Google and Apple Spent More On Patents Than R&D Last Year 119
parallel_prankster writes "NYTimes has an interesting article about how patents are really stifling innovation in the tech industry. Today, almost every major technology company is involved in ongoing patent battles. Of course, the most significant player is Apple, industry executives say, because of its influence and the size of its claims: in August in California, the company won a $1 billion patent infringement judgment against Samsung. Former Apple employees say senior executives made a deliberate decision over the last decade, after Apple was a victim of patent attacks, to use patents as leverage against competitors to the iPhone, the company's biggest source of profits. At a technology conference this year, Apple's chief executive, Timothy D. Cook, said patent battles had not slowed innovation at the company, but acknowledged that some aspects of the battles had 'kind of gotten crazy.' It is a complaint heard throughout the industry. The increasing push to assert ownership of broad technologies has led to a destructive arms race, engineers say. Some point to so-called patent trolls, companies that exist solely to sue over patent violations. Others say big technology companies have also exploited the system's weaknesses. 'There are hundreds of ways to write the same computer program,' said James Bessen, a legal expert at Harvard. And so patent applications often try to encompass every potential aspect of a new technology. When such applications are approved, Mr. Bessen said, 'the borders are fuzzy, so it's really easy to accuse others of trespassing on your ideas.'"
The Source of This Headline? (Score:5, Interesting)
Google and Apple Spent More On Patents Than R&D Last Year
I was going to submit this story this morning but I didn't because I couldn't find the source of this Stanford analysis that is mentioned (though not cited) in the article. Could someone please give me a link to a news release or PDF or anything? I thought I had pretty good Google skills but found nothing. The thing that worries me is that this headline lead me to believe that all the court fees and lawsuits are costing more than R&D. However the article itself says:
In the smartphone industry alone, according to a Stanford University analysis, as much as $20 billion was spent on patent litigation and patent purchases in the last two years — an amount equal to eight Mars rover missions. Last year, for the first time, spending by Apple and Google on patent lawsuits and unusually big-dollar patent purchases exceeded spending on research and development of new products, according to public filings.
So my first concern is that this is also about patent purchases so this could also be including that "per phone or per license" cost that you pay when you actually do license someone's patent legally and use the system as it was intended to work. Does anyone know if they're including this or just acquisitions of smaller companies that have patent portfolios as defense/attack mechanisms? Secondly, I'm concerned that we're only seeing public filings and these sums cannot reflect undisclosed terms for settling out of court and/or licenses that are not publicized.
Again, before people explode over this headline, I'd just like to get my hands on the data and verify that there is indeed a reason to explode over this. This isn't an apology for patents, this is just the most basic journalistic caution before I fly off the handle.
Remove the profit incentive (Score:5, Interesting)
Right now, there's a huge profit incentive for patent trolls because of the huge payouts in damages when these lawsuits are won.
Either cap damages, or limit compensation to injunctions, to remove the huge incentive that companies have to make profit from patent battles.
Having these companies bickering over patents and billion-dollar payouts is bad for everyone, since they should be inventing new technology or at least fixing those iPhone purple flare cameras.
Because stupid people haven't realized (Score:2, Interesting)
history question. (Score:2, Interesting)
I recall that there were long and nasty patent disputes over rubber tires, motion picture film, airplanes, etc. Does anyone know how these old battles compare to today's situation?
Apple was schooled by Creative (Score:5, Interesting)
Remember Creative, the maker of Soundblaster cards? They were also one of the first makers of MP3 players. ("Less space than an Nomad, lame")
[in 2001] Creative applied for a broad software patent for a "portable music playback device" that bore minor similarities to the iPod, an Apple product that had gone on sale the same year. Once the patent was granted to Creative, it became a license to sue.
When Apple came out with its own MP3 player called the iPod, Creative sued... because it infringed on Creative's patent for a "portable device that plays MP3 files". Apple settled three months later for $100 million.
Afterwards, Steve jobs vowed never to get caught with his pants down again. When developing the new iPhone, he declared "we're going to patent it all". Basically, Creative took Apple to school on patents, and Apple learned real fast.
Re:history question. (Score:5, Interesting)
Patent disputes over motion picture films were a major influence on the development of Hollywood. From Wikipedia [wikipedia.org]:
So, at least for the movie industry, it was possible to avoid or minimize patent harassment by moving elsewhere. In today's world that's obviously impossible.
Apple doesn't do R&D to begin with. (Score:5, Interesting)
Apple only does development. As far as I can tell they have zero published research.
We need a patent system based on freedom (Score:3, Interesting)
The current patent system is harmful to society because it tramples on freedom. The purpose of patents is to provide an incentive for innovation and compensate inventors for their hard work. However, it should not infringe on the freedom of others. That would be counter to its purpose. Above all, the system must never serve as a carte blanche for a few to bully all others out of the market. What we need is something like this:
1. A special independent fund must be set aside to compensate inventors for their inventions and reward innovation.
2. A retroactive formula must be adopted to calculate the amount of the compensation.
3. The formula must be adjustable so as to establish the best return for society at large in terms of innovations.
4. Last but not least, whatever the formula chosen, it must never infringe on the right of the individual to copy and use any invention for whatever purpose.
Inventors should register and publish their findings as soon as they can because their compensation will depend on how much society like and use their ideas. Of course, we still need a Patent bureau and a system to manage claims and the proper registrations of inventions. The system should be as automated as possible.