IBM Patent Lawyer Says The Patent System Works Fine Because... Hey Look Over There!

from the what's-that-got-to-do-with-patents? dept

IBM's Chief Patent Counsel, Manny Schecter, has one of the most ridiculous defenses of the patent system you'll ever see over at Wired, entitled With All Due Respect: The Patent System's Not Broken. Having debated the patent system for years, I've noticed a pattern among patent system defenders who are big time patent lawyers. Their argument tends to amount to: see this wonderful thing? It exists because we have patents. Period. The fact that whatever it is they're pointing to probably has nothing to do with patents will never be acknowledged. Schecter's argument is a perfect example of this.

Why would a company spend billions of dollars to build a microprocessor-manufacturing plant employing thousands of skilled workers in the U.S., if it could only protect its technology by obtaining patents in other countries?

I love idiotic rhetorical speculative questions like this that assume it's impossible to answer in any way other than the one the questioner wants... especially when the actual evidence tells a completely different story. It turns out that we have examples of countries with weak or no patent systems -- and they did invest tons in manufacturing plants, employing thousands of skilled workers. As covered in Eric Schiff's research decades ago, both the Netherlands and Switzerland had extremely weak or non-existent patent systems at the time they industrialized -- and both built up industries that involved huge capital expenditure, without the ability to protect the patents at home. Similarly, research by David Levine and Michele Boldrin highlighted how the Italian pharmaceutical industry developed to be quite impressive at a time when pharmaceuticals could not be patented in that country.

The reason for this is not difficult to assess if you're not a patent lawyer. It's that companies don't sell "patents," they sell products. And you can sell products whether or not they're patented. If you build something people want, you can figure out a way to sell it -- even if someone copies you. In fact, what plenty of other research has shown is that (again, contrary to what many lawyers believe) copying market leaders is often a hell of a lot more difficult than people believe. And, of course, even if you have a direct copy, it doesn't mean you can really compete. The first mover advantage is important, but so is knowing how to market and sell products, and copiers often don't do a good job on that front. So, yes, there are plenty of reasons companies would spend a lot of money without patents. And we know that already because the evidence says so.

Why would a venture capital firm fund a social-networking service provider if the company could not obtain patents on its innovative software backbone, preventing others from easily copying it?

Uh, again, because they're not selling the patents, but the service. And plenty of smart VCs fund social networking companies without patents. Let's take a look at one of the most popular social networking sites out there today: Tumblr. The company has zero patents. Zero. And it raised money. From whom? From one of the most respected venture capitalists around: Fred Wilson, who has spoken out directly about how much harm patents do to innovation, and why it makes no sense to invest in a company because of their patents, as opposed to their actual product or service.

So we're now two for two on completely ignorant "rhetorical" questions from Schecter, showing that the true answers to his questions disprove his point. And that's just in the first paragraph. Let's jump forward a bit.

But here’s the thing: Patent disputes like this are a natural characteristic of a vigorously competitive industry.

And they’re nothing new: Similar skirmishes have historically occurred in areas as diverse as sewing machines, winged flight, agriculture, and telegraph technology. Each marked the emergence of incredible technological advances, and each generated similar outcries about the patent system.

So because we've made this mistake before, it's okay to make it again and again? What kind of logic is that? Seriously.

We are actually witnessing fewer patent suits per patent issued today than the historical average, according to economic historian Zorina Kahn. The rate of patent litigation was twice what it is today compared to some decades in the mid-19th century.

This is a completely moronic and meaningless measure. Why? Because the number of patents being granted today far, far, far exceeds the number granted in the past. The percentage of patents that are litigated over doesn't matter. We're talking about the impact of the lawsuits. The fact that the patent office grants a ridiculous number of patents today that never are used in litigation has no impact on that whatsoever. This is what's known as throwing out bullshit statistics when the actual data goes against you.

Economists also tell us that 75 percent of a company’s value is attributable to its intellectual property (IP) -- and that IP-intensive industries contribute $5 trillion per year to the U.S. economy. These industries account for about 35 percent of gross domestic product and 40 million jobs, including 28 percent of the jobs in the United States.

