“The Billion Dollar Code”: how a start-up lost a billion dollars?

The idea of ​​Google Earth existed almost a decade before its initial release in 2001 and was conceived not in one of Silicon Valley's big tech companies, but in the Berlin of the after the Cold War by an art student and a computer programmer. (Photo: 123RF)

Everyone is talking about Squid Game right now, in which participants can win a prize of 45.6 billion won, but there's another new Netflix series about the real story of how a start -up lost a billion dollars: The Billion Dollar Code.

The premise of The Billon Dollar Code is very real: imagine a technology that could allow you to travel to any corner of the world from the comfort of your home computer and see the streets, monuments, mountains and cities around the world. It looks a lot like Google Earth, doesn't it? Well, the idea of ​​Google Earth existed nearly a decade before its initial release in 2001 and was conceived not in one of Silicon Valley's big tech companies, but in post- cold war by an art student and a computer programmer.

The series is reminiscent of Aaron Sorkin's The Social Network, the 2010 film about the founding of Facebook. Like The Social Network, it tells the story of the founding of a small business — in this case ART+ COM — while describing the ensuing lawsuits. ART+COM sued Google in 2014 for intellectual property infringement. Like Facebook, ownership of the original idea is disputed, but ultimately David is unable to defeat Goliath (discloser alert) — Facebook and Zuckerberg are paying the Winklevoss twins, but not giving them credit for the idea, and a Delaware jury says Google did not infringe ART+COM's intellectual property despite overwhelming evidence.

Unfortunately, many of the mistakes made by The Billion Dollar Code startup are still being made by startups today. I suggest a few ways to avoid making the same mistakes and thus better protect your innovations.

(Please note that the article contains spoilers and the article is based on the series, which is a dramatization of real events.)

Mistake #1: Not realizing they had something worth stealing

The Billion Dollar Code startup is based on a group of hackers and of artists in Berlin in the early 1990s, which secured funding from Deutsche Telekom for the project, which was called "TerraVision" and offered people a way to walk the Earth. TerraVision was a program that allowed users to navigate to a particular area of ​​the planet and then "hover" closer to see the area in more detail. They developed techniques that made the "hover" process smooth, so that the change in resolution as the user got closer to a place of interest was smooth and not jerky. This was a difficult technical challenge, given the processing power and memory required as well as the limitations of computers at the time.

In the series, the band seems to view TerraVision as a cool art project with a bit of computer science behind it. They didn't seem to recognize that they really could have developed a new technology or something that could be commercialized.

Mistake #2: public disclosure

In the series, the startup and Deutsche Telekom unveiled TerraVision at an international technology conference. Although not explicitly mentioned in the series, it appears TerraVision's public disclosure was made before any patent applications for their technology were filed. In fact, in the actual case the series is based on, the technology had been leaked to various parties (including those involved in the development of Google Earth) before a patent application was filed.

In many jurisdictions, such public disclosure would prevent you from patenting your invention, as patents are only granted for inventions that are not already in the public domain.

Mistake #3: Trusting too easily

In the series, one of the startup founders enthusiastically tells another tech entrepreneur the details of the TerraVision algorithm. This is yet another disclosure of the invention. The founder is naive and thinks he is sharing his idea with another like-minded person who is not going to do anything wrong. Unfortunately, this turns out to be wrong. In the series, this entrepreneur will be part of the team that developed Google Earth. As a result, proprietary information relating to TerraVision had been given away for free to a company with far more resources.

Mistake #4: Trying to do legal stuff themselves

In the series, one of the founders seems to have written his own patent application and the start-up seems to have submitted its own patent applications. They also attend meetings with Google and respond to emails from Google regarding the potential purchase of their patent without hiring a lawyer.

In tech, Goliath usually wins against David.

As the series also shows, many large companies have offered to buy patents from start-ups, ultimately not buying the patents. The start-ups did not press charges, however, as the legal fees would have cost more than the takeover. In fact, the series mentions the cost of litigation which in the United States is extremely high, from 5 to 10 million dollars to defend a patent. The size of large technology companies therefore quickly positions them as advantages in litigation. Even if ART+COM's case is very solid, Google always wins in the end.