that's caused all sorts of problems for the company.
The counter-example to Masnick's thinking is, among others, Chester Carlson. Carlson had no money, but he did have an invention. For years, he tried to get companies, like IBM and Kodak, to back him. They didn't back him, telling him there was no market. His invention would not be an innovation. Later a small company named Haloid backed him, and once a product was produced the company took off and Xerox/xerography (arguably) became the single greatest innovation of the 20th century.
***Of the difference between invention and innovation-->
Part of the confusion in patent reform is caused by the failure of certain legal academics to treat "innovation" and "invention" as distinct concepts.
In December 2006, in an article titled ON PATENT QUALITY AND PATENT REFORM [88 JPTOS 1068 ], LBE noted
To intellectual property attorneys, the world of patents is about the disclosure of inventions. The patent system is designed to provide incentives to inventors to disclose publicly inventions which are useful, novel, and non-obvious, thereby enhancing the public storehouse of knowledge and hopefully accelerating the rate of improvements to our lives. The deal between the public and the inventor is the exchange of information in return for a right to exclude for a finite time.
Businessmen are more concerned with innovation than with invention. Peter F. Drucker noted: Its [innovation's] criterion is not science or technology, but a change in the economic or social environment, a change in the behavior of people as consumers or producers. Innovation creates new wealth or new potential for action rather than mere knowledge. [FN4] In the book "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail," [FN5] Harvard professor Clayton M. Christensen does not once use the word patent. "Technology" as defined by Christensen means the processes by which an organization transforms labor, capital, materials, and information into products and services of greater value. Innovation is a change in technology. from the IPBiz post: Invention and innovation are not the same thing