Where to start? First off, which economists? Second, having your value attributed to your "intellectual property" (loosely defined) is not the same thing as saying that it's because of intellectual property laws. This is a common and ridiculous mistake that many make -- assuming that because the things currently covered by IP laws are important, the laws themselves must be important. Ideas, content, innovation etc. all exist absent IP laws. This is something that patent lawyers seem to conveniently forget or ignore. Next, the $5 trillion number and the 40 million jobs claim -- well, that's equally bogus, as we've discussed before. It's based on the ridiculous and obviously faulty belief that these jobs and "contribution" to the economy are due to "IP laws" and not other economic activity such as people actually selling stuff. And those jobs? Yeah, anyone who claims that has lost all credibility, because, remember, it's actually mostly about trademark, and that means that 2.5 million of those jobs are actually people working at grocery stores. Sorry, dude, you don't get to claim the checkout bagger as a reason why we need stronger patent laws. But that's exactly what he does.

Six of the 10 companies globally with the highest software revenues are U.S. companies, including the top three. In other words: The success of the U.S. software industry correlates with its use of software patents to protect its innovations. If patent litigation caused by the U.S. patent system stifled innovation, U.S. software companies would not be the most successful in the world.

Well, let's start with the basic point that correlation does not equal causation. In fact, let's dig deeper and point out that in nearly every case, the patents came after the success. That is, these companies have used patents to restrict competition, not as a way to get big. Of course, Boldrin and Levine's research has shown that to be the case historically as well. Strong IP laws and enforcement tends to trail innovation, rather than the other way around. I don't know which "list" Schecter is using here, but we'll go with the software top 100 -- and it confirms that theory. Top of the list? Microsoft. The same Microsoft whose founder once said:

If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today.

Not exactly the ringing endorsement Schecter believes it is. Yes, lots of big companies have patents, but that's because they need to have patents these days or they get sued by others who have patents. Schecter knows this because he lives this daily (sometimes in helping IBM sue other companies for innovating). Need we remind Schecter of the famous story of IBM showing up at Sun with a patent lawsuit, and after being told that Sun didn't infringe on any of the patents, telling Sun:

"OK," he said, "maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?"

That's not innovation. That's extortion. And Schecter is defending it.

Ever since U.S. courts made it clear that copyright is unavailable to protect their ideas, developers have sought to protect inventions embodied in their software via patents. Denying patent protection for software will cause these developers to look for other ways to protect their IP investment — resulting in code that is less open, less accessible, and less interoperable.

Uh... copyright has never been about protecting "ideas," only expression, so I'm not sure what he's getting at here. Furthermore, part of the big problem with software patents today is how they're broadly claiming way too much. If I understand his argument here, it's that if we fix that, and stop them from using monopolies too broadly, they'll just try to lock up their software. Except we already know that fails in the marketplace in the long term. Over the long run, customers demand more open, accessible and interoperable solutions. Why do you think IBM bet so strongly on Linux backed up with a giant service business? Because it knew that there was money in providing services around open, accessible and interoperable systems. If a company is stupid enough to go in the other direction, it will fail in the marketplace. No problem there.

In the end, none of the arguments he makes even come close to making sense. At best, he argues some sort of bizarre correlation to make his point, but most of the time he's just pointing elsewhere and pretending it has something to do with patents. We could just as easily argue that patents have caused population growth in the US. I mean, look, the population has grown... and we have patents! And it would be just as meaningless as every single argument he makes.

Filed Under: manny schecter, patent system, patent trolls, patents
Companies: ibm

The Pending Kodak Patent Auction May Create Weapons Of Business Destruction

from the loose-nukes dept

At the moment, the patent system is seriously malfunctioning. The high volume of low quality, poorly defined patents, particularly in the software and IT industries, is catalyzing the explosion in patent litigation. And lately, the problem has been getting much worse. In fact, the amount of litigation involving software patents has tripled since 1999 and a software patent is more than twice as likely [PDF] to be involved in litigation as its non-software counterparts.

Our broken system affirmatively penalizes innovation. Empirical research has shown that the more money a company invests in R&D, the more likely it is to be punished with infringement litigation. This weakens our economy and harms our nation’s global competitiveness. Just ask America’s most prolific legal scholar, Judge Richard Posner. Furthermore, last year’s patent “reform” legislation, the America Invents Act (AIA), did little to solve the fundamental problems at the heart of the current explosion in litigation. As Richard Waters of Financial Times wrote last year, the AIA did little to fix the broken system:

Yet, while there was general agreement that an overhaul was badly needed, the law that was eventually passed did little to fix what is widely seen as the current system’s chief weakness: that it leads to the issuing of too many patents that lack real innovation and that clog up the legal system once their holders seek to enforce them against alleged infringers.

