This Is What A Patent Thicket Looks Like [Updated]

from the visualization-works dept

A couple weeks ago, we asked if any smartphone could survive the patent thicket. In the last few months there has been a ton of lawsuits (and ITC filings) over smartphones supposedly violating patents. And since that post was written a few more lawsuits were filed as well. It's patent nuclear war breaking out in the smartphone space, and the end result is that we, the public, all suffer. Lots of money is being spent on lawsuits, and that could have gone into better development and giving us more features, better prices and better service.

Of course, while I described this in words, sometimes, as the cliche goes, a picture is worth a lot more. Thanks to Nick Bilton at the NY Times for putting together that picture (see update below) that shows what the patent thicket in the smartphone space looks like:
That's a picture of a patent thicket, and it's a picture of waste that does the exact opposite of promoting innovation.

Update: Unfortunately, it looks like Bilton may have exaggerated a bit. Joe Mullin looks through the details and notices that some of the lawsuits appear totally unrelated to the smartphone space. As he notes, there are plenty of smartphone patent lawsuits to go around, but there's no need to exaggerate them.
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Filed Under: patent thicket, patents, smartphones

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  1. icon
    Pirate Hater (profile), 5 Mar 2010 @ 8:47pm

    The Value of Patents to The Consumer

    Some patent scofflaws like to argue that patents hurt consumers, because they create monopoly pricing without competition. That is also a false argument.

    First, patents don't prevent competitors from developing competing products. A patent only protects one product. Others are always free to develop better mousetraps and sell them at lower prices.

    Second, to the extent that patents do enable a patentee to monopolize the supply chain and customers for his particular product offering, they have a cost reducing impact on that product, not a cost increasing impact, because they allow the patentee to achieve greater economies of scale in manufacturing.

    For example, if 10 different vendors split a market 10 ways, then each will only achieve an economy of scale of equal to 10% of the volume of the market for that product. If, on the other hand, the patent is respected, then the patentee can achieve a lower cost of production, because the patentee produces at 10X the volume, or 100% market share.

    In practice, the best example of the power of patents to reduce costs and make a product more available to consumers, is none other than Henry Ford. He was a prolific inventor, with 163 patents, which helped to enable him and his investors to achieve greater economies of scale in manufacturing.

    Had there been, for example, no patents at all in the early years of the auto industry, then the industry would've been extremely fragmented, and none of the companies would've been able to achieve the large market share and product volumes needed to reduce the unit cost and make autos more widely available.

    Patents give an inventor, entrepreneur, and his investors that ability to consolidate the supply chain for their product in a manner that reduces the costs of production, and makes the product more available to consumers, not less.

    And, at the same time, the other competitors are still free to develop a better mousetrap. They just can't copy the patentee's mousetrap. That's all.

    Contrary to the assertions of patent pirates and would-be pirates who want to weaken patent law, devalue the contributions of scientists and inventors, and fragment industries to the detriment of consumers and to their own personal benefit, patents are not anti-competitive, nor do they produce higher pricing in the long run.

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