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Patent Wars

August 21, 2010

Patents seem to be getting a fair amount of press of late.  The original idea of a patent was to give the innovator who develops the idea a monopoly of time in which she/he can benefit by commercial exploitation of the patent, protect by legal means from other wishing to copy the idea.  But long ago, this has become buried in legal, cultural, administrative and practical difficulties – and this is making waves.  We have been patents being used (as with copyright) as a means of proxy business-competition – with a recent Wired article exposing the battle lines of patent-warfare in the smart phone market as the big player jostle for position – so Apple sues HTC (used in many Android phones), Nokia sues Apple, Kodak sues Apple, Research in Motion (makers of the BlackBerry) & Samsung while Palm and Apple argue over patents:

What has for years been a who will-blink-first Mexican stand-off between the tech giants has turned into an all-out gunfight, albeit one conducted by the toughest corporate lawyers money can buy. “Everybody started suing each other a lot more — not only in telecoms, but in software and a number of other fields — starting in the mid- to late-90s,” says Jim Bessen, a law lecturer at Boston University. “The number of lawsuits filed in the US has tripled since the early-90s.” … The struggle that’s broken out between the tech giants has a certain irony; after all, the prizes they’re disputing — patents — were invented to accelerate and encourage invention, not hinder it. The concept is fairly straightforward: a patent is granted if an invention meets a number of requirements, the most essential being “novelty” and “usefulness”. Once granted, a patent typically gives the inventor a limited monopoly of a minimum of 20 years in which he alone can market the invention or license others to take up his protected work.

The intention is to promote the rapid adoption and adaptation of ideas, benefit the inventors and reward the whole process of research and development. However, over the past two decades, changes in the way patents are attributed and patent holders’ increasingly aggressive tactics have created a situation that some claim is choking, rather than promoting, innovation. What makes the problem intractable is that today it is impossible to design a high-end tech product that does not include others’ patents.

Every product is associated with what engineers refer to as a BOM, or bill of materials. The BOM includes the amount a company has to pay in cross-licensing deals for hardware and software before it even gets to manufacture. It can be the chipset, applications, Bluetooth or the use of MP3 file formats: a smartphone’s BOM can be between $150 and $200.

I think they key sentence here is: “The struggle that’s broken out between the tech giants has a certain irony; after all, the prizes they’re disputing — patents — were invented to accelerate and encourage invention, not hinder it.”

(This is an extract from a slightly larger version of the post over at the P2P Foundation Blog.)

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