As a result, we have arrived at another inflection point as patents, and the problems surrounding them, are again in the headlines. Although the Samsung vs. Apple trial, and its fight over who owns the rights to a rectangle, is getting a majority of the recent headlines, another major patent battle is looming. This Monday opening bids were submitted ahead of an August 8 auction for some 1,100 patents belonging to the now bankrupt Eastman Kodak Corporation. Given the rampant patent litigation in the high-tech space, the thought of 1,100 more litigation weapons flooding the marketplace is troubling. The situation gets even more worrisome when one looks at the parties lining up to bid.

The Wall Street Journal reports that both Apple and Google are leading competing consortia in an effort acquire these patents, which largely pertain to digital photography – a key component in smartphones. The consequences of this will potentially open up another front in the smartphone patent wars. Although Google’s consortium appears defensive, as it is made up of its partners in the Android ecosystem, Samsung, LG and HTC, and defensive patent aggregation firm RPX (which pledges never to assert its patents offensively), Apple’s consortium is headlined by the notorious (and massive) patent assertion firm, Intellectual Ventures, and Microsoft.

The partnership between Apple, the main litigant in the global “thermonuclear war” against Android, and Intellectual Ventures, the king of the patent trolls, is particularly troubling for many reasons: two of which are explored here.

The Sketchy History of Recent Patent Auctions

As many observers of the patent world may remember, there have been two major recent patent auctions in the IT space, where failing companies’ patent portfolios have been put on the auction block. In the case of Novell, which was in the process of being acquired by Attachmate, 882 patents were sold to a consortium of bidders, including Apple, Microsoft, EMC and Oracle. In the case of Nortel, the former Canadian Telecom giant that fell on hard times and went bankrupt, its patent portfolio was eventually purchased by Rockstar Bidco, a consortium of companies that included Apple, Microsoft, Sony and EMC. In both cases competition concerns were raised, particularly from supporters and users of open-source software, that prior commitments made by patent holders and new commitments made by the purchasers, not to use patents against open-source software (or to abide by prior FRAND commitments) would be honored.

However, despite these concerns, the antitrust regulators world over – relying on pledges from the parties involved in the transaction – stated their belief that the prior commitments from Novell and Nortel regarding the use of their patents would be honored by the new owners.

As Michael Tiemann of the Open Source Initiative (OSI) commented on the Novell transaction:

When the OSI first learned of this proposed transaction, we were alarmed that four companies with dominant market positions and a mixed attitude towards open source software could redeploy what the open source community had considered to be a friendly asset–Novell’s patent portfolio–into a weapon against open source software. We are delighted that you have made clear that the [german antitrust regulator] cannot allow a transaction that would create or strengthen a dominant position on markets in which such investors are active, and we are happy to provide the additional information you have requested about the proposed restructuring of this transaction.

In the US, the DOJ approved both deals (plus Google’s Motorola acquisition) but said it would continue to monitor the wireless device space because it remained concerned as to whether or not prior pledges would be honored:

The division’s continued monitoring of how competitors are exercising their patent rights will ensure that competition and innovation are unfettered in this important industry.

All three of the transactions highlight the complex intersection of intellectual property rights and antitrust law and the need to determine the correct balance between the rightful exercise of patent rights and a patent holder’s incentive and ability to harm competition through the anticompetitive use of those rights.

However, soon thereafter, the President of the company behind the Apple and Microsoft backed bid – the Rockstar Consortium – publicly repudiated new commitments made by the companies that established it, saying: “We are separate. [Apple and Microsoft's pledges] don’t apply to us.”

This is made even more troubling by other comments that the head of the Rockstar Consortium, John Veschi, made in the same article, which included doozies like:

“Pretty much anybody out there is infringing… It would be hard for me to envision that there are high-tech companies out there that don’t use some of the patents in our portfolio.”

And this revealing comment that articulates Veschi’s justification for holding the rest of the industry hostage:

“A lot of people are still surprised to see the quality and the diversity of the IP that was in Nortel… And the fundamental question comes back: ‘How the hell did you guys go bankrupt? Why weren’t you Google? Why weren’t you Facebook? Why weren’t you all these things, because you guys actually had the ideas for these business models before they did?’ They were within a Bell Labs-y kind of environment, and maybe the wherewithal of turning them into businesses wasn’t necessarily there.”

