from the the-evidence-keeps-rolling-in dept
So why the sharp drop? Basically, the companies that were sued stopped innovating. As Fisman summarizes:
Why the slowdown in sales? Imagine what would happen to iPhone sales if Apple’s last product was its 3G phone introduced in 2009: Android-based devices would be running away with the market. Tucker claims that at least part of the reason imaging software sales were slowed by the Acacia suit is that R&D at the affected companies went into a deep freeze. In the two years following the suit, none of the defendants came out with a single new version of their products, while improvements continued in their text-based systems and at smaller competitors not subject to the suit.One of the most difficult things about discussing how the pace of innovation is held back is the difficult of showing what doesn't happen. We get this all the time, where people who can't understand the difference between absolute changes and the rate of change, insist that because there is still innovation in a market, that innovation hasn't been hindered. Of course, that's ridiculous. No one is saying that all innovation ceases. The concern is merely with the rate of change: the pace of innovation, and how it may be slower than would otherwise be seen. The difficulty, of course is in how do you show what would have been? That's the most challenging part. But this study does a really nice job of showing how innovation in the space slowed down massively just after the lawsuits, when there's almost no other explanation for how that might have happened. It's an incredibly damning report against patent trolls and how they hinder innovation.