Are u in-sane or in litigation? And what is the difference?

When observing litigation cases during the last years, the word “insane” was probably one of the most appropriate words that came up to my mind. Sometimes it feels like the number of new lawsuits exceeds the number of new products. Now I just read that Samsung is claiming Stanley Kubrick’s ‘2001: A Space Odyssey’ movie to be prior art for Apples iPad. What’s goin’ on there? Is this supposed to be comedy or the final warning for our world to go crazy?

Since years experts are warning that our patent system fails to foster innovation and in many cases even stifles new ideas (Bessen/Meurer). Especially in Telecommunications and IT markets companies are trying to patent every single invention, acquire patent portfolios (e.g. Nortel portfolio) or even acquire the whole company (Google/Motorola case) to improve market positions. These strategies are called defensive patenting. Patents are only filed/acquired to block competitors or to built up a defense against competitors in lawsuits (e.g. defensive patent aggregation DPA). A wise football phrase supports this strategy: “Defense wins Championships”. This might be true for American Football, but do we really want our patent system to work like that? Isn’t it reasonable to question why Google bought Motorola for 60% upon market value? Motorola, a company that has failed to compete in the Smartphone market and where innovative years are long time ago. In comparison we have Google a company that usually only acquires highly innovative companies (e.g. Androin Inc.) or invest in highly innovative projects. But Motorola has a portfolio with over 17.000 patents and at last the penny’s dropped! But do these companies really have the choice to act differently? Even though Google might produce great software like Android, what is it good for if HTC pays Microsoft $5 per Android Phone? And suddenly all these patents appear, e.g. Apples patents concerning Androids operating system. These patents might concern all kinds of operating systems! These patents are old! And now there is Android, an operating system in the mobile market that is very good in implementing the multi touch technology. There we go another lawsuit. So is this what is going to happen in the next years. Companies are launching innovative solutions or products and instead of competing in the market, attorneys are hired to search for patent infringement!

What could be a solution? How can we stop this?

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About timpohlmann

Tim Pohlmann is a post-doctoral researcher in economics at Mines ParisTech and Berlin Institute of Technology. He specializes in the economic analysis of markets for technology. He earned his doctoral degree with the highest distinctions in August 2012 from the Berlin Institute of Technology with a dissertation on patenting and coordination in ICT standardization. Tim’s research covers the empirical analysis of the trade of patents, patent trolls, standardization consortia and patent pools. He has presented his work at a large number of international conferences. Tim has been actively involved in preparing studies for the European Commission and the German Federal Government on the role of patents in technological standardization and business models in Open Source Software. Doctoral Thesis SSRN author page
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