So, to recap, the commitments that gave worldwide antitrust regulators the confidence to approve these controversial deals are being repudiated by the individual with the power to ignore them, and who thinks that:

1. Everyone in the IT industry infringes on his patents.
2. Because Nortel – his former employer where the Rockstar patents came from – had some ideas, but was less successful at implementing them, he has the right to hold the rest of the IT industry hostage.

Apparently, the purpose of the patent system is to allow unsuccessful companies the right to extract billions of dollars from companies that are more successful. (Again, how is this not a net drag on innovation?)

But the very fact that he claims EVERYONE in the IT industry infringes on his patents seems to be prima facie evidence that many, if not most, of these patents were not novel, and therefore invalid… unless he is contesting that every IT company stole Nortel’s ideas, which is laughable. But I digress…

What we do know now is that patent commitments made to competition authorities are suspect (and, of course, commitments are made to be broken), particularly when patents are controlled by NPEs outside of the direct control of the original purchasers.

Loose Nukes

To fully understand the problems posed by Intellectual Ventures’ involvement in this new consortium, one must also understand the tectonic shift in the underlying foundations of the patent system. Although the explosion of low-quality, poorly defined patents – particularly in the software space – has long been identified as a problem that greatly increases litigation risk and the overall deadweight loss to our economy, the problem has been largely isolated until recently. It was once thought that the threat of Mutually Assured Destruction (MAD to borrow the Cold War acronym), meant that the big companies with large patent portfolios would not sue their peers because they would be sued back and everyone would lose. However, the rapid growth of huge non-producing entities (NPEs) that exist solely to exert other people’s patents (usually acquired through bankruptcy) against successful companies greatly changed the precarious MAD equilibrium that once existed.

Some – admittedly clever – companies, such as Apple, recognized that they could acquire patents, take a perpetual license to them, and then sell them off to NPEs such as Intellectual Ventures (or as they have already done with Digitude), who are then incentivized to attack the original purchasers' competitors (because the purchasers have a license and its competitors don’t). This strategy allows the original purchaser to attack their competitors and make money off of the patent sale to the NPE (and often they take a cut of the litigation and settlement revenue as well) all the while insulating themselves from the threat of countersuit (the NPE is immune to the threat of counter-assertion because they don’t make products and therefore do not infringe on anyone’s patents).

To extend the nuclear war metaphor to encapsulate this new phenomenon, if the old paradigm was Mutually Assured Destruction where corporations, like nation states, refuse to attack each other because of the threat of personal annihilation, these new NPEs are akin to stateless terrorist entities with nuclear weapons, who are immune to direct threat of attack. Also, much like stateless terrorist organizations, these NPEs move in the shadows and cover their tracks. Intellectual Ventures, by one scholars account, has at least 1300 shell corporations – so its activities are difficult to track. So, we therefore see “states” discretely selling “nukes” to “terrorist cells” with the understanding that they will be used against their foes who cannot directly attack them back.

The bankruptcy portfolio auctions, however, are a variation on this theme, and are more similar to loose nukes from “failed states,” wherein weapons of business destruction flood the marketplace as one entity fails, and the remaining entities with the most to lose – enterprises that actually produce value – must scramble to keep these loose nukes out of the hands of less reputable actors.

DOJ Should Review Newest Auction with Recent Trends in Mind

These patent consortiums allow companies like Apple and Intellectual Ventures to work together to acquire more patents that will be used in the thermonuclear war against Android. As the case of the prior auctions make clear, the commitments that competition authorities have relied on in the past to ensure that these consortiums don’t use patents “anticompetitively” (which is semi-ironic, given that new patent thickets are valuable because they give you the right to harass your competition) are suspect at best, particularly because Intellectual Ventures will filter the patents through a network of “legally distinct” shell companies – companies that “companies” will likely claim prior commitments don’t apply to them – before they are used against Apple’s Android competitors, which they surely will be, given the incentives of those involved.

Given the Justice Department’s prior concerns and recent micro and macro trends in the patent ecosystem, it seems that it is completely appropriate for the DOJ (and competition authorities around the world) to review this upcoming transaction from a different lens than it did just 6 months ago. The world has changed.

