John Tothill, partner, Dehns

Patent wars promote innovation

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  • With regards to software, many patent disputes arise due to legacy players suing under dated patents. Firms like Yahoo and Netscape hold patents on technology that may have been non-obvious at one point in history but will be basic in today’s technological surrounding. Often such patents become the basis upon which a myriad of different products and services may be based upon. However, any start-up wishing to use this now basic technology has to do so either by tip-toeing through a patent minefield or by paying up-front licensing costs. This can often hinder the innovation before it has even got off the ground and preclude said start-ups from the market. Failure to obtain these rights can lead to these companies, often with a residual modern day market presence, using their (in relative terms) ancient patents in an effort to “extort” these companies.

    Additionally, you comment that the patent “arms race” is a clear indication that patents are crucial for innovation. The current bulk buying and hoarding of patents is not due to a want to innovate but through a protectionist fear of dispute. This is merely a sign of today’s litigious intellectual property landscape. If we take for example the constant disputes between mobile phone manufacturers like Apple, Motorola and HTC I fail to see how stopping your competitors from selling their products in a certain locality on the strength of one or two patents on an underlying aspect of said product can be good for the growth of the industry. True innovation would be incentivised through competitiveness in an open market place. Basic economics states that if you create a superior product; you market your product better; you tap into a niche; you create a strong fanbase (etc) and you succeed in business in comparison to your competitors. A government granted monopoly merely serves to retract from these needs. I would be interested to see where the current state of the art would lie had all the money spent on litigation over the last decade or so been spent on research and development.

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