The Computer World blog had an interesting post “Microsoft dominates Apple in patents, so why does it lag in innovation?”
Just-released information shows that Microsoft was granted the third most U.S. patents of all companies in 2010, with Apple way down the list at number 46. Why, then, does Microsoft lag so far behind Apple when it comes to developing innovative products?
Let us get rid of one point of contention – patents DO NOT signify innovation. Patents are one approach to protect inventions. There are many others with different advantages (trade secrets, copyrights, trademarks etc.). Hence, the rest of this post is about what is the best approach to protect inventions or results or R&D in general. I lean towards keeping inventions secret as long as possible and choosing patent ONLY if:
- The invention is fundamental and disruptive
- The invention is easily visible and can not be kept a secret
- The invention has a long life. Hence if and when the patent issues (six years), the patent will be still valuable
- If some one were to infringe a patent on the invention, it would be easy to detect said infringement. For example, an algorithm to detect movement in video is not easily detectable as there are many possible alternates.
- There are no simple workarounds. Even if the patented approach has value, people might just find an alternate way to achieve the same result (and hence the patent would be worthless).
- There is a clear business case for patenting (it can cost tens or hundreds of thousands of dollars depending on coverage)
Here some BAD reasons to file for patents:
- Patents to reward inventors: It might be better to give a cash award instead
- Patents to protect near-term markets: By the time the patent issues, it might be completely irrelevant
- Patents for incremental inventions: May not justify the investments
Here are my my suggestions for IP protection:
- Innovate quickly: This what Apple does. If you are moving through technology quickly, there is no need to bother about other people copying some of your ideas (especially with some of the concepts below)
- Use trade secrets: If you can keep your invention secret, you have to spend no money on protecting it. It also lasts indefinitely (as long as you can keep it a secret) as opposed to patent that expire.
- Build a software-hardware ecosystem: The iPhone-iOS-iTunes market ecosystem protects each invention much better than any patents or individual invention protection could.
- Use innovative barriers to entry: Even though Goolge gives away Android source code for free, the Android Market is a great way for Google to control IP. Only “authorized” devices are able to access Android market place. This helps Goolge control the IP AND make money from app sales!
In summary, Patents are not a measure of innovation, they are not a measure of how well a company is performing on R&D and they are not always the best way to protect IP.