Microsoft’s Android Shakedown - Timothy Lee - Disruptive Economics - Forbes

Forbes has a take[1] on the Patent system - nothing new here except that it's probably a lot more eye catching than the usual rants on Slashdot, considering the audience Forbes enjoys.

There's also this[2] from Ars Technica, a book review that is related to the same issue but a "Timothy B Lee" who could probably be the same person.

Will anything come of it? Keep hoping... Meanwhile here are a few snippets from [1]:

This story sheds light on the recent string of stories about Microsoft demanding royalty payments from various companies that produce smart phones built on Google‘s Android operating system. Intuitively, this doesn’t make much sense. Most people would say that Google has been more innovative than Microsoft in recent years—especially in the mobile phone market—so why is Microsoft the one collecting royalties?

The reason is that Microsoft has more patents than Google. A lot more. The patent office has awarded Google about 700 patents in its 13-year lifetime. Microsoft has received 700 patents in the last four months. Microsoft’s total portfolio is around 18,000 patents, and most of those were granted within the last decade.

Even if you think Microsoft is more innovative than Google, the engineers in Redmond obviously haven’t been 25 times as innovative as those in Mountain View. So why the huge discrepancy?

Getting software patents takes a lot of work, but it’s not primarily engineering effort. The complexity of software and low standards for patent eligibility mean that software engineers produce potentially patentable ideas all the time. But most engineers don’t think of these relatively trivial ideas as “inventions” worthy of a patent.

Creating such a bureaucracy has a high opportunity cost for small, rapidly growing companies. Most obviously, it requires spending scarce capital on patent lawyers. But it also means pulling engineers away from doing useful work to help lawyers translate their “inventions” into legal jargon. And that, in turn requires a shift in corporate culture. Startups are innovative precisely because they avoid getting bogged down in paperwork. Convincing engineers to pay more attention to patent applications necessarily means that they spend less time doing useful work, and that can be fatal to a young startup.

The opportunity costs to getting patents is much lower for mature software companies like Microsoft or IBM. They tend to have more money and engineers than they know what to do with. And their software development processes are already slow and bureaucratic. So it’s much easier to add a “fill out patent applications” step to the official software development process, and the negative effect on engineers’ productivity is much smaller.

URL[1]: http://blogs.forbes.com/timothylee/2011/07/07/microsofts-android-shakedown/
URL[2]: http://arstechnica.com/old/content/2008/07/book-review-7-08.ars

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