Against Monopoly

defending the right to innovate

Patents (General)

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Bad news from the smartphone front

The New York Times has been doing better on patents and copyrights recently, exemplified today with a story entitled A Bull Market in Tech Patents link here .

The article includes this drawing of a smart phone and the number of patents - 250,000 according to Google--that affect each of the subsystems:

That is quite an invitation to lawsuits and lawyers looking for fat fees.

But the Gee-Whiz aspect of these numbers is overshadowed by the costs in innovation in an industry hypnotized by who has the latest gizmo. As the article goes on to note, "This patent gold rush has a darker side. It is diverting money for innovation from industries crucial to the economic future of the United States, analysts say. Patents were created as an incentive for innovation, giving inventors a temporary right to commercialize their ideas, without others copying them. While the recent blockbuster patent deals may make sense for the companies, analysts say, they are fed largely by legal considerations asserting patent claims or defending against claims rather than economic ones."

That leaves us with an industry dominated a handful of giants and a mob of minnows on which the giants feed. The consumer pays for all this in high prices and a lack of real competition or innovation.

Isn't the world of monopoly grand!


According to the Washington Post, Obama in his September speech will touch on discussing the patent issue. I don't think it will be "positive" from the perspective of Against Monopoly.

Washington Post, August 10, 2011 "Obama pivots to job creation with few tools to spur growth"

"The administration is also looking at a familiar set of plans: renewal of a two-percentage-point cut in the employee- paid portion of the payroll tax and extended unemployment benefits, which are both scheduled to expire on Dec. 31; establishment of an infrastructure bank to fund public works spending; ratification of free-trade deals; and overhauling patent law." (emphasis added)

I suspect the word "overhauling" will be meaningless.


The Post wrote this editorial (http://www.washingtonpost.com/opinions/how-to-encourage-american-innovation/2011/08/05/gIQApACjFJ_story.html) defending the currently pending patent reform bill which does little to change the system. That prompted me to write the following letter to the editor that was not used--the paper ran another nearer to its view.

"Both you and Obama are wrong in supporting the patent law changes now under consideration in Congress ("Yes, Patent Reform," editorial, August 15). They ignore the real problem with patents which create government mandated monopolies that are supposedly for a limited time, but in practice become permanent. Which companies dominate computer software--new firms or the old like Microsoft and Apple? The latter suppress innovation by staking out broad claims to the scope of their patents, preventing new entrants with real innovations, aided and abetted by the Patent Office which has a vested interested in taking care of its supporters. The rise of "patent trolls" (firms that make money by using its patents to sue potential competitors but make nothing themselves) possess questionable patents but new firms with legitimate innovations end up paying off because they don't have the finances to fight for long. Readers interested in more details should go online to blogs such as Slashdot, Techdirt, and Against Monopoly for details on the many current developments. The evidence is overwhelming.

I looked at the post above and gazed in wonderment that 250,000 patents could be relevant to smart phone technology. That is pretty incredible given that only about 2.5 million or so patents are in force in the United States. If these are all U.S. patents, then 1/10 of all U.S. patents are for cell phones. That seems just a little, unusual, given that people on this web site have stated how pervasive patents are in all the different technologies.

Going back to the original article through the link, the article does not state that 250,000 PATENTS are relevant to smart phone technology. What Google said is the 250,000 CLAIMS COULD be relevant to smart phone technology. The number of claims in electronic-related patents tends to be fairly high, so a rough guesstimate of the actual number of patents would be in the range 8,000 to 10,000.

As much as people like to think that smart phone technology is one of the most important technologies in the world, pointing at 250,000 related patents is beyond exaggeration, it is inaccurate.

Digging through the data stream, it turns out that the 250,000 number did not come from Google, or John Drummond, at all. That number was generated by patent troll RPX. That number is now getting repeated over and over and is on the verge of becoming fact rather than some bullshit number thrown out by someone with a vested interest in puffing up the value and importance of patents that might have some vague value with respect to smart phone patents, most likely so they can enhance their bottom line. When Against Monopoly repeats this unsupported number, all they are doing is further HELPING patent trolls in creating an artificial demand for marginal or valueless patents.
Washington Post Article today (8/22/2011).

Smartphone patent wars heat up: Microsoft v. Motorola http://www.washingtonpost.com/blogs/post-tech/post/smartphone-patent-wars-heat-up-microsoft-v-motorola/2011/08/21/gIQA29I7VJ_blog.html?hpid=z5

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