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BOB METCALFE, PARTNER, POLARIS VENTURE PARTNERS | ON THE HOT SEAT

Ethernet pioneer: Patent system is flawed, but still the best we've got

(Mark Wilson/Globe Staff)

Over 30 years ago, as a researcher at Xerox Corp., Bob Metcalfe took the lead in inventing and patenting Ethernet, one of the crucial technologies of modern computer networking. He made a fortune by founding 3Com Corp. to market Ethernet technology, became a renowned Internet journalist and pundit, and this month was inducted into the National Inventors Hall of Fame. These days, Metcalfe, 61, doles out investment cash as a partner at Polaris Venture Partners in Waltham. He recently spoke with Globe reporter Hiawatha Bray.

Q Your name is on four of the original patents for Ethernet, a technology that lets you plug in a wire so your computer can talk to other computers. But did you actually invent Ethernet yourself, alone in a lab?

A No. I remember when 3Com was going public. I spent a day surrounded by 15 lawyers who were writing the prospectus. [They] spent a day with me to answer the following questions: Did I invent Ethernet? Was I the co-inventor of Ethernet? Was I the principal inventor of Ethernet? Was I in the same room when Ethernet was invented? Was I some sort of fraud pretending I'd invented Ethernet? We settled eventually for calling me, for purposes of SEC regulations, the principal inventor of Ethernet.

But that word, Ethernet, 34 years later, now applies to a lot of things I had nothing to do with inventing. And there's a lot of bitterness in the world. You should see my e-mails. As soon as word got out that I was getting yet another award for inventing Ethernet, there's a hundred people out there who think they invented Ethernet. And I'm happy to include them.

Q These days many people think the US patent system is broken and needs a major overhaul. Do you agree?

A There are various kinds of brokenness. They're granting a lot of patents on stuff which is not novel. So then you have these fights where you present prior art and you say: "Look, this is not novel. We were doing this 20 years ago. You can't patent that." That comes up a lot.

We pay attention to the intellectual property of companies we invest in, and sometimes we get involved in lawsuits over patents. Some of my companies have sued companies, or been sued. 3Com was constantly attacked by people who claimed to have invented what we were doing. It generally paid to ignore those claims.

Q How would you repair the patent system?

A I don't think the defects will ever all be fixed. It's like the Constitution of the United States. It's an approximation of something that works. Despite my whining, I think it's good that we have a patent system.

I can see the patent system working here. Our job is to allocate capital to promising technologies. So someone shows up and says, "I'd like to build a company that does X," and we say, "What protections do you have from competition? The day after we put our money in your company, are you not going to be put out of business by somebody else?"

There's lots of different answers to that question, but a recurring one is, "We have patent protection."

It's the whole idea of private property. When you grant private property, you create an incentive to invest and protect and make the best use of that property. A patent, which is a form of private property, is itself a form of technology for encouraging innovation.

Q Are you seeing lots of new inventions you can invest in?

A Definitely. We're overrun with it. There is a limiting factor that prevents us from putting more money to work than we would otherwise, and that's a shortage of CEOs, of entrepreneurial teams. The ideas and technologies, they're a dime a dozen.

We would be able to back more teams if there were CEOs -- entrepreneurial CEOs. That's the principal advantage Silicon Valley has over the Boston area. There are just a lot of people who are qualified to be the CEO of a start-up either because they've been one before or they were at the right hand of somebody who'd been one before. We have much less of that here.

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