Imagining a world of no patents - or patent wars

  • Article by: LEE SCHAFER , Star Tribune
  • Updated: August 28, 2012 - 4:26 PM
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FILE - In this Aug. 25, 2011 file photo, an attorney holds an Apple iPad, left, and a Samsung Galaxy Tab 10.1

Photo: Sascha Schuermann, Associated Press - Ap

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The technology community has been transfixed by the Apple v. Samsung case, one of the most intense legal battles over patent rights since Apple took on Microsoft Corp. nearly 25 years ago for copying Apple software.

The Apple-Samsung dispute featured two industry giants squaring off in the first of many patent cases involving smartphones and other cool gadgets. Apple demanded $2.525 billion in damages; a jury awarded a little more than $1 billion late Friday.

One of the hottest Internet debates about the case was kicked off last week by a Harvard Business Review blog post that ran under the attention-grabber, "Who Cares If Samsung Copied Apple?"

James Allworth posted it, arguing that if you care about innovation, and the economic benefits new products and technologies provide, "would we all be better off if we allowed -- even encouraged -- companies to copy one another?"

Allworth, an HBR contributor, enjoys a little visibility in the field of innovation theory by working in the recent past with Harvard Business School's Clayton M. Christensen. You maybe know Christensen's name for his groundbreaking work in the concept of disruptive innovation and his bestselling books, including "The Innovator's Dilemma."

Allworth said he has long been a critical observer of how the American patent system operates.

If he owns a house, he said, he can put up a fence to mark the boundary. If he owns a patent, which is a type of property as well, "it's just very hard for me to tell where the property line is," he said.

Technology companies are therefore amassing portfolios of patents to protect their product innovations and holdings to deal with what Allworth called an "explosion" of patent litigation. The Apple-Samsung case is but one in what trial judge Lucy Koh called "a worldwide constellation of litigation between the two companies."

Apple's basic claim, Allworth said, is that if Samsung can freely sell knockoffs of hugely popular devices like Apple's iPhone and iPad, then Apple will just stop funding the kind of expensive engineering and design work that created them in the first place.

Apple has been through this before when it sued Microsoft in 1988 -- the "look and feel" lawsuit over the use of windows and graphical icons to operate a desktop computer. "Well, Apple lost that case," Allworth said. "Then they turned around and innovated far more than they had in the past."

Allworth said he was trying to provoke a debate, and much of chatter online that erupted after his post came across as thoughtful. There are certainly folks in Minnesota questioning the value of the patent system in fast-changing technology markets.

Ravi Bapna teaches strategy around social media among other topics at the Carlson School of Management. He said the thinking in some information technology segments is moving away from patents already.

"The whole idea of 'here is an innovative product and we will patent it and just sit on it' -- that model is basically broken," he said. "In software, it's gone."

At the CoCo Minneapolis space, a sort of incubator for start-ups in the old trading room of the Minneapolis Grain Exchange, consultant Jeffry Brown helps entrepreneurs shape their strategy. As a practical matter, they often operate in the world Allworth envisioned, a world without published patents.

Brown said he often meets entrepreneurs jazzed by their idea and then just by using the Google search engine, he can quickly find "two dozen companies talking the same language. Now does it work exactly the same way? No, but it will be similar."

Yet there is no reason for an entrepreneur to give up after learning of two dozen similar concepts. "First to market is more important than" a patent, Brown said. "I do not mean first to market with new technology, I mean first to market with the most purposeful technology."

Michael Gorman is a founder of Split Rock Partners of Eden Prairie, a venture capital firm that has invested in fast-growing Code 42 Software of Minneapolis. After reading Allworth's post, he said he wasn't that impressed.

He concedes that Allworth may have a point with two giants like Apple and Samsung, with their vast engineering groups and global sales reach. Fine for them to slug it out without benefit of formal patent protections. But patents help level the playing field for small-company innovators.

Maybe only with some software and digital media technologies has the blistering pace of change moved beyond the ability of the patent system to effectively protect technical innovations, Gorman said. That's an industry, he said, "where we look for a management team that has the capacity to rapidly innovate."

But in other industries where Split Rock looks for opportunities, the idea of seeking patent protection and defending those rights is as critical as ever, Gorman explained. Anybody advocating the end of patent protection, even an acolyte of Clayton Christensen, isn't being realistic.

When one of Gorman's small portfolio companies in life sciences was acquired, the CEO got confirmation of what they suspected about the origins of the deal. When the CEO was touring his new parent company's headquarters, he was shown a door and told, "There's the roomful of lawyers we had working to get around your patents. We couldn't do it, so we had to buy you."

As Gorman put it, "that's reality."

lee.schafer@startribune.com • 612-673-4302

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