A few weeks back, we noted how some were freaking out over the fact that patent applications were down, without bothering to look behind the numbers at why. Instead, they jumped to the conclusion that innovation in the US was dropping. johnjac points us to an article where folks at Cisco suggests that it might just be tech companies realizing that patenting everything is a waste of time and money. In fact, the story states that Cisco recently changed its patent strategy from trying to patent everything to trying to focus on things that it believes is really innovative, rather than everything it can possibly get a patent on.
I can already hear the usual crowd of patent holders in our comments. They hate Cisco and pretty much any big company. They’ll interpret this statement as meaning that Cisco has become less inventive and is more focused on “stealing” inventions. Of course, what’s amusing is that they’ll never present any evidence for those accusations (though, I’m sure they’ll accuse me of being on the take for Cisco even though we’ve never done any business with Cisco in any way whatsoever).
That said, I do find some of the comments from Cisco odd and somewhat unsupportable:
“The arms race approach doesn’t pay off,” he says. “It doesn’t do you a lot of good to have a lot of patents.”Why? The patent landscape has changed dramatically. Patents often land companies in court as they fight over who invented the idea first. Lawsuits still might involve competitors, but increasingly Cisco finds it is battling what Chandler calls “non-practicing entities.” These are companies that exist only to acquire patents and then seek to extract money from big companies for infringing on them. The more patents you hold, the more likely one of these companies will sue you.
The first part is true. Lots of companies find themselves being sued by non-practicing entities, but it’s not because of the number of patents they hold. The NPEs (patent trolls, patent hoarders, whatever you want to call them) aren’t suing those who have the most patents. They’re suing whoever has (1) products on the market and (2) a large bank account. Cisco could have no patents at all, and it would still be getting sued just as much by NPEs. So, frankly, I don’t buy the claim that the more patents you have, the more likely you are to get sued. Instead, my guess, is that Cisco has realized that getting patents (especially in such large numbers) is an expensive process, for little benefit. It may help in some lawsuits against competitors (when Cisco can threaten to counter sue over other patents), but you only need so many patents for that. So, it looks like Cisco is building up a stable of defensive patents, and has realized that you don’t need the largest number. That’s a good thing, but the claim that more patents makes you more of a target just doesn’t make sense.
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