Cross Posted from Project DisCo

Filed Under: mass destruction, patent auction, patent system, patents, weapons
Companies: apple, google, intellectual ventures, kodak, microsoft

Chorus Of Mainstream Press Saying The Patent System Is Broken Gets Louder

from the why-isn't-Congress-doing-anything? dept

We've been noticing that the mainstream press has really been speaking up about the broken patent system lately. It was mostly kicked off by the excellent This American Life story about just how broken our patent system is, and that seems to have thrown open the floodgates. So, suddenly an issue that was generally discussed mainly by entrepreneurs and geeks was suddenly showing up all over the place. Last week we noticed stories in both the NY Times and the Economist calling out the dreadful problems of the patent system.

And now we've got two more mainstream publications going further down that road. First up, is The Guardian, which focuses mainly on software patents in explaining how the system is really broken and wondering why the government isn't fixing anything:

Patents were supposed to protect innovation. Now they risk throttling it. Such acquisitions may drag technology companies ever further from their original core competences. Academic research by the Berkman Center for Internet and Society has found that software patents have provided no net benefit to the software industry, let alone to society as a whole. Tragically, because so many corporations which formerly opposed software patents have now joined the system, an effective solution will be harder to find. Once again consumers are pitted against the corporations. Where are the regulators when they are needed?

A much bigger deal, however, is that the Washington Post has a story by Pulitzer-prize winning business and economics columnist Steven Pearlstein, explaining how the patent system is completely broken and the patent reform going through Congress right now won't fix the real problems (he's actually a bit generous in thinking it will fix some of the problems). The piece is a giant condemnation of a broken patent system:

Silly me. I thought the purpose of patents was to spur innovation by giving people who invent something the exclusive use of their innovation for a limited time.

There’s still some of that. But out in Silicon Valley, patents have become the competitive weapon of choice, used by high-tech giants to bludgeon rivals and crush upstarts.

It turns out that the more patents you have, the more likely it is that you can extort exorbitant royalties from people who might have easily come up with the same idea or the same feature that you did but never thought to patent it. And the more patents you have, the more your competitor wants so he can retaliate with a patent suit of his own, claiming that it was you who stole the ideas from him.

In other words, it’s an arms race to buy as many patents as possible, bidding up the price of patents without anyone gaining a permanent competitive advantage. Like all such races, this one involves a huge waste of time, talent and capital, not only in the race to buy patents but in trying to win a patent on every half-baked notion that anyone thinks up.

Instead of spurring innovation and entrepreneurship, patents are being used by companies, venture capitalists and their cynical lawyers to stifle and discourage them.

Pearlstein is someone that folks in DC actually read, which means that our elected officials are hopefully reading this. Will it make some in Congress finally wake up and realize that the patent system is really, really broken, and the patent reform bill they're discussing does little to address the real problems? It would be nice, but it seems unlikely.

Filed Under: innovation, patent system, patents, press, software patents

The Economist Notices That The Patent System Is Hindering Innovation And Needs To Be Fixed

from the wow dept

A whole bunch of you are sending in one of the first mainstream articles I've seen on patents that gets almost (but not quite) everything right. The Economist has a wonderful piece that clearly explains why patents are hindering, rather than helping innovation. It notes the difference between innovation and invention -- and how patents quite often can hinder the former. It discusses how patent thickets get in the way of innovation, and the focus on using patents to force through massive cross-licensing deals simply adds transaction costs and reduces efficiency in the market. The solution to all of this put forth by the Economist is mostly the same thing we've been suggesting for years: bring back a real test for "obviousness" that gets rid of obvious patents -- though, it falls short in not suggesting an independent invention test for obviousness. The only other areas where I'd say the Economist article falls short is (1) simply assuming that patents do work in pharma and biotech -- when there's evidence that's not true, (2) assuming that a ruling in Bilski alone might clear up the obviousness issue and, finally, (3) its parting suggestion that programmers focus on copyright monopolies, rather than patents. Still, it's about as good a piece on this subject as you might expect to see in such a mainstream publication.

Filed Under: economist, innovation, invention, obviousness, patent system, patents

Editorial On Why The Patent System Should Be Abolished

from the in-the-mainstream-press,-no-less dept

We've certainly discussed the work of David Levine and Michele Boldrin plenty of times before -- and both were kind enough to participate in our CwF+RtB experiment earlier this year. If you haven't read their book, then you are missing out. Now, Levine and Boldrin have a new editorial up in the CSMonitor, explaining why they think the patent system should be abolished. If you've read their work, there's nothing surprising, but if you have not, it's a quick summary of the key points:

As a matter of theory, intellectual property is a double-edged sword. On the one hand, giving a reward increases the incentive to innovate. On the other, allowing the monopolization of existing ideas taxes the creation of new ones, thereby decreasing the incentive to innovate. The bottom line: Contrary to widespread belief, economic theory does not provide support for the continuous extension of IP. The only answer to the question of whether IP serves the desired purpose must be empirical. Does it work in practice?

