Sparkfun CEO Explains IP Obesity: Companies Who Rely Too Much On IP Flop

from the a-primer dept

A few folks sent over a great blog post by Sparkfun CEO Nathan Seidle about a recent TEDx presentation he did on the topic of "IP Obesity," in which he argues that companies that focus on patents tend to get fat and lazy while others out-innovate them. He provides the following example, showing this chart:

Here's an interesting example. Kodak is an amazing company that has been in operation for over 130 years. In 1978 Kodak filed for a patent for an electronic still camera, the precursor to the digital photography industry. They had a 25 year head start on the industry. What did Kodak do? They licensed their patent and filed suit against other companies that possibly infringed upon it. A graph showing the stock value changes of two companies over the past 25 years. I'll let you guess who is Canon and who is Kodak. What happened? Kodak relied too much on their patents. They rested on their laurels and become intellectually unfit. They were afflicted by IP Obesity.

Of course, that's just a single example, but we've noticed it in other cases as well. When we see bigger companies getting more aggressive with patents, it almost always seems to signal a decline in prospects for the company -- because they've become fat and happy resting on their laurels and government-granted monopoly privileges, rather than continuing to innovate in the market place. It's the exact opposite of what we're told patents are for.

You should check out the rest of the post, but Seidle goes on to talk about how ideas get copied all the time, and why that shouldn't concern you. He explains why it makes much more sense to focus on just building your business -- and he's got Sparkfun to prove it. If you don't know (and you should) it's an open source hardware company that has done over $75 million in business since its inception and is apparently on pace to do $25 million alone this year. Seems like you really can build a pretty good business while still being pretty open and not worrying about others copying you.

Filed Under: ip obesity, open source hardware, patents
Companies: sparkfun