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Junior Varsity
Uli Behringer of The Music Group Q&A
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<blockquote data-quote="Uli Behringer" data-source="post: 51472" data-attributes="member: 1604"><p>Re: Uli Behringer of The Music Group Q&A</p><p></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Dear John,</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">Thank you for your open question and apologies for my late and lengthy reply. Since much of this topic goes way back, it took me a while to gather the facts. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">The issue of Intellectual Property is an important one to us; especially because we have been accused of not honoring the IP of other manufacturers. I have heard and read over the years many accounts of lawsuits, judgments and sanctions against our company that are frankly based in fiction and not fact.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">I welcome this opportunity to set the record straight not only on past cases but to also clarify our view on IP and what constitutes fair competition as well.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">About 20 years ago, as a small garage operation, we became involved in a patent dispute with Aphex over a processor we were building. At that time there were several companies who produced those exciters, such Akai, SPL, D&R, etc. Our patent attorney advised us that the Aphex patent was invalid and I also applied for my own patent (<u><a href="http://worldwide.espacenet.com/publicationDetails/biblio?DB=EPODOC&II=0&ND=3&adjacent=true&locale=en_EP&FT=D&date=19900816&CC=DE&NR=3904425A1&KC=A1" target="_blank">DE3904425</a></u>), with sponsorship from the acclaimed Fraunhofer Institute, the inventors of MP3. Despite assurances and our own beliefs, we ended up in court where the judge ruled in Aphex’s favor and we lost the case. We paid damages and moved on. </span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">This case illustrates very clearly what I came to understand over the ensuing 20 years about patents and IP. Disputes over intellectual property are commonplace in many industries and especially so in the technology industry. IP is a grey area, as it deals with patents, trade dress, copyrights, designs etc. where not much is black and white. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Just look at cases with Gibson versus PRS, Microsoft, Blackberry, Yahoo, Google, Samsung, Apple etc. Lawsuits are often used as “guerilla tactics” and especially common in the US where legal fees are sky high and each party has to pay its own fees regardless of the outcome of the case. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">This, along with the fact that IP litigation is often used as a tool to push a competitor out of business, are reasons why there are so many cases in this area of law.</span></span></p><p></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'"><strong>Misconceptions around IP</strong></span></span></p><p> <span style="font-size: 10px"><span style="font-family: 'verdana'"><strong></strong></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">One needs to be clear about the distinction between blatantly copying someone else’s product and the principle of reverse engineering. Copying a product 1:1 is clearly illegal, however reverse engineering is something that takes place every day and is accepted as part of a product development process known as benchmarking. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Often one company will establish a new market opportunity for a unique product and others will follow with their versions of that pioneering product. Think iPhone followed by Samsung Galaxy. This is the principle of competition.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">The following <u><a href="http://people.ischool.berkeley.edu/~pam/papers/l&e%20reveng3.pdf" target="_blank">Article</a></u> from Berkeley Law School gives a great read and provides valuable background information. A quick excerpt demonstrates why public opinion often differs from the law. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">“Reverse engineering has a long history as an accepted practice. Lawyers and economists have endorsed reverse engineering as an appropriate way for firms to obtain information about another firm’s product, even if the intended result is to make a directly competing product that will draw away customers from the maker of the first product.”</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">One of the cases that endures in people’s memories is when we were sued by Mackie over alleged infringement of their alleged IP. After a series of very costly and bitter court cases which we all won, Mackie reached out to us for a settlement which did not involve any money.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">It was proven in court that we had not copied their schematics or PCB layouts, nor had we infringed on any patents as there were none. Nor had there ever been any legal cases brought by BBE, dbx or Drawmer as claimed by Mackie as part of their marketing campaign against us and later erroneously reported by Wikipedia.</span></span></p><p> <span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Many years later I had the honor of spending time over a couple of dinners with Greg Mackie, for whom I have tremendous respect, and we both agreed that this dispute was a complete waste of time and money.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">In our first two decades, most of our products were designed to follow market leaders with similar features and appearance, at a lower cost. This value proposition upset many of our competitors while at the same time earning us a huge fan base among customers.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">I fully understand that many of those competitors would be frustrated by our ability to deliver equivalent or better products at significantly lower prices and that is the source of much of the anger directed at us by them.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">There is an often referenced dispute with Roland over their claim on stomp boxes. A little-known fact in that case is that I had personally met the founder of Roland, the esteemed Mr. Kakehashi, and visited his house in Hamamatsu. I shared with him the plans to build low-cost stomp boxes and he even gave me advice on how to introduce them into the market. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">Once we had our designs ready, I asked the head of our Japan sales office to visit him, share the drawings and ask for his opinion. I was told that Mr. Kakehashi raised no objections and hence we proceeded.