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January 18, 2006

Genesis of a Hack Job

Received an email from Andrew Brandt, writer for PC World. "I'm working on a news story about how the flood of technology patents is affecting computer users. We're looking to focus on examples of "bad" patents that adversely affect innovation, raise costs for consumers, or make basic tasks more difficult or complicated for the average computer user." Oh boy.

Andrew was requesting an interview, which was declined.

Propaganda pieces, such as what Andrew has planned, have their slant all set. To make the reporting appear at least somewhat balanced, they need a stooge from the other side. Of course the stooge may not be a stooge at all, knowing the subject matter quite well, being articulate & cogent; no matter - the hack job author gets to put in just what he wants, rendering the stooge as a cartoon foil to the contrary theme.

In reply to Andrew, a few points were made. As a general statement, “the flood of technology patents” has been going on in this country since 1790; that’s what patents are, about technology. As for computer users, without patents, many computer companies might not exist, having been stomped out of existence by larger competitors; think Microsoft and Stac, for example. Without patents, the computer industry would be even more monopolistic than it already is. Monopoly prices always exceed prices in a competitive marketplace. So, on the whole, patents have saved consumers money, and afforded them greater choice, by offering small innovators a chance to come to life and stay alive.

My further suggestion was his grazing on the Patent Hawk series on patent economics.

Back in 1985, John Scully, former Pepsi head, presently head of Apple Computer, hit upon the bright idea of raising prices for the Macintosh, defying the trend of lowering prices as components became cheaper due to economies of scale. At the time, Apple had that wonderfully unique graphical user interface (GUI) which wasn't available on the IBM PC. Apple jacked prices, to consumer outrage, Windows showed upon shortly thereafter, and the rest is history. Apple tried suing Microsoft for stealing its GUI, a GUI based on earlier work done at Xerox PARC, which Xerox didn't have the gumption to exploit. When the dust settled, Apple and Microsoft cross-licensed their patents, with Microsoft throwing a hundred million plus change Apple's way. The innovation race continued, and still continues.

Patents are a piece of a business dynamic. IBM, Fujitsu, and Hitachi for years fought in the "big iron" mainframe market; IBM had the upper hand, but all had patents, over which battles were pitched, but the race for innovation and business advantage went on, as did, once again, patenting, cross-licensing and money changing hands.

It's obvious in the biotechnology and drug businesses that patents pay for R&D that might otherwise not have been done; that's not as obvious in the computer arena, but it's still true, at least to some degree.

Patents are about protection, and come with a built-in irony: they grant the right to exclude, but only have a market value concomitant with their adoption.

Denial raises cost. Microsoft wouldn't have had a $500 million dollar judgment against them from the Eolas active web content patent case if they'd just taken a license. That's just one example of many. Microsoft could have bought Intertrust for what they ended upon paying a few years later just to license their patents. Patents weren't the problem; Microsoft being bull-headed was the problem.

IBM treats patents as a business aspect: licensing, taking licenses, giving away licenses as a publicity stunt, all a part of doing business. They don't screech for patent reform, they worry about making profits in a very competitive world. IBM knows that patents don't raise costs per se, they're just a factor in a much bigger mix.

There are a lot of unsung small companies only able to protect their market niche, a niche they carved through innovation, by having patents.

There are a lot of patents that should never have been granted. Some are silly, some are sophisticated technologies claimed, for which the patent owner was not the inventor, and so the patent is just plain invalid. It can cost a lot to fend off asserted bad patents, which is as much an indictment of the court regime as the patent regime. There are even more patents, valid patents, that pushed the marker in the technology area claimed; not far, but a meaningful step forward. There are a few humdinger patents that sing invention at the top of their lungs. The patent picture is too complex to paint in black-and-white, as demon spawn or seed of life.

Patents may bring a competitive edge, the fruit of an individual inventor's dream, a nightmare to an infringer. The glorious story of patent reality comes multi-colored, right or wrong, good or bad, case by case. Beware the broad brush.

Posted by Patent Hawk at January 18, 2006 3:50 PM | Patents In Business

Comments

I've seen a stream of bad and misinforming articles lately in journals like Fortune etc.
They all try to paint a small plaintiff in each and every high profile patent case as a troll and parasite.
Frankly, I am getting sick of it.
Apparently those big corporate crooks buy up not only DC politicians but also a "free" press.
Sad for America... Very sad.

Posted by: small guy at January 19, 2006 7:24 AM

I've seen a stream of bad and misinforming articles lately in blogs like PatentHawk etc. They all try to malign the mainstream press and popular sentiment regarding the brokeness of the patent system.
Frankly, I am getting sick of it.
Apparently those big corporate crooks buy up patent attorneys and their little helpers who write blogs -- well, actually, they don't have to buy them at all -- they have too much self-interest in preserving a broken system because of the increasing revenue it brings in.
Sad for America... Very sad.

Posted by: George T. Ellison at January 19, 2006 12:43 PM

Yep, George is right. The patent system got the brokeness. And them bad maligners, want to badmouth Fox News fair and balanced, expose those big corporate crooks buying up corrupt little bastards like that Patent Hawk, who only lives and breathes for filthy lucre. So sad.

Amen George; God bless you.

(Is there an echo in here?!)

Posted by: Patent Hawk at January 19, 2006 2:31 PM