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March 31, 2009

Stifling

Start-up Platform Solutions "developed software that turned standard servers into systems that mimicked I.B.M.'s expensive mainframes." Feeling its profits threatened, IBM sued Platform for patent infringement. Squeezed, and investors spooked, Platform was so weakened that IBM snapped up Platform for $150 million, and then killed its product. That's how the big boys play. Read the full story in the New York Times.

Posted by Patent Hawk at March 31, 2009 8:06 PM | Patents In Business

Comments

This is why there needs to be even handed patent jurisprudence, so that companies like Platform Solutions have a chance. I am very interested to read the story.

Posted by: Just sayin' at March 31, 2009 11:09 PM

And yet patents are the "lifeblood" of startups according to so many. I never did understand how it could be the lifeblood since the big boys should presumably have everything that the small boys will be making patented in a broader sense than whatever little upgrades the small guys made.

Surely someone will explain this to me some day, but in the mean time I'll keep this article to show to those folks.

Posted by: 6000 at April 1, 2009 11:22 AM

"never did understand how it could be the lifeblood since the big boys should presumably have everything that the small boys will be making patented in a broader sense than whatever little upgrades the small guys made."

Think about how cross licensing might work - it makes perfect sense. (If the big guy wants to use the little guy's patented improvement, he has to license the base technology to the little guy in return, so both end up being able to market the little guy's device, or none do. And if the first big guy doesn't want to play, a second big guy might....)

Get some real world experience, 6K - that's an order!

Posted by: niRPa at April 1, 2009 11:56 AM

Well yes NIRPA but if the big boys feel like the small company could ever really threaten their bottom line then why would any of them play ball? I mean sure, I understand that there is a way forward, but what I don't understand is why the big boys would hardly EVER play ball. They have a nice market, and nobody is going to take it from them, why f around with the new features and allow competition? And, without them having to play ball, I don't see how the small start ups do it. But apparently this sort of thing does occur, I just don't see examples of it posted everywhere. And it also seems to me that it happens more rarely than startups would occur in the absence of patents period. Seems to me like the reason for so many small companies occuring in the US is the availability of funding period, not just the availability of capitalist funding that comes from capitalists who feel really safe thanks to a patent.

Posted by: 6000 at April 1, 2009 12:44 PM

"why would any of them play ball?"

Because most of the big boys have competitors and can't risk stifling innovation completely. (Microsoft excepted, of course.)

Yes, the big boys would rather not play ball. It's called the "not invented here" syndrome. But even the big boys play. Most high tech big boys always (have to) play ball with universities.... Patent Reform 2007 was directed as much against universities as anything else. To get the university perspective on patent reform, see here:

http://www.aau.edu/policy/patent_policy.aspx?id=7372

Unlike 30+ years ago, universities (working with small businesses) today do much or most of the cutting edge research in the U.S. - that's probably a product of Bayh-Dole or possibly the MBAs running the mega-corps.

http://en.wikipedia.org/wiki/Bayh-Dole_Act

Posted by: niRPa at April 1, 2009 2:14 PM

I don't see the problem here. Platform was ultimately bought out. If they had a better case, they could have chosen to stick to their guns. As it was, the shareholders thought selling the company to IBM and reaping a profit was a better idea.

Posted by: anon at April 1, 2009 10:04 PM

anon, you make a good point. This story is presumably an example of the system working as it should - and I don't have a problem with that. I still advocate even handed patent jurisprudence so that companies, simply by virtue of their large size, cannot appropriate technology with impunity. Similarly, I don't see why a small patentee simply because of its size shouldn't be able to hold off a larger company who is infringing.

Posted by: Just sayin' at April 2, 2009 12:43 AM