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">The Roland US office however had a different view and filed a suit over trade dress, but not over patents which is often claimed. The slight change of the overall appearance resolved the dispute, however we regret this misunderstanding.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">In the 20 years since the Aphex case we have been sued several times by competitors. However, to be clear, we have not lost a single IP case in that time. We are committed to never engage in any activity that willfully infringes on the intellectual property rights of any company or individual. However, we are also aware that legal wrangling will continue as we press on with our philosophy of delivering the best products at the lowest possible cost. Some competitors will view lawsuits as a good marketing tactic and use it to discredit our company - we will simply have to live with this. </span></span></p><p></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"><strong>What is our future direction?</strong></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">When you look back to the first decade of our Company, we clearly focused on “me too” products, however adding features in line with our philosophy “double the features at half the price”. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">But at the same time we also released revolutionary products such as the digital equalizers DSP8000 and DEQ2496, the digital mixer DDX3216 and the DJ mixer DDM4000 etc. which are truly unique and sophisticated products.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">However several years ago, we decided to depart from low-tech products and instead strongly focus on value-added technology and IP creation.</span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'"></span></span></p><p> <span style="font-size: 10px"><span style="font-family: 'verdana'">With the acquisition of Midas and Klark Teknik, we acquired not only two historic brands but also a large team of the finest PHD’s, Scientists and engineers in the world. Who else knows how to design a digital mixing console with 30 Linux processors running in parallel? </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">We also have a world-class digital R&D team in Germany who has been designing hardware and software for the past 15 years. Since then, we added around 20 more engineers in the UK to support Midas and the Music Group and over 30 more are planned.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">Since the Midas acquisition we opened two research centers in the UK as well as in China where the focus is not product development but true technology research. We already achieved a technology breakthrough by successfully integrating a switch mode power supply with an amplifier to combine both into a single stage. A patent has been applied for and hence we can talk about it now. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">We are convinced that we will be able to design and produce power amplifiers at a staggering 94% overall efficiency all in line with the approach of saving energy and reducing carbon footprint.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">While we will always remain true to the principle of offering more for less, our product focus has shifted considerably over the past few years. Employing over 250 engineers worldwide, we now have the ability to design cutting-edge products that lead the industry, not merely follow. Our new Eurocom series garnered around 17 patent applications and resulted in the most energy-efficient line of products in the industry. </span></span></p><p><span style="font-size: 10px"><span style="font-family: 'verdana'">The new X32 Digital Mixer has already earned the praise of users and reviewers alike as it puts a $20,000 console in users’ hands for less than $3,000.</span></span></p><p><span style="font-size: 10px"></span></p><p><span style="font-size: 10px"></span><span style="font-size: 10px"><span style="font-family: 'verdana'">And this is truly exciting.</span></span></p></blockquote><p></p>
[QUOTE="Uli Behringer, post: 51472, member: 1604"] Re: Uli Behringer of The Music Group Q&A [SIZE=2][FONT=verdana]Dear John,[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]Thank you for your open question and apologies for my late and lengthy reply. Since much of this topic goes way back, it took me a while to gather the facts. The issue of Intellectual Property is an important one to us; especially because we have been accused of not honoring the IP of other manufacturers. I have heard and read over the years many accounts of lawsuits, judgments and sanctions against our company that are frankly based in fiction and not fact. I welcome this opportunity to set the record straight not only on past cases but to also clarify our view on IP and what constitutes fair competition as well.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]About 20 years ago, as a small garage operation, we became involved in a patent dispute with Aphex over a processor we were building. At that time there were several companies who produced those exciters, such Akai, SPL, D&R, etc. Our patent attorney advised us that the Aphex patent was invalid and I also applied for my own patent ([U][URL="http://worldwide.espacenet.com/publicationDetails/biblio?DB=EPODOC&II=0&ND=3&adjacent=true&locale=en_EP&FT=D&date=19900816&CC=DE&NR=3904425A1&KC=A1"]DE3904425[/URL][/U]), with sponsorship from the acclaimed Fraunhofer Institute, the inventors of MP3. Despite assurances and our own beliefs, we ended up in court where the judge ruled in Aphex’s favor and we lost the case. We paid damages and moved on. [/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]This case illustrates very clearly what I came to understand over the ensuing 20 years about patents and IP. Disputes over intellectual property are commonplace in many industries and especially so in the technology industry. IP is a grey area, as it deals with patents, trade dress, copyrights, designs etc. where not much is black and white. Just look at cases with Gibson versus PRS, Microsoft, Blackberry, Yahoo, Google, Samsung, Apple etc. Lawsuits are often used as “guerilla tactics” and especially common in the US where legal fees are sky high and each party has to pay its own fees regardless of the outcome of the case. This, along with the fact that IP litigation is often used as a tool to push a competitor out of business, are reasons why there are so many cases in this area of law.