Software patents: Lots of whining, but reform unlikely

Software patents are being acquired like they are tactical nukes as companies look to build their arsenals.
Written by Larry Dignan, Contributor

The whine-a-thon over software patents---especially in the wireless industry---has reached a fever pitch, but there's little chance of anything actually being reformed any time soon.

Let's recap a few data points over the last week.

It's fairly obvious that patents are the new tactical nukes in the technology industry. Companies want to grab patents largely to defend lawsuits than actually create anything. The companies with the most patents win.

Short of some cross industry disarmament policy---something that won't happen---there will have to be some reform on the patent front.

Among the options:

  • Ban software patents completely. Some folks will argue that software patents are bunk. Cuban argues that software and process patents should be banned. The whole ban software patents thing is a tad unrealistic.
  • Reform the system. Patent reform has been on the radar for years. Nothing meaningful happens. Cuban noted:

It’s bad for my little companies. It’s horrific for bigger companies. It’s so bad that major tech companies are buying big collections of patents not because they want to own the intellectual property but rather because they want the ability to respond to patent lawsuits with a lawsuit of their own. It’s like playing a game of thermo nuclear war. If all sides have “nuclear patents” they can respond to patent litigation with equal force. In other words, if you have enough “nuclear patents” no one will sue you for patent infringement because you have enough power to respond in kind. It’s crazy and costing this country jobs.

Google just bid $900mm to buy a patent collection. Those patents ended up being sold for $4.5BILLION dollars. That is money that for could have gone to job creation.

And now the reality: Nothing is going to happen. Congress is a mess. Patents will always take a back seat to things like making interest payments, debt downgrades, elections and an economy that is sucking wind.

As a result, the thermo nuclear patent game will continue. Companies can whine about lawsuits and sky-high bids for patent portfolios all they want. Their time may be better spent acquiring patents.

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