It’s been said that the only thing patents encourage is more patents, and you can argue that ridiculous valuations seen on patents these days, combined with the ability to monetize them without doing a damn thing, has more and more companies seeming to be considering if there’s more value in just focusing on their patents. While the Motorola Mobility purchase by Google seems to have woken up the mainstream press to the problems of the patent system, for big companies, who haven’t been doing much innovating lately, suddenly there’s a temptation to focus more money on investing in their patents, rather than on investing in actual innovation. There’s been a lot of speculation that Kodak is now focusing on auctioning off its patents, since the company believes they may be worth much more than the rest of the company. There are rumors of RIM selling its big patent portfolio as well.

And it’s hitting other areas. TiVo, which has been involved in a few patent lawsuits, mentioned during its earnings call that it’s paying close attention to the “evolution” of the “patent world,” and that the company plans to “get the most out of this portfolio.”

You have to wonder if the company still owns the bull that it bought in Marshall, Texas.

Either way, it really is a sad statement. All these companies (mostly once big companies who have failed to stay on top) now seem a lot more focused on “maximizing the value of our patent portfolio.” You can understand why they want to do this in the short term, but it shows the screwed up incentives of the system. It’s not the innovation that’s valuable. It’s the patents that usually have little to do with the actual innovation that have become valuable. So these companies start spending all their resources on patent issues, rather than actual innovation. It’s the exact opposite of how the system is supposed to work.

Permalink | Comments | Email This Story