CXO

The problem with patents

Patent trolls and now tech giants have clearly been exploiting the patent system to stifle competition. if our goal is to protect and encourage innovation, we must demand more from our governments and the companies from which we buy our products.

Some of the biggest and most consistent technology news of the past 18 months has not been a breakthrough mobile device, new operating system, or compelling enterprise technology; rather, it has been the constant patent battles among technology titans. Legal wrangling over the patent system is nothing new, with years past introducing us to the idea of "patent trolls"-organizations that amassed a collection of patents without actually inventing or using any of them, only to sue other companies that actually produced a product, claiming patent infringement. What is relatively new is the barrage of front-page stories of one tech giant suing another, the poster child for this effort being Apple.

Seemingly instants after a compelling device running Google's Android operating system appears on the market, Apple's lawyers have filed injunctions claiming patent infringement and attempted to block the device from being sold, sometimes successfully. Everyone from Oracle to Microsoft has also been in on the action, with some claiming that Microsoft's licensing deals with Google actually produce more revenue than Microsoft's own smartphone operating system.

Aside from the lawyers, everyone, from CIOs to consumers, seems to be on the losing end of this battle. Popular devices are literally pulled from shelves, and device features are modified or removed to comply with legal actions. Wide swaths of cash are burned in the legal wrangling, as is the time and focus of executives and engineers who presumably have better things to do, not to mention the various judicial systems that provide the venue to air each and every complaint. Smaller companies come at a particular disadvantage, with a new market entrant risking being caught in the crossfire of multi-million dollar legal campaigns that could cripple the company, even if it were found to be in the right.

Is the patent an idea that's passé?

One obvious solution to the problem is removing the notion of patents altogether, perhaps even as part of a larger movement to weaken intellectual property protections. In the extreme, some advocates of this notion happily steal music and software, justified with bromides about information "yearning to be free." An obvious problem with this concept is that innovation costs money to produce and, while imitation doesn't guarantee market success, true inventors deserve some form of compensation. This basic notion is what likely drove the notion of the patent and IP protections, but it's a notion that has been overly exploited by companies looking for anything from quick profits to settling a grudge.

Assuming the concept of the patent is still valid, what seems to be needed is a mechanism to protect inventors and also streamline innovation. I am personally a fan of the "less is more" approach, since all the government actions in the world did less to hamper Microsoft than Apple and Google producing more compelling products. One popular idea is a "loser pays" legal system, where an entity bringing a patent challenge to trial must foot the legal bills of the other party if the suit is found to be without merit.

Another interesting idea is that of forced licensing. Apple versus Samsung is one of the most prominent legal battles at the moment, and Apple has stated that it refuses to license allegedly infringing patents, hoping instead to force Samsung to abandon popular devices. Pioneering technologies like multi-touch certainly deserve to bring financial reward to the inventor, but using them to kill competitors' products, especially when they rapidly create a new industry standard, seems against the idea of promoting and protecting innovation. Allowing courts to determine an appropriate licensing fee, and forcing licensing when no other course of action is available, would require a properly equipped and knowledgeable legal system, but could speed innovation while compensating inventors.

While it's easy to blame lawyers for all evils in the world, patent trolls and now tech giants have clearly been exploiting the patent system to stifle competition. It's easy to see the temptation of quickly killing competitive products or wasting a smaller competitor's time and money in the legal system, but if our goal is to protect and encourage innovation, we as citizens must demand more from our governments and the companies from which we buy our products.

About

Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent ...

Editor's Picks