You Succeed By Executing Well, Not By Gathering Patents

from the rembrants-in-the-garbage dept

Patent attorney Joe Root sent us a link to an interesting essay on how companies became way too focused on intellectual property over executing sound business strategy in the late 90's, thanks in large part to the book, Rembrandts In The Attic. Root points out that the poster-children in that book were companies that focused too much on patents alone, and failed to execute in the marketplace, leading to failures. At the same time, the company that was held up in the book as missing out on the patent train was, which the book predicted would lead to Amazon's downfall. Amazingly, the authors of the book even focused in on Amazon's failure to patent its "one-click" ordering system:
"Amazon's commercial fortunes would have been far better served had it patented technologies truly strategic to its business, such as the one-click ordering system that the company pioneered and that is used widely by on-line retailers today. That was a real business method choke point... that Amazon could have controlled to no small advantage. But as it is, without that proprietary advantage and with its brand strength eroding, companies like Virgin Records and PetSmart are unafraid to compete directly against the giant on-line retailer. Don't be surprised if Amazon's stock market fortunes head south when investors realize this fact."
Of course, as most everyone probably already knows, and as Root highlights in the essay, Amazon actually was in the process of patenting the one-click feature. Yet, rather than helping the company, that one patent (to this day, actually!) has become a symbol of just how screwed up the patent system has become. It also created tremendous ill-will towards Amazon until the company was forced to back down from attempts to enforce it.

The key realization that comes from Root's essay (which also dips into military strategy) is that, in the big rush to focus on the value of "IP" and patents in particular, many companies out there forgot that patents are rather meaningless if you can't actually execute on a business strategy providing something that the market actually values at a price they can afford.
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Filed Under: execution, patents
Companies: amazon

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