A Bloomberg report had identified a group of 18 of those patents that could be particularly helpful in countering Apple's many Android lawsuits. The circa-1994 patents are said to cover location services, antenna designs, email transmission, touchscreen motions, software-application management, and 3G wireless technologies.
Most people understand the origins and rationale of ordinary industrial patents. They give, say, a pharmaceutical company which has spent a fortune developing a new drug a window to profit from its investment before the rest of the world can make cheaper versions. But software patents, though legally similar, are very different in practice. Google's $12.5bn purchase of Motorola's mobile phone activities last week caused a stir in the business and technology worlds alike, because the reason for it was not to acquire Motorola's phones but its portfolio of up to 17,000 "software patents", which have become the gold dust of the digital age.
The costs of our broken patent system are often abstract, but this month Google put a price tag on the problem: $12.5 billion. That's what Google paid for Motorola's U.S. smartphone business and its 17,000 patents. This is $12.5 billion that one of America's most creative companies will not use to innovate, fund research or hire anyone beside patent lawyers.
In her recent article Do Patents Disclose Useful Information?, Lisa Larrimore Ouellette tackles this issue head-on, offering empirical support for the position that patents do convey useful information. Ouellette, herself a former nanotech scientist, provides the results of a survey conducted of nanotechnology researchers that suggests that, at least in that industry, researchers look to patents for their technical teachings, and that they believe that patents provide useful information that is not available elsewhere - with one notable exception, the problem of reproducibility. Based on these findings, Ouellete argues that we do not grant patents because of disclosure; rather, we require disclosure because we grant patents.
The Microsoft-Motorola case is one in the larger arena of software patents. Some have been settled, but many are still outstanding. Last month, HTC lost a preliminary ruling from an ITC judge. The phone maker was sued by Apple, which claimed 10 of their patents were infringed upon.
The Valley is loving the patent discussion right now. For every meme, it seems there is a matching “here’s-how-patents-relate-to-that” meme. Just because a thing is popular doesn’t make it right, and thankfully, most commentators on the patent issue seem to agree that it hurting innovation much more than it’s helping it. It hurts innovation in many ways, but it’s worth going back over at least some of them here.
The Cost of Patents to Innovation are now Tangible and Large
We’re seeing this measured almost daily. Scoble is working through the math for WebOS even today when he values the WebOS patents at circa $3 billion for 2000, or $1.5 million apiece. That doesn’t seem too far afield if we look at patents in a way similar to how VC’s have to look at their portfolios. In other words, many will be worthless, but a few will be quite valuable indeed and will more than make up for all the rest. We don’t have to spend very long looking at the billions raised by Nathan Myhrvold’s Intellectual Ventures to realize that many astute financial minds really do look at it that way. In recent years, it’s been a good bet that financial engineering to produce wealth was really inflating a bubble of one kind or another that would destroy a tremendous amount of wealth for the general public. Why would we be surprised to learn that patents are just another way to play the same Ponzi scheme?
Comments
Agent_Smith
2011-08-24 12:29:58
Dr. Roy Schestowitz
2011-08-24 12:47:30