Evidence that we are now witnessing one of the greatest battles in the information media industry is emergent. The giants of the industry is either actively pursuing ever more control or is being pushed to take defensive steps. Through the last century many similar battles has taken place: AT&T, the Hollywood Filmthrust and RCA vs Armstrong serving here as prominent examples.
The roles of the battle is not new: weak and unprepared governments, capitalism serving shareholders, and eager consumers. The goal of the current battle is to dominate so as to cut [exclusive] deals with content owners. As often seen before patents is used by the big guys to limit innovation from competitors, and push around those big enough to pose a competitive threat.
In earlier battles a very limited set of patents was used a weapons. Now the giants has to collect patent portfolios in order to gain sufficient control over/defense against competitors. A large number of consolidated patents is powerful when one tries to suffocate innovation and limit the innovative freedom of others.
Innovation has always been important in the Information media industry. Innovation could make the industry more or less self regulating. If a conglomerate/cartel manages to gain control over innovation that could be a threat and even ultimately replace them, they have also gained invulnerability. The loosers if the battle is the content consumers, that will have less choice. The free market can easily commit suicide, especially in the information industry.
The governments, and especially the USA, has much to easily given the giants the weapon they need: patents. It is maybe a bit counterintuitive, but patents is a construction for limiting further innovation. Governments are also generally weak at regulating the information media industry. This creates the opportunity to create an empire. The more powerful, the easier it is to get allies either by fear or business. But, there is a but, when governments has seen trough it's fingers of this battle yielding consolidated giants, they have also created a soft underbelly on those. The giants knows it, and parts of the governments knows it too. The parts of the governments that has understood, also know how to exploit it. Ultimately the information industry stiffens, only casting static shadows of its former dynamic nature. This is when capitalism stops working.
Recently the US and EU has implemented legislation that let them get access to the giants business records. In the name of the fight against terrorism and child porn, they have adopted draconian laws, that removes our digital privacy. This just get easier the bigger the giants gets, because the stakes get higher with size. No giant wants to be defeated up by an anti-trust case.
The current battle is more destructive than ever. The real stakeholders is not shareholders, but us. Our privacy is at stake. Information media industry collects private information and serves public information. It is a unbalanced game. We loose as consumers because without competetion, the giants will be lazy but almost impossible to replace. They have their patent portfolios. This equilibrium is exploited by our governments.
Monday, August 29, 2011
Monday, August 15, 2011
Patent dowry
Patents, that are originally meant to promote innovation and protect investments, has become a strategical asset in the game of alliances. For Google it has become an urgent matter to strengthen the Android ecosystem with a patent portfolio, not innovations. I guess it is important to the Android partners that they are "protected" by patents. Not necessarily things they have invented. Just any patents that can be used in the war against the other players.
Google providing a patent portfolio is merely a dowry to make the Android ecosystem attractive and protect it's inhabitants. Innovation has become a minor variable in the equation. Innovating mostly pays off in lawsuits these days, because there is always someone who has bought or patented something the innovation resembles. The genius working alone that need to protect her or his ideas is a myth. Innovation happens in teams and cooperation with other entities, and is mostly empiric.
What really happens now is patents are collected in portfolios and presented as a deck, either to be attractive or frightening. Entities are forced to join conglomerates and consortiums in search of protection. If this game is allowed to proceed any longer it will be hard, and even impossible to enter the market. An idea that competes with the existing products will not have a chance. Innovation and the free market suffers. More or less willingly cartels are born through consolidation as a result of the patent wars.
Apple is already in bed with media industry, network providers, so we already have conglomerate of corporations controlling a large part of media consumption. Now with Google buying Motorola hardware a manufacturer is the same entity controlling the largest switch (search engine) of the Internet. These entities become very powerful. As long as they behave nicely, this is not a serious problem. But this system is vulnerable in two ways. First, how can such powerful entities restrict themselves so that this power is not misused? Secondly they have a soft underbelly, as they will probably be investigated in terms of antitrust. But governments have recently become very interested in how the Internet and electronic communications can be surveilled and even controlled.
Will governments regulate or exploit the opportunity? As long as the patent war proceeds, the conglomerates will not dissolve. It is their survival strategy. But it undermines the original design of the Internet with distributed control. It does not matter if the Internet is technically controlled in a distributed manner, when the information flow is centralized.
The situation will then resemble some of the pre antitrust cases in the information technology industry. But this time it is driven by patents.
To begin with, selling and buying patents should not be allowed as this fuels the patent war. But I guess it is much more complicated to fix this problem now than ever. Big patent owners will not like the idea of their patent portfolio, expensively procured, should only be used to protect innovative ideas for a short period of time.
PS! I listened to the JavaPosse #360 Newscast while writing this. It has some interesting points about these issues, recorded almost a week before Google buying Motorola, and as such is free of speculations over why.
Further reading
Patents, Schmatents!
Google providing a patent portfolio is merely a dowry to make the Android ecosystem attractive and protect it's inhabitants. Innovation has become a minor variable in the equation. Innovating mostly pays off in lawsuits these days, because there is always someone who has bought or patented something the innovation resembles. The genius working alone that need to protect her or his ideas is a myth. Innovation happens in teams and cooperation with other entities, and is mostly empiric.
What really happens now is patents are collected in portfolios and presented as a deck, either to be attractive or frightening. Entities are forced to join conglomerates and consortiums in search of protection. If this game is allowed to proceed any longer it will be hard, and even impossible to enter the market. An idea that competes with the existing products will not have a chance. Innovation and the free market suffers. More or less willingly cartels are born through consolidation as a result of the patent wars.
Apple is already in bed with media industry, network providers, so we already have conglomerate of corporations controlling a large part of media consumption. Now with Google buying Motorola hardware a manufacturer is the same entity controlling the largest switch (search engine) of the Internet. These entities become very powerful. As long as they behave nicely, this is not a serious problem. But this system is vulnerable in two ways. First, how can such powerful entities restrict themselves so that this power is not misused? Secondly they have a soft underbelly, as they will probably be investigated in terms of antitrust. But governments have recently become very interested in how the Internet and electronic communications can be surveilled and even controlