Does The iPhone Need Patents?

from the questions,-questions dept

A bunch of folks have noted that Steve Jobs seemed mighty excited about the 200 or so patents Apple has filed around some of the technology involved in the iPhone (or whatever it's going to be called). A few have asked my opinion on the patents -- but not knowing what the patents are on, it's tough to have that much of an opinion on them specifically. However, Tim Lee points us to a blog post from someone who claims that the iPhone shows why patents are necessary, since "The investment necessary to develop a radically new interface like Multi-touch requires that Apple have a way to protect that investment. If Nokia, Sony, and Motorola could all simply copy it in their new phones, why would Apple even bother?" A few others have suggested the same sort of thing, but those two statements together actually seem to contradict each other. If it was so expensive to develop the multi-touch technology (which isn't new at all and similar technology has been demonstrated publicly in the past), then how would those other companies be able to just copy it? If it's so easy to copy, then it shouldn't have cost that much to develop.

Either way, Tim's response at the Tech Liberation Front is well worth reading, as he points out how silly that argument really is, noting that if the technology works as well as the demo, then Apple is going to make a ton of money with or without patents -- because people will buy the phone. In other words, the market is what gives Apple the incentives to develop these technologies, not patents. As Tim says: "Blafkin seems to believe that Nokia, Sony, and Motorola have a magical technology copying machine that can instantaneously duplicate Apple's innovations. But cloning a breakthrough new user interface is actually quite difficult. Just ask Microsoft, which spent six years trying to clone the Macintosh interface in the late 1980s.... Even if Nokia does a lot better than Microsoft and manages to clone the iPhone interface in, say, 2 years, that still means that they'll be perpetually 2 years behind. Why would consumers buy a knockoff of the 2007 iPhone from Nokia when they can buy the 2009 version from Apple?" That last point is key. The way to compete isn't by catching up and "copying" someone else, but to continuously innovate. Then, even if someone else catches up, you're still ahead -- and, if anyone can keep on coming up with new innovations, it appears to be Apple. So, even without patent protection, Apple would make more than enough money to recoup their development costs. But, the downside is that Apple doesn't need to keep up the same pace of innovation now. Others won't be able to compete and push Apple to innovate as fast because Apple can block them with patents. At the same time, those who don't want to live by Apple's rules (Cingular-only, 2 year contracts, no 3G, no ability to develop additional apps, no VoIP, etc.) but want a phone with a similar design will be out of luck. That's bad for innovation and bad for the economy.

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  1. icon
    Mike (profile), 16 Jan 2007 @ 6:42pm

    Re:

    First, my main point here is that I think the "exclusivity" protection of a patent is a good thing. Yes, there are other issues with patents such as what is obvious or not. But, from what I understand from all of your posts, it seems like you are against this "exclusivity" power of a patent and instead think that every idea should be up for grabs to whoever can bring it to the market the best. This is the only ONLY point of what I am debating here, so please do not bring up any other issue:

    Okay, we can look at the exclusivity part of it, but you can simplify a discussion to a level that it's useless. The purpose of the patent system is to put in place incentives for innovations. Getting more granular than that can make the discussion meaningless.

    There are two main steps in bringing an innovation to the market.

    1) Thinking up the innovation
    2) Having the resources to successfully bring the innovation to market

    A patent is an acknowledgment of the first step.


    This is a gross simplification, and perhaps explains part of the disconnect in this discussion. First, you use innovation here, when you actually mean invention. There's an important distinction. An invention is just the idea. An innovation is something that combines an idea and a market successfully. We're talking about promoting innovation, not invention.

    Also, your statement above reinstates the myth that innovation comes in a puff of smoke out of nowhere. That it's just a random idea that comes fresh and clean from someone's brilliant mind. That, unfortunately, is not how innovation works at all in almost every case. It's an ongoing process. A process of understanding, improving, tinkering, marketing, servicing, and much much more.

    So, to separate them out so simply is false, and isn't how the world works.

    When you simplify the situation down to make your point, the problem is that you have simplified the situation down to a world that doesn't exist, and therefore the points you make do not apply. We can start at that point, but as we add back in reality, you will find that your points no longer make sense.

    Many inventors may not have all the resources/skills needed for the second step and require time to develop them - here lies your misguided opinion that the exclusivity of a patent prevents innovations from reaching the market.

    If it is true that inventors do not have the resources to bring a product to market, that is a business issue. The nice thing about capital markets these days is that capital flow is quite efficient. If someone really has a good idea, there are means to obtain the finances to take them to market . That's much more true these days than in the past.

    A patent is published for the whole public to see, including many companies that have the resources to successfully bring it to market. So, even if an inventor doesn't have the resources to bring his idea to market, whats to stop a company from licensing the idea from the inventor and bringing it to the market themselves? Thus, if a company can license the technology from an inventor and bring it to market, how is the "exclusivity" of a patent preventing that innovation from reaching the market?

    You are making two points here that should be separated. The first is the supposed benefit of the patent in explaining a product. That is, indeed, one benefit of the patent system -- though, it's increasingly not actually used. Most actual patents do not explain an actual product or procedure to the point that it can actually be used to recreate that product. They're filed to be as broad as possible for economic reasons.

    The second point is that the marketability of patents then makes it easier to bring some products to market by easing the licensing process. However, you could just as easily do that through a contractual relationship, rather than a patent licensing scheme. Or it could be accomplished through an employment agreement. There are lots of mechanisms in place in the market that allow this to happen without granting an exclusivity right.

    Furthermore, because of the exclusivity right, anyone who comes up with a similar idea independently (or even a better version) is suddenly limited, and needs to pay extra. That money that could have gone into further innovation, instead goes to whoever was lucky enough to get there first, but who had failed to successfully bring the product to market. It's rewarding failure in the marketplace, which is not a good incentive system.

    However, in your world (where the patent system didn't exist) the only innovations that would ever reach the market would be the ones that only came from the companies themselfves. All of the ideas from independant inventors that may not have the resources to bring it to market would be lost. So, in your patent-less world, many innovations would never be realized. Howver, luckily in the current patent-world, the only potential hurdle in bringing an innovation to market is the possibility of having to share the profits with the innovation's creator.

    You have an idealistic view of the patent world that is entirely false in reality. Honestly, if an inventor cannot figure out a way to bring the product to market without patents, I don't see how that's an issue. If I write the best novel in the world, but am unable to get it published, that's my problem. I don't ask the gov't to stop other novelists from writing a book on the same idea because they might have more money that I do.

    So, in which world do you think an innovation has the best chance to be known and reach the market?

    The real world. The world where we have free flow of ideas and capital, such that capital and ideas and markets get matched up equitably in a manner that best serves society.

    As a basic example, look at the steam engine, the basis for the industrial revolution. It was patented, and because of that "exclusivity" not much happened. When it finally went off patent and there was real competition and the market could innovate that progress began. Competition is a wonderful engine in driving innovation forward.

    And while you claim that we must look at things in a static world, that world DOES NOT EXIST. The world is dynamic, innovation is dynamic. The point of the patent system (the entire, Constitutionally written point) is to put in place incentives for innovation. If the incentives already exist then there's no need to put more in place.

    You seem to think in your static world that innovation is just two things: think up idea, bring it to market. It's not. It's understanding a market, understanding a need, fulfilling that need, and continually improving on it.

    The reward, and the incentive for innovation is that there's demand, and the market will reward the demand monetarily.

    I recognize that you've painted a simple picture to make your point, but as you add back in reality, and the dynamic nature of any market, you realize that what made sense in your simple static world no longer applies in a dynamic complex world that we actually live in.

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