The Patent War is Stifling Innovation

PATENT EVIL How the Patent War is Stifling Innovation in Silicon Valley Patents were invented to protect innovation, but they are being used as weapons, by the evil tech companies and dreaded patent trolls, to stifle it. Whether buying up patents to protect against lawsuits, or amassing them in order to sue others, these villains have prioritized profit over creation. This is a crisis. But we must prevail. PATENTS BY THE NUMBERS Cost of defending a patent U.S. lawsuits over mobile tech- nology this year: infringement lawsuit: 270 $1M PRIOR TO TRIAL $2.5M Between 2004 and 2009: PATENT FOR COMPLETE DEFENSE INFRINGEMENT +70% LAWSUITS LICENSING +650% FEE REQUESTS 250,000 Possible number of patent claims a single smartphone may involve Of the 10 largest patent lawsuits of the last 10 years: In Q2 2011, Microsoft earned 3X more from Android than from Windows Phone 7 through HTC's use of Microsoft patents: were tech-related $21M 4 saw Microsoft the defendant WP7 $60M $6B was awarded total НTC The number of patent cases filed per year has nearly doubled since 1991: 3500 200000 3000 160000 2500 120000 2000 8000 1500 40000 1000 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 "05 '06 '07 '08 '09 VILLAIN ONE: TECH COMPANIES The patent war is reaching a boiling point, and this means that the biggest tech companies are furiously amassing the biggest arsenals they can - at literally any cost - and spending billions that could be spent on innovating products. GOOGLE $12.5B for Motorola Mobility Google 17,000 patents $400,000 per patent* *Estimates state that Motorola's patent portfolio accounted for half the deal's value. APPLE, MICROSOFT, ET AL. $4.5B for Nortel patent portfolio 6,000 patents $750,000 per patent Microsoft MICROSOFT, APPLE, ET AL. for Novell patent portfolio 882 patents $500,000 per patent Analysts agree that these deals were tremendously overvalued. And only a tiny fraction of these patents will ever be used for new products. VILLAIN TWO: PATENT TROLLS Patent trolls - also known as non-practicing entities - are companies that hold lots of patents but don't actually make any products. They claim to serve the interests of inventors without the capital to defend themselves, but critics say that they're simply lawsuit-happy patent hoarders. And most people agree. INTELLECTUAL VENTURES 35,000 patents owned $5B raised from Microsoft, Apple, Google, and more $700M of revenue in 2010 $2B total OWNER/KING TROLL NATHAN MYHRVOLD Intellectual Ventures isn't able to name a single inventor that it has helped in any way. Patent trolls now earn 77% of the total damages awarded in US patent lawsuits PATENT HOLDER MEDIAN DAMAGES AWARDED NONPRACTICING ENTITIES VS PRACTICING ENTITIES $5.2M 1995-2001 $6.3M $12.9M 2002-2009 $3.9M THE MOBILE PATENT NEXUS Few tech sectors are more fraught with patent-mania than the world of mobile. Here's who is suing whom at the moment: MOBILE PATENT SUITS: SUING / SUING EACH OTHER (CASE RESOLVED) / LICENSED TECHNOLOGY TO COMPANY AMAZON APPLE SAMSUNG HTC NOKIA KODAK MICROSOFT MOTOROLA WHY SOFTWARE PATENTS SHOULD END Many critics of the current patent system have likened software to spoken language - in essence, we all use the same language, but recombine it in different ways to form new meanings. So it is with software, they say. And since we can't patent languages, why should we be able to patent software? If the enormous war being waged between the tech companies is any indication, the cur- rent system does not work. The time for reform is now. CREATED BY: wwW.MBAONLINE.COM http://blogtopprospect.com/wp-content/uploads/2011/06/Talent_traffic.gif http://www.wsgr.com /PDFSearch/o9202004 patentpirates.pdf • http://gizmodo.com/5824912/who-is-really-snuffing- out-american-innovation • http://www.pwc.com/us/en/forensic services/publications/assets/ 2010-patent-litigation-study.pdf http://www.trefis.com/stock/msft/articles/69710/micro soft-4/2011-08-09 · http://www.businessinsider.com/htc-pays-microsoft-5-per-android-phone-2011-5. http://www.infoworld.com/d/the-industry-standard/tech-jobs-vaporized-patent-war-goes-nuclear-170137 · http://www.nytimes.com/2011/08/17/technology/a-bull-market-in-tech-patents.html · http://www.info- mech.com/drm_dictionary.html http://www.businessinsider.com/intellectual-ventures-2010-revenue-2011-3 · http://gizmodo.com/5831772/the-patent-cold-wars-visualized http://www.peworld.com/businesscenter/article/ 238173/its_clear_why software_patents_need_to_disappear.html http://techcrunch.com/2011/08/19/terrible- cost-patents/ PATENT CASES FILED PATENTS GRANTED