News of late has me feeling that patents may in fact be hindering innovation. The exact opposite of what they’re intended to do.
Patent wars, let’s call them, are abounds. Samsung knows all about them with their Galaxy Tab 10.1 having been not allowed in Europe and Australia for half a year (“Australia court extends Samsung Galaxy Tab sales ban“). And Google bought Motorola who hasn’t made a successful phone in years (“Google makes money on Iphone, Motorola patents“).
The titans of the tech world are spending billions trying to maximise their competitive positions (“Google increases war effort against Apple, buys 1000+ patents from IBM“,””Consortium led by Apple buys Nortel’s patents for $4.5 billion“). But why?
The simple answer is that it is smart for them to do so. Patents provide inventors lasting reward for innovation by limited others from profiting from their inventions for set periods of time. Generally, I imagine that this has been a very successful law in encouraging innovation and I don’t want to suggest otherwise.
Where it gets interesting however is when companies make acquisitions, what happens to the patents of the target company. Below is a good example of where acquiring a company’s patents might have been a reasonably good idea for Yahoo.
“Though Brin and Page had a good meeting with Yahoo founders Jerry Yang and David Filo, former Stanford students, Yahoo didn’t see the need to buy search engine technology.” [In The Plex: How Google Thinks, Works, and Shapes Our Lives by Steven Levy]
Good move Yahoo. Missed opportunities aside though, the scenario above seems pretty standard in my books. A big company could buy a smaller company with the hopes that it can use the smaller company’s technology to reach more people. It also probably has more money to throw at developing the technology if it chooses to.
Now, let’s think about this scenario where I think the lines are a little more blurred. Patents can cover the most minute of inventions that may also be incredibly useful parts of bigger technologies.
“While Jobs could not stop Google from developing the Dream version of Android, he apparently was successful, at least in the first version of the Google phone, in halting its implementation of some of the multitouch gestures that Apple had pioneered. Jobs believed that Apple’s patents gave it exclusive rights to certain on-screen gestures—the pinch and the swipe, for example. According to one insider, Jobs demanded that Google remove support of those gestures from Android phones. Google complied, even though those gestures, which allowed users to resize images, were tremendously useful for viewing web pages on handheld devices.” [In The Plex: How Google Thinks, Works, and Shapes Our Lives by Steven Levy]
So Jobs may have stopped the multitouch gestures being allowed into Android phones. Now fast forward a few years.
“The iPhone was still the royalty of smart phones. But as Android became the fastest-growing smart-phone operating system—by mid-2010, Google partners were selling 200,000 a day—Jobs increased the pressure. He sued the handset manufacturer HTC, alleging that its Android phones used techniques patented by Apple. Within days, Google rolled out a change in Android’s operating system: it would now support the pinch and stretch multitouch gestures that Jobs had demanded that Google remove. The capability had been hibernating inside the code base, and all Google had to do was switch it on in the next upgrade. Schmidt maintained that those developments were part of the normal course of competition. ” [In The Plex: How Google Thinks, Works, and Shapes Our Lives by Steven Levy]
What we see here is one company being limited from implementing technology created by another company. At least for some time. Regardless of whether Google’s intention is to make cash or don’t be evil, Google have not made some incredible innovations over the years that have significantly benefited billions of people. Stopping them implementing a small though useful technology here created by Apple stopped them from improving the Android technology for a period of time. This in turn affected tens of millions of people.
Apple and Google are both massive companies. Apple in fact had more cash on hand than the US Federal Reserve late last year. They’re not going hungry tonight. But, they’re obviously still protected by patent laws. I’m certainly not saying that they shouldn’t be but the example above shows that society can lose out in some cases due to reduced competition. Though, potentially just in the short term.
Taking it one step further than the example above, when companies specifically buy companies to acquire patents so they can block companies launching products, you really have to wonder if it is going too far. To be fair though, Google does seem to be very open with a range of their intellectual property.
Keeping this in perspective though, it is clearly a first world problem.