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Tech ‘patent wars’ are bad for consumers

Patent on crossword

In recent times the likes of Google, Apple, Microsoft, HTC, Samsung and many more have locked horns in increasingly bitter patent disputes. Does this matter for consumers and what could the long-term implications be?

Even a hardened tech fanatic like me can’t help but groan at patent disputes. Patents are effectively a means of claiming ownership of a particular feature or way of doing something.

And most of the time companies will simply license the use of their patents to others. For example, both Apple and Google license Microsoft’s system for syncing email and contacts on a mobile. Money doesn’t always trade hands – sometimes companies trade the use of each others’ patents.

Sometimes, however, things get ugly. High-profile patent disputes used to be the domain of so-called ‘patent trolls’ – small companies that existed purely to patent ideas and sue those they believed infringed them for a profit. In the past, larger “legitimate” companies normally negotiated with each other and only occasionally came into conflict.

Now, though, the industry’s biggest companies are at each other’s throats, disputing patents left, right and centre. And they’re taking their disagreements public.

At the centre of it all is Google’s “free” Android operating system, which Google now claims is being victimised. Is this true and what does it mean for the man of the street?

Google: Apple and Microsoft are patent bullies

Google recently published a highly unusual attack on Apple, Microsoft and others for what it deemed anti-competitive activity. David Drummond, Google’s chief legal officer, said:

‘Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents… our competitors want to impose a “tax” for these dubious patents that makes Android devices more expensive for consumers.’

His complaints centre on bidding for a large patent portfolio. Apple, Microsoft, Oracle and others formed a consortium to bid for the patents, and outbid Google with a $4.5billion offer. Microsoft is now seeking license fees of $15 per Android device from Samsung, putting a price on what Google offers for free. Google feels this is unfair.

Not the whole story

If you believe Microsoft, however, Google isn’t being entirely honest. In fact, Microsoft claims it invited Google to join the patents consortium, but Google refused. A Microsoft employee went so far as to publish Google’s rejection email. The implication being that Google wanted the patents for itself, rather than sharing them with competitors. .

Further embarrassment has been heaped upon Google in its patent dispute with Oracle, however. Internal emails appear to reveal Google knew it was infringing on patents in Android and chose not to take a license.

This, and the revelation from Microsoft, has led many to accuse Google of wilfully infringing on patents. It’s Google’s fault, they say, and it’s paying the price of a risky non-conformist strategy.

What does it all mean for you and me?

Such disputes might keep the tech commentators busy, but for ordinary consumers, like you and me, it is a complete turn-off. Many of the problems are caused by the US patent system, which is widely regarded as flawed – but why should we care?

Google is correct in saying that these patent battles could lead to higher prices for consumers. Indeed, Microsoft already makes money from every Android phone HTC makes. It’s reasonable to believe this cost has been passed on to you and me.

However, even worse than higher prices, such disputes could have implications for smaller, innovative companies. If it’s so easy to patent ideas and concepts, even if you don’t use them, what are companies who are trying to make innovative products to do when they come up against such barriers?

Google is by no means the innocent party in this dispute, but its squabbles with rivals are symptomatic of a much larger problem; a problem that makes it increasingly difficult for new and emerging companies to succeed, resulting in less choice for consumers.

Comments
Guest
MetalSamurai says:
6 August 2011

After a little back and forth on twitter earlier I was going to write a short piece on why patents are harmful and actually prevent innovation, but ran out of time.

Instead here are sone links. Read them. Get the Consumers’ Association to campaign against patents, especially the pernicious software patents that many big companies are spending millions on lobbyists to buy the ears of MEPs.

http://www.techdirt.com/articles/20110724/22250715225/when-patents-attack-how-patents-are-destroying-innovation-silicon-valley.shtml

http://www.techdirt.com/articles/20110804/02572815385/planet-money-continues-to-show-how-damaging-software-patents-are-to-innovation.shtml 

For followup research, just google for each of these terms “patent thicket”, “Lodsys”,”Nathan Myhrvold”, “Intellectual Ventures”, “patent trolls”.

Guest
MetalSamurai says:
7 August 2011

And then this morning another meta-article on the subject, full of useful links

http://t.co/WwmcLj5

Guest
Glyn Moody says:
7 August 2011

Great to see “Which?” addressing this. Patents are supposed to be a fair bargain with society. In return for a government-backed monopoly, a company offers the public innovation that wouldn’t otherwise have seen the light of day. That might have worked in the 18th century, but as the smartphone market shows, doesn’t work today.

Most of the patents in question are obvious (that’s why everyone is infringing on them – they are just basic technology that everyone would naturally use), but are being employed by the company that managed to obtain that patent as a way to impose a tax on all the other players.

As well a stifling competition, that means that we, the public, are being forced to pay for something that was obvious. In other words, it didn’t need the monopoly incentive, and it is unfair that we must pay this tax anyway because of the broken patent system that grants such trivial and obvious patents.

Guest
Dennis D. McDonald says:
7 August 2011

And, make sure you listen to this episode of This American Life, “When Patents Attack”: http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

Guest
Mark Goodge says:
7 August 2011

Given that yesterday was the 20th anniversary of the web, it’s worth noting that we wouldn’t even be reading this if CERN and Tim Berners-Lee had taken a restrictive approach to intellectual property when they created it. It’s in the public interest to promote innovation by means of an open approach. http://mark.goodge.co.uk/2011/08/happy-birthday-worldwide-web/

Guest
Lawrence D’Oliveiro says:
7 August 2011

Patents were never about invention, they were about monopoly. The original “letters patent” were a grant of monopoly from the king for something basic but essential, like the manufacture of salt. With such a grant, you could make a fat profit, and anybody who tried to offer a cheaper alternative would have their operation broken up by the cops. And of course, in return for that grant, the king got his cut.

Later, when Parliament took the power of granting patents away from the king, instead of getting rid of it completely, they added “invention” as the excuse for granting these monopolies.

In short, patents are a hangover from a monopolistic, mercantilist era. They have no place in a Capitalist society.

Guest
PeteDA says:
7 August 2011

Patents stifle innovation, development and competition. Software patents doubly so.

Guest
Andrew Robinson says:
7 August 2011

The justification usually given for the existence of patents is to ‘protect the little guy’ – the lone genius who has a great idea and founds a company around it – from getting ripped off by big corporations. The problem is that our current patent system has grown into something that actually achieves the exact opposite. It stacks the odds strongly in favour of big corporations who can buy into the sort of patent exchange clubs described in the article. So many broad, vaguely worded patents are being granted that it’s impossible for the little guy to manufacture anything (great idea or not) without the threat of litigation for patent infringement, and patent litigation is such a long, expensive process that the best strategy is usually to give in and pay up, even if you are right.

I suggest readers go to the USPTO website, pick any patent at random, read it, then ask themselves these questions:

1. Do you understand exactly what’s covered by the patent?
2. Do you think it contains only genuine, clever, ideas that nobody else has ever had?

I’m willing to bet that the answers will be no, and no.

Now consider that there are literally millions upon millions of these patents, each effectively being a law that says “you cannot do this”, and answer one more question:

3. Would you feel safe from patent litigation if you started up a small business tomorrow?

I’m not against protecting the little guy, or against rewarding inventors, in fact I’m all in favour of these things that the patent system was designed to do, but the system we have in place at the moment doesn’t achieve those noble goals.