Monday 31 October 2011

Trick or Treat, Extortion and Patents

Tonight, the 31st of October, many children will be out "trick or treating". While some may call me a grouch, I find the whole concept rather disturbing.

Trick or treat is very simple. The child knocks on your door and offers you a choice. Either give them a "treat" (money or sweets), or they will perform a "trick" (something unspecified, but probably something very annoying and messy).

What other words and phrases do we have that describe this modus operandi:

"Money with menaces"

"Protection racket"



So, around the world, thousands of parents are happily letting their child go out and blackmail/extort people in their own homes. Personally, I find the parenting aspect of this deeply disturbing - teaching children how to use extortion to get what they want.

So, whats the link to patents?

Well, patents have become simply another form of extortion.

Company X goes along to company Y and says "look, I have a great wodge of patents here, pay me lots of money or I'll cause you lots of grief". Its simply trick or treat in corporate clothes.

(Lawsuits, at least in the US and UK, tend to be won by the party with the most money, not the party who is "right". Thus, for most companies the extortion threat is generally strong enough to make a smaller company pay the protection money.)

The effects of this are causing terrible grief to this industry. Right now everyone is suing everyone. Well apart from IBM, and to some degree Microsoft, who appear to have a big enough wodge of patents to waft around that they can scare everyone else into submission. Heck, IBM even has a patent on the "business process" of extortion by patent.

The situation is now at a point where I would suggest the following advice holds to entrepeuners.

Make sure that your startup is either relatively small and insignificant so that it doesn't attract attention (if you have no money its not worth blackmailing you), or is so wildly successful that you can afford to pay the extortion/protection money.

(In case you were wondering, Google is the classic case of a company that became wildly successful and wealthy but didn't submit to extortion. And one look at the mess of lawsuits it, and related Android partners, are suffering from shows how bad it can get, such as Microsoft earning more from Android through extortion than it does from its own phone OS. If you know patents and want a job, Google has lots on offer.)

Viewed in this way, it should be clear why patents are not "protecting the little guy" or "promoting innovation". They simply reward longevity and ability to be scary.

So tonight I encourage those parents amongst my readers to not allow your children to go out and learn how to extort/blackmail. Perhaps in 20 years time corporates will be a little better as result.