Near-Death Company Springs To Life, Thanks To Found Patents

from the questions,-questions,-questions dept

Dan writes “Ampex is another company resorting to an arsenal of patents to keep themselves alive. Now, their stock price price has taken off.” This story is an interesting one. The company has been around for quite a long time, and obviously has done some very innovative things over the years. However, its patent windfall seems like a fluke. It certainly doesn’t sound like any of the companies they’ve convinced to cough up these millions of dollars really made use of these patents — they just came up with the same concepts independently. That, of course, demonstrates the weakness of the patent system. The point of the patent system is to publicize the info, so that others can build on top of it, while compensating the original creator. The problem, though, is that if innovations are done entirely separately of the patents in question, then you could easily make the claim that the original patents aren’t valid. They should only have been granted if they were “non-obvious” and if others are coming up with the same thing independently, it’s difficult to claim it wasn’t obvious to the skilled practitioner. Either way, while the article suggests Ampex is trying to build a business model out of this, it’s hard to see how it’s sustainable for more than a few years. Sure, they’re creating a licensing program, but the patents will run out in a few years — and they realistically lucked into this patent windfall. They’ve just been hanging onto them for years, and suddenly noticed they were relevant. That’s not a sustainable business model, but a lucky windfall.

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