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana][B]Misconceptions around IP [/B][/FONT][/SIZE] [SIZE=2][FONT=verdana]One needs to be clear about the distinction between blatantly copying someone else’s product and the principle of reverse engineering. Copying a product 1:1 is clearly illegal, however reverse engineering is something that takes place every day and is accepted as part of a product development process known as benchmarking. Often one company will establish a new market opportunity for a unique product and others will follow with their versions of that pioneering product. Think iPhone followed by Samsung Galaxy. This is the principle of competition.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]The following [U][URL="http://people.ischool.berkeley.edu/~pam/papers/l&e%20reveng3.pdf"]Article[/URL][/U] from Berkeley Law School gives a great read and provides valuable background information. A quick excerpt demonstrates why public opinion often differs from the law. “Reverse engineering has a long history as an accepted practice. Lawyers and economists have endorsed reverse engineering as an appropriate way for firms to obtain information about another firm’s product, even if the intended result is to make a directly competing product that will draw away customers from the maker of the first product.”[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]One of the cases that endures in people’s memories is when we were sued by Mackie over alleged infringement of their alleged IP. After a series of very costly and bitter court cases which we all won, Mackie reached out to us for a settlement which did not involve any money. It was proven in court that we had not copied their schematics or PCB layouts, nor had we infringed on any patents as there were none. Nor had there ever been any legal cases brought by BBE, dbx or Drawmer as claimed by Mackie as part of their marketing campaign against us and later erroneously reported by Wikipedia. Many years later I had the honor of spending time over a couple of dinners with Greg Mackie, for whom I have tremendous respect, and we both agreed that this dispute was a complete waste of time and money.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]In our first two decades, most of our products were designed to follow market leaders with similar features and appearance, at a lower cost. This value proposition upset many of our competitors while at the same time earning us a huge fan base among customers. I fully understand that many of those competitors would be frustrated by our ability to deliver equivalent or better products at significantly lower prices and that is the source of much of the anger directed at us by them.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]There is an often referenced dispute with Roland over their claim on stomp boxes. A little-known fact in that case is that I had personally met the founder of Roland, the esteemed Mr. Kakehashi, and visited his house in Hamamatsu. I shared with him the plans to build low-cost stomp boxes and he even gave me advice on how to introduce them into the market. Once we had our designs ready, I asked the head of our Japan sales office to visit him, share the drawings and ask for his opinion. I was told that Mr. Kakehashi raised no objections and hence we proceeded. The Roland US office however had a different view and filed a suit over trade dress, but not over patents which is often claimed. The slight change of the overall appearance resolved the dispute, however we regret this misunderstanding.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]In the 20 years since the Aphex case we have been sued several times by competitors. However, to be clear, we have not lost a single IP case in that time. We are committed to never engage in any activity that willfully infringes on the intellectual property rights of any company or individual. However, we are also aware that legal wrangling will continue as we press on with our philosophy of delivering the best products at the lowest possible cost. Some competitors will view lawsuits as a good marketing tactic and use it to discredit our company - we will simply have to live with this. [/FONT][/SIZE] [SIZE=2] [B]What is our future direction?[/B] [/SIZE][SIZE=2][FONT=verdana]When you look back to the first decade of our Company, we clearly focused on “me too” products, however adding features in line with our philosophy “double the features at half the price”. But at the same time we also released revolutionary products such as the digital equalizers DSP8000 and DEQ2496, the digital mixer DDX3216 and the DJ mixer DDM4000 etc. which are truly unique and sophisticated products.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]However several years ago, we decided to depart from low-tech products and instead strongly focus on value-added technology and IP creation. With the acquisition of Midas and Klark Teknik, we acquired not only two historic brands but also a large team of the finest PHD’s, Scientists and engineers in the world. Who else knows how to design a digital mixing console with 30 Linux processors running in parallel? We also have a world-class digital R&D team in Germany who has been designing hardware and software for the past 15 years. Since then, we added around 20 more engineers in the UK to support Midas and the Music Group and over 30 more are planned.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]Since the Midas acquisition we opened two research centers in the UK as well as in China where the focus is not product development but true technology research. We already achieved a technology breakthrough by successfully integrating a switch mode power supply with an amplifier to combine both into a single stage. A patent has been applied for and hence we can talk about it now. We are convinced that we will be able to design and produce power amplifiers at a staggering 94% overall efficiency all in line with the approach of saving energy and reducing carbon footprint.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]While we will always remain true to the principle of offering more for less, our product focus has shifted considerably over the past few years. Employing over 250 engineers worldwide, we now have the ability to design cutting-edge products that lead the industry, not merely follow. Our new Eurocom series garnered around 17 patent applications and resulted in the most energy-efficient line of products in the industry. The new X32 Digital Mixer has already earned the praise of users and reviewers alike as it puts a $20,000 console in users’ hands for less than $3,000.[/FONT][/SIZE] [SIZE=2] [/SIZE][SIZE=2][FONT=verdana]And this is truly exciting.[/FONT][/SIZE] [/QUOTE]
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