CIO Jury: Patent spats can lead to big payouts. But what is the real impact on the tech buying choices of IT leaders?
Patent rows between major tech vendors are now commonplace, especially - but not exclusively - in the smartphone and tablet sectors as companies take legal action to protect their intellectual property.
These cases can result in multimillion dollar settlements for the victors, and corporate embarrassment and hefty costs for those found to have infringed. But while such cases keep lawyers busy and make headlines, it's harder to identify the impact of such cases on the actual tech buying decisions of CIOs.
When asked, "Do the patent disputes between large vendors affect your tech buying decisions?" TechRepublic's CIO Jury of IT decision makers were evenly split.
Afonso Caetano, CIO at J Macêdo, said judicial decisions involving such huge sums "may pose a risk to the continuity of products or even companies" and as such influence the decision of CIOs in "adopting new solutions or keeping existing ones".
Similarly, Mike Tonkiss, IT director at Neopost, said: "A potentially large settlement may affect the losing party's ability to invest in R&D or their willingness to do so in case they infringe again," while Mike Roberts, IT director The London Clinic, said: "We need to be sure that the technology we purchase has a reasonable life. These disputes can change technical specifications and software requirements and this will increase costs and risks."
Long-term decisions on standards
Dale Huhtala executive director, enterprise technology infrastructure services at Service Alberta, said he takes into consideration some of these lawsuits as it may change long-term decisions on standards, while Jerry Justice, IT director at SS&G Financial Services, said the outcome of such cases affects which companies CIOs want to put their support behind, and "possibly affects hardware accessibility".
Matthew Metcalfe, director of information systems at Northwest Exterminating, said patent litigation has a minor impact on what technology he purchases, but added: "Patent trolling, however, has a major impact on the industry, post purchase."
Michael Woodford, executive director of IT Technical Services USANA Health Sciences, raised the issue of who really pays for the multimillion dollar damages in these cases.
"These decisions are largely irrelevant as the appeals process can extend out several years and often ends up in some type of compromise that has little functional impact on businesses and end users. The most noticeable impact is usually pricing, which is adjusted to pass on the damages to the customer base, effectively penalising users for loyalty," he said.
Meanwhile Adam Gerrard, group CTO at The LateRooms Group, said patent spats are "largely irrelevant" from a buying perspective, but such issues do influence his strategy in terms of understanding consumer technology buying patterns.
"For example, the lack of iPhone adoption in China makes it less relevant to lead with an iPhone app and more import for us to focus on Android as a platform for that market. So if a patent infringement row had a market-changing impact on the primary device in that region, then we would adapt our strategy to reflect that shift," Gerrard said.
This week's CIO Jury
- Kelly Bodway, VP of IT, Universal Lighting Technologies
- Afonso Caetano, CIO, J Macêdo
- Dale Huhtala, executive director, enterprise technology infrastructure services, Service Alberta
- Adam Gerrard, group CTO, The LateRooms Group
- John Gracyalny, VP IT, SafeAmerica Credit Union
- Jerry Justice, IT director, SS&G Financial Services,
- Kevin Leypoldt, IS director, Structural Integrity Associates
- Matthew Metcalfe, director of information systems, Northwest Exterminating
- Mike Roberts, IT director, The London Clinic
- Richard Storey, head of IT, Guy's and St Thomas' NHS Foundation Trust
- Mike Tonkiss, IT director, Neopost
- Michael Woodford, executive director of IT technical services, USANA Health Sciences
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