The patent system is “a real chaos”. Its faults were laid bare yesterday in an extensive New York Times article, which quickly reached the “most emailed list” (The Patent, Used as a Sword; and see Melissa Schilling’s review). But the same article also hedged by reminding us “patents are vitally important to protecting intellectual property”. But is intellectual property really essential for innovation? For an answer, look just a little past commercial software and you will see vast open collaboration without patents or copyright. Wikipedia, an open initiative, answers many of our questions. Open source software such as Linux and Android power most commercial websites and mobile devices, respectively. In myriad forums, mailing lists and online communities, users contribute reviews, provide solutions, and share tips with others. Science has been progressing by enlisting thousands of volunteers to classify celestial objects and decipher planetary images. Innovation without patents is real. Researchers estimate that open collaboration and user innovation bring more innovation than than the patented kind. Our legal and commercial system can do more to encourage it.
A great New York Times article this morning (link below) details ways in which the patent system gets used as both an offensive and defensive weapon, with billions of dollars of collateral damage to start-ups, consumers (see the “patent tax”), and innovation in general. The victim in the opening Vignette (Vlingo, a voice-recognition software start-up) might have been saved by a simple change in the rules: make the losers of patent lawsuits pay the legal costs of the winner. It turns out that it’s rather easy to kill small firms (or force them to sell to you) by launching a patent lawsuit against them that bleeds them dry with legal fees. You don’t have to win — you just have to force them to fight until they no longer have any money. Vlingo ultimately won the patent lawsuit that had been filed by a much larger rival, but had to loot its own meager coffers to pay the legal fees of doing so. Vlingo slumped home with its patent lawsuit victory and shut its doors for good. If losers of such battles paid the legal fees of winners, such fights might both be less common, and less likely to be fatal.
The article also points out that software patents have proven particularly dangerous because they are prone to protecting vague claims like “a software algorithm for calculating online prices,” thereby granting the patent holder vast tracks of technological real estate. An interesting talk by Tilo Peters at the Strategic Management Society conference yesterday points to another useful tool for rationalizing some of this misuse of the patent system: Strategic disclosure. If, for example, you decided to publish a manifesto about all of the things you might do with software in the reasonable future (remember patents have a “usefulness” condition so you’re not allowed to claim something deemed non-feasible), you might be able to essentially proclaim that technological territory as unpatentable. It wouldn’t prevent competitors from developing in those areas, but it could keep them from patenting in those areas. In essence, it transforms a space in which property rights may be allocated into one in which property rights may not. I’ve left out some details but you get the idea.
Now it occurs to me that a fair amount of strategic disclosure in the smart phone space took place in the form of Star Trek episodes. I’m going to go look for references to prior art…
Businessweek has a piece on “typosquatting” – the strategy of buying up the misspelled domain names of popular web sites like twitter and facebook — faecbook, twitterr. Apparently the practice is very common. And, the most common misspellings generate significant traffic – for example, goggle.com had 824,850 unique visitors in September of this year.
So, there’s some work that studies the phenomenon of typosquatting, the origins of common mis-spellings (“fat finger”-effect), perpetrators etc. Here’s a paper by Tyler Moore and Benjamin Edelman (pdf), Measuring the perpetrators and funders of typosquatting.
From the above paper – here’s a comparison of candidate typo domains (based on established measure) compared with found domains. (Looks like there are still some opportunities out there.)
Here’s an interdisciplinary NSF program solicitation that may interest strategy scholars.
An important research interaction has emerged at the interface of computing and economics and social sciences. The synergy between these fields creates a rich opportunity for studying questions that involve interconnected systems with economic and social aspects. This research interaction has already led to the identification of a number of underlying principles and research themes. These include network structures in economic interaction, theories of learning in the context of such networks, welfare properties of equilibria, the design of mechanisms with constraints, the complexity of computing equilibria, the robustness of equilibria, and the roles of information, reputation, and trust in economic and social interactions. These principles provide lines of attack on a set of important applications. These include the emergence of new kinds of on-line markets, the roles of economic issues in the architecture of the Internet, the design and analysis of markets in the developing world, and the roles of social and economic networks in innovation and knowledge creation.