IBM working on statement on controversial variable rate toll patent

IBM is working to get agreement internally on a formal statement on a controversial "Variable rate toll system" patent that the company gained from the US Patent Office January 22. An official says that getting the patent was not part of any corporate strategy to "corner the market" on road pricing as others are alleging. The IBM Public Sector division based in Fairfax Virginia which works on toll and pricing proposals didn't even know about the variable toll patent until the news broke, we were told earlier.

IBM has a corporate policy of encouraging its people to "develop new ideas" and to file patents for them, regardless of where they do their day work.

"These guys might write code on large applications, or work on design of a new chip in their main job. They are inventors on the side. They are encouraged to develop ideas like this. They file a lot of patents that aren't part of any corporate strategy," the official said.

Trouble is all kinds of project managers for variable pricing projects around America are worried their plans may get them into legal battles with IBM because of the sweeping claims made in Patent 7,320,430.

Big Blue, they worry, could throw substantial legal resources at any fight over the patent. So the patent is already disrupting progress in road pricing.

At least one state DOT has put a variable pricing project on hold pending an OK from their lawyers that variable pricing won't incur an IBM lawsuit over Patent 7,320,430.

The IBM official we spoke to informally says this is not the company's intention and he encourages anyone concerned to contact IBM to discuss the patent and their project.

The IBM patent

The patent is of a "Variable rate toll system" patent number 7,320,430 issued Jan 22, 2008. It is described in the abstract as:

"A method and system are provided in which average vehicle speeds of tolled and non-tolled road segments between two locations are monitored and saved for reference in providing dynamic adjustment of the toll amount to be charged for use of the tolled segment in order to insure an efficient use of the tolled segment and a determination of an appropriate toll amount to be charged drivers in the tolled segment in view of real time traffic conditions of the tolled and the non-tolled segment. The toll adjustments are determined based upon the difference between actual average speeds of the tolled segment and actual average speeds of the non-tolled segment such that the toll adjustments are dynamic and depend upon real time traffic conditions in both the tolled and non-tolled segments of the travel route."

The "inventors" are named as Christopher James Dawson of Arlington VA and three other IBM employees and the patent is assigned to IBM.

The full patent can be read here:

http://tinyurl.com/ywb78o

Johnny-come-lately patent

COMMENT: IBM needs to explain itself on this sweeping patent. The description of the system in the Abstract at least doesn't seem to us any different from dynamic pricing as implemented on I-15's twin reversible express lanes north of San Diego almost exactly ten years ago - to be precise at 5:45am March 30 1998 - and operated successfully ever since by the San Diego Association of Governments using algorithms developed and tweaked by Wilbur Smith Associates.

We reported in April 1998:

"The world’s first dynamic road pricing operation began for rush-hour commuters in the central two reversible lanes of 10-lane I-15 heading south into San Diego California, 5:45am Monday morning March 30. This was an historic event because it is the first realtime, real world application of a long-established idea for applying flexible market pricing principles to highways’ greatest operational deficiency — that in the absense of flexible pricing urban highways are chronically overcrowded in rush hours and become unpredictable and inefficient carriers.

"Absent variable charges to meter the inflow of vehicles beyond a certain usage level they progressively choke up, the addition of extra vehicles not only slowing all, but eventually diminishing total throughput according to a famous backward sloping curve.

"The late William Vickrey, Nobel Prize winner in economics at Columbia Univ was writing and speaking about the potential of dynamic road pricing from 1959, and it became mainstream economic wisdom. A Transp Research Board panel led by Martin Wachs UCLA studied the idea in 1994 and endorsed it saying it has “great promise” in relieving congestion, improving efficiency of transp, and would provide major “net benefits” to society.

"Since the late 1980s computer chip technology and advances in dedicated short range radio communications have provided the technical means to implement cost-effective highway-speed pricing of scarce roadspace. The San Diego area, with the support of the Federal Highway Admin, was the first political constituency to translate this powerful idea and the wondrous technology into a working system on real highway lanes with ordinary motorists... (Toll Roads Newsletter #26, April 1998, p1)

Full report here http://www.tollroadsnews.com/node/1990

Since then dynamic pricing has also been operated successfully on MN/I-394 west of Minneapolis, and is planned for use in a bunch of other projects. How can IBM claim a patent on something others have invented and implemented a decade ago and operate today? All without any IBM involvement at all - except perhaps in supplying one or two regular desktop PCs for processing through a Circuit City retail store.

Wilbur Smith, Cambridge Systematics, Cofiroute, TransCore and several other firms were implementing variable toll rates along the lines of the Abstract description of the 2008 IBM patent before anyone from IBM even came to value pricing conferences, let alone started bidding for projects.

It's as if Thomas Edison who developed the filament-in-a-vacuum light bulb back in 1879 had the big Union Gas Light Company of the City of New York filing a theoretical patent for the light bulb in 1893 a decade after Edison and George Westinghouse had strung wire from poles and when electric light bulbs were already displacing gas light on Broadway.

In an interview with Thomas Friedman in the New York Times, IBM's global leader for road charging Jamie Houghton was quoted: "Congestion pricing of traffic is emerging as a completely new services market for IBM." (2007-07-15)

It may be a new market for IBM, but it's not new for America or for a bunch of companies who pioneered its implementation from the mid-1990s. IBM was conspicuously absent then.

This sweepingly worded patent makes IBM look like a big mouth, bullying Johnny-Come-Lately.

 TOLLROADSnews 2008-04-04