A great deal of applied economic research has tried to answer this question. The short answer is that intellectual property does not increase innovation and creation. Extending IP rights may modestly boost the incentive for innovation, but this positive effect is wiped away by the negative effect of creating monopolies. There is simply no evidence that strengthening patent regimes increases innovation or economic productivity. In fact, some evidence shows that increased protection even decreases innovation. The main finding is that making it easier to get patents increases ... patenting!

No matter what your stance on this topic is, you have to admit it's impressive to see it getting attention in a mainstream publication like the CSMonitor.

Filed Under: david levine, evidence, incentives, michele boldrin, patent system, patents

Misunderstanding The Problems Of The Patent System

from the it's-got-problems,-but-not-these dept

Earlier this year, Alex Iskold wrote up a piece on why the economics of "free" was somehow bad. That didn't make much sense and we tried to explain why. Now he's written another article trying to explain why the patent system is in crisis, and it seems equally as confused. We absolutely agree that the patent system has some serious, serious problems -- but it's not for the reasons Iskold describes. First, he claims that the patent system used to work -- when historical evidence suggests otherwise. Almost every look at the patent system over history has found little to no evidence that it increased innovation. From Fritz Machlup to Eric Schiff to the more recent research of Scherer and Weisburst and others have consistently found little evidence that patents increase innovation.

Iskold, oddly, suggests that the reason why we're seeing open source rise up and an open sharing of ideas proliferate is somehow because of the patent system's failures (despite the fact that both became more prevalent and common long before software was considered patentable), and warns that this is somehow dangerous, because: "What happens when a big company copies a startup? What happens when dozens of startups copy each other?" Of course, that's what most people consider competition, and we tend to think it's a good thing in a capitalist society. It's what actually drives innovation, as pretty much all of economic history has shown. If someone copies you, you continue to innovate and beat them to the market. If you really understand your market better, then you can out-innovate them. And, despite continuous worries about "big companies" copying startups, history shows that it's not quite so easy. If the startup is successful, it's not so easy to just copy, because the startup has built up a reputation, which isn't so easy to copy. Witness how Netflix outran Blockbuster, despite Blockbuster copying Netflix. Witness how Google outran both Yahoo and Microsoft. Witness how Microsoft outran IBM.

It's not so easy to just "copy." And just copying isn't enough to actually gain marketshare.

From here, Iskold's column skids off the rails completely. It claims that the real problem of the patent system is the time between filing the patent and when the patent is granted, because that allows plenty of other companies to copy your patent and beat you to the market. That's so wrong it's difficult to know where to start. First, patents aren't published until 18 months after being filed. So, no matter what, you have an 18 month headstart. And if we're talking about software firms, that seems like a pretty damn big headstart. Furthermore, there's very little evidence of startups or even larger companies in the software space scouring patent applications to "steal ideas" from others. No, they tend to focus on what the market is actually asking for. And, in fact, there's ample evidence that many software firms actively forbid employees from looking at patents, as doing so may open them up to treble damages for "willful infringement."

Iskold seems to think that this patent scanning is what leads to tons of "me too" startups -- but the truth usually has absolutely nothing to do with the patent system. It's because multiple people recognize the same or similar markets, and over time are likely to attack it in similar ways. Again, that's competition -- and it's a good thing.

Oddly, towards the end, Iskold finally admits what he calls "the biggest irony in this patent debacle": it actually benefits consumers. That's not "irony." That's correct. Competition benefits the customer. That's how it's supposed to work. So what's the problem?

Well, according to Iskold, this isn't sustainable: "To not have patents at all means that at the end of the day big companies will always absorb all the best innovation for free." But, again, as we already pointed out, that's simply not true. Sometimes big companies win, but quite often, they do not. Big companies are slow and lumbering. Small companies are faster and more nimble and can often out innovate the slow companies with legacy issues. Competition is a good thing, Alex. Don't fear it.

Filed Under: alex iskold, patent system, patents, problems