Calling Michael Porter

The snarky exchanges between Google and Microsoft continue. The latest is "When patents attack Android" a shallow attempt at riding the anti-patent troll sentiment generated by the NPR This American Life broadcast, "When Patents Attack." The exchanges are taking place on Twitter and the Google blogs - a testament to the reach of new technology in the public relations wars.

Google is pouting that the Rockstar Bidco bullies are trying to prevent them from selling Android devices. It's not fair. It's hindering innovation. That the Rockstar guys are banding together to add $15.00 per device to the cost of each and every Android device. (The $15 number is another one of those patent urban legend numbers that lives on its own without a lot of detail behind it.) I pay a premium every time I buy an Apple device and I'm happy to do it because I perceive that I am getting value for my purchase. Do these guys really think that a $15 surcharge is going to be a critical factor in a user's decision to buy an Android device?

And what about that dubious statement that "A smartphone might involve as many as 250,000 (largely questionable) patent claims, and our competitors want to impose a "tax" for these dubious patents that make Android devices more expensive for consumers." So where did this come number come from? I'm sure this commentary endear's Google with the folks at USPTO but more importantly, if google was so worried about the "largely questionable patent claims" why didn't you challenge the claims when the applications were published instead of waiting for your competitors to whack you in the head with the granted patents? (I like the fact that the link to the word might included in the post sends you to a Financial Times article that you can't read unless you are a registered user - way to go on the transparency front.)

Perhaps it might be a good time for these smart guys at Google to take a look at some of Michael Porter's work on competitive advantage and competitive strategy. There is the part about first mover advantages in which the first guy in a market has a competitive advantage and the other guys play catch up. . Kind of like Apple running Nokia and RIM out of the smartphone market and leaving Microsoft empty handed in the tablet market. Apple had first mover advantages in the smartphone/touchscreen world - oh and great design and an awesome marketing plan.

Lots of patent guys get this first mover thing - consider Apple and the iPod and Apple and the iTunes store. Apple, a patent savvy organization, licensed the infamous One-Click patent from Amazon. While I could fill pages with a discussion on whether business methods patents like the Amazon One-Click patent are valid or useful, that's not the point. Patent savvy guys figure out what they need to license, get the best price they can, build it into their cost structure and head out to the market to sell their stuff. Ask Barnes & Noble what happened to their 1999 holiday sales when they didn't have a license for the One Click patent.

Then consider barriers to entry - yep, patents are one of those things that restrict entry into an industry - in this case the mobile device space. Note to Google - see the Polaroid v. Kodak case where Polaroid kept Kodak out of the instant camera business. It wasn't pretty. When you enter the game late, the playing field isn't level. The guys who got there first have competitive advantage.

Google pointed out in its blog post that DOJ is demanding the winning group (Microsoft, Oracle, Apple, RIM, Sony, EMC) give a license to the open source software community. What's curious here is that Google seems to imply that this is a done deal - that the Rockstar team is going to be forced to license the technology. It doesn't look like DOJ has finalized such a demand yet. This doesn't change the equation though - developers of Android products are still going to have to pay royalties, the real question is where will the numbers come out in light of the earlier $15.00/device royalty. Things are not going to change any time soon.

I find it interesting that a company founded on a patent is whining that patents are impeding their ability to innovate. Maybe Google should take part of the money it didn't spend on acquiring the Nortel patents and invite Dr. Porter in for a discussion on the state of the technology markets and how to achieve competitive advantage.

Battle of the Smart Phone Titans

The latest salvo in wireless war came from Apple this week with it's patent lawsuit filed against HTC. There's plenty of speculation about this being an indirect hit against Google and the visit to the ITC to stop any further imports of infringing Android smart-phones which must be creating major acid indigestion for the organizations investing in marketing the technology. The patents are pretty interesting and so are the dynamics in the patent lawsuit arena. Soon all these guys will run out of lawyers aren't already "taken" as a result of their conflicts checks. I read all the articles. Aside from the annoying fact that most of the reporting didn't have even the most basic explanation of what the patents are all about and what features in particular are in play; the dynamics of the battle of the titans should make for interesting IP theater.

Here are my two favorite quotes from opposite ends of the intellectual property spectrum:

From Steve Jobs:

"We can sit by and watch competitors steal our patented inventions, or we can do something about it. We decided to do something about it...We think competition is healthy, but competitors should create their own original technology, not steal ours."

From Douglas Rushkoff's article, "The iPhone Becomes a Bully", from the DailyBeast:
"Still, in an increasingly crowded smart-phone industry, it's hard to tell if Apple's claims are more about protecting innovation, or merely protecting market share. In fact, these two aims may even be at odds."

Last time I checked I thought that one of the major reasons of protecting innovation with patents was to protect your market share - at least if you are someone who actually makes stuff or at least get license revenue from the folks who make stuff that uses your innovations.

Wheel Reinvention Prevention:

To avoid "wheel reinvention", which is not good IP practice, here are two excellent links. Nick Bilton of The New York Times provides a compelling visual on who is suing who. The second is a link from engadget.com which provides a technical breakdown of the patents in suit by Nilay Patel.

Stay tuned.