IBM public relations must be singing this morning. They have pulled off “the big lie” at least for now. They have made it look like they are opening up the crown jewels, when what they are really doing is radically diminishing the rights of independent technologists.
Some leading lights of the blogosphere are doing IBM’s bidding, fanning support for its so-called “reform” efforts. For example Jason Woodrow has a comprehensive post that is the worst of the lot I have seen this afternoon. Jason calls his post, provocatively, “We don’t need no stinking patents..” With all due respect I believe he has been sucked in by corporate amerika.
IBM and other large businesses are trying to weaken the patent system because it stands in the way of their powerful business goals.
IBM and others like them employ thousands engineers/serfs, and tens of thousands of sales consultants. IBM and other large corporations continuously pirate and infringe on the ideas of the little guys like you and me. They are second-movers, fast-followers and integrators of technology first. Their money comes from integration–from professional services. IBM and other large firms are not the leading sources of ideas in the Web 2.0 world. Little guys are the lead source of ideas.
The question is “WHO don’t need no stinking patents? Small companies and inviduals? Or big companies like IBM?
IBM don’t need no stinking patents, because they want to be able to pirate and infringe at will. The depend on the ecosystem for innovation, and then they pack it up and sell it to clients.
IBM is out to destroy patent rights, so it can have “freedom of action” to sell whatever it wants. Read (again) what the IBM CEO said in the New York Times yesterday.
…said Samuel J. Palmisano,
I.B.M.’s chief executive. “If you need a dozen lawyers involved every
time you want to do something, it’s going to be a huge barrier. >We need
to make sure that intellectual property is not used as a barrier to [IBM] growth in the future.”
Large companies don’t need patents. Large companies have other competitive
advantages: big money, big marketing, big management, big client lock-in, big control over standards. In a world without patents, large companies prevail.
The US patent system is not broken, despite what IBM tells you
The patent system is designed to make a market for innovation. Patents give direct rights to innovators, which in turn makes it feasible for innovators to sell or license their ideas. Selling and licensing ideas in turn enables innovators to continue to innovate.
This virtuous cycle of temporary property rights being granted to innovators has served America very well. It was invented by the founding fathers of our country, and it has been effective for generations.
The US patent system is the best in the world, as evidenced by the state of innovation in the US economy
Taken as a whole, the US innovation ecosystem is the best in the world. The US is the most innovative nation
on the planet. Our patent system is at the center of our innovation. It enables investment in research and development by individuals, universities, and companies.
Our innovation rate is far above the Europeans, and they have the most “reformed” system. We have the most traditional patent system, and the best technical and economic results.
We also have the most open industry structures, the highest percentage of small businesses, the highest levels of venture activity. All of this, I believe, is because we have the most well-developed market for innovation. By contrast Europe is dominated by big companies that monopolize the output of local engineers and scientists by forcing them into empoyee status.
Patent litigation costs are tiny.
Intellectual property costs are NOT a problem for any company I know,
and I know lots of companies. Patent management and litigation is a
TINY part of the budget of technology firms–and industry-wide is less
than one percent of revenues.
Why then do large companies like IBM say that the system is broken?
The market for innovation is working well for society as a whole, but
it is increasingly expensive for big companies like IBM.
There are more
engineers and scientists working today than ever before in history, and
most of them are independent, work for universities or small companies, or are working in
alternative matrices in China or India. In most cases they do not live
in the United States. In almost no cases do they work for IBM or similar firms.
IBM and other large companies no longer do much core innovation. They have morphed into professional services firms, and innovation is an “input” they buy or license. Innovation is a “supply component.” Most new ideas in big companies come from buying smaller companies, licensing technologies, or–candidly–copying innovators.
The problem the big companies are facing is that innovators are gaining bargaining power and sophistication. Innovators are starting more companies. Innovators are asking more for their intellectual property. Innovators are commanding higher license fees. And innovators who have been infringed are finding ways to fund lawsuits and force the large companies to the table.
Not only are large companies more dependent on the community for innovation, they lag the community. In a world of millions of independent developers, scientists and
engineers, around the world, IBM will be out-innovated unless it can freely integrate ideas from
anywhere anytime.
Big companies are running scared, and IBM is the most fearful of all.
Big corporate amerika is
up against a disruptive threat: free engineers and scientists.
Talent has escaped “the matrix” and challenges the corporate
model.
As the companies become more threatened, a few of them, led by IBM, have decided that they want to destroy the market for innovation as it currently exists.
IBM coopts smart liberals who are niave about big business.
What better way than to coopt the “free culture” movement, and turn it into a “free for IBM culture” movement? With a few thousand dollars given to the right non-profit, you can buy the support of the likes of Larry Lessig and EFF. Give a grant to NYU, and you get yourself associated with patent reform. Release a few dozen patents to the open source movement, out of 32,000 you own and 45,000 you control, and you seem a hero. Contribute a few highly-scrubbed patents to the “peer to patent” projec–out of 3000 you expect to file just this year–and you become a beacon of patent quality.
What better way than to define those little guys as
“trolls” and set about weakening the rights of the little guys. IBM’s
“reform” is stealing individual rights, in the disguise of being “open.”
IBM’s sophisticated conspiracy is sucking in otherwise smart folks.
Ultimately IBM’s motives and plans will be revealed, and its unwitting
allies are going to look like fools.
[Charlie Wood just sent me a note to
say that Jason Woodrow is "an incredibly smart and talented guy." I
agree. So is Brad Feld, who cheers for the IBM move without providing critical analysis.
Any inflamitory language that may have slipped into this post is because I am passionate about this issue.
Friends, you are following lemming-like the most disingenious corporate exploitation of open values! Really and truly!
Charlie
suggests that patent reform is a David and Goliath situation. I
agree. We independent inventors and small companies are David. IBM
and Microsoft, HP, etc. are Goliath.
What
disappoints me is that some leading Davids are jumping up and down
cheering "Goliath gets it!" as if IBM has turned saintly on
innovation.
Believe me, IBM does get it. Just not the way you think.]
