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Patent Wars strangle Innovation

post Monday August 27, 2012


The US patent system was once created for the sole purpose of cultivating innovation. Nowadays however, it seems to be doing just the opposite. With an increasing number of lawsuits leading to increased expenses that otherwise could have been spent on R&D. Companies can sue each other for the smallest reasons which is greatly halting the innovation stream.

According to Mr. Arnoud Engelfriet, ICT and Patent specialist, the number of patent applications have increased exponentially during the Internet bubble and due to the abundance in demand and shortage of supply, patents were granted which should not have been granted, either due to previous existence or because they were unfounded.

One of the biggest disputes currently ongoing is that between Apple and Samsung, with about 20 lawsuits spanning over 10 different countries. Apple and Samsung are competitors, however Samsung also supplies parts for Appleā€™s products, further complicating their relationship.

The existence of patent trolls also exacerbates the innovation halt. These patents trolls are companies which have been set up for the sole purpose of buying existing patents of inventors, even patents for products which have not yet been produced, and make their money by suing companies that infringe on those patents. One such company is Intellectual Venture,s set up by Nathan Myhrvold back in 2010. It has collected some 30,000 patents to dat,e and around $2 billion worth of revenues. This has paved the way for other companies to set up similar business models.

All these patent wars are ultimately affecting the small innovative companies and entrepreneurs as they do not have the capital required to compete against these giants. Despite the recognition of the hindering that these law suits cause, large companies hold on tightly to their portfolio of patents and it thus seems as these patent wars will not be coming to an end anytime soon.

Source: Volkskrant
Image: Ambro

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Comments on 'Patent Wars strangle Innovation' (1)

AU Patent Attorney

I disagree. If you don't have an innovation, you're not engaging in innovative activity. So many so-called "innovators" go ahead blindly, thinking that they are entrepreneurs. Sadly, unless they have carried out a full due diligence (read patent searching and research) they cannot assume to be innovators.
Contrary to popular opinion, "patent wars" weed out the non-innovators, like, possibly, Samsung.
The message is: "don't assume you're innovating anything until you've done a full patent search!"
Patent trolls is a misnomer. If they invented something first, you cannot claim to be the inventor, simple as that. In fact, they are improving the system by building a field of prior art for innovators to consider before plunging ahead and wasting money.

Geplaatst door Barry Eagar op Wednesday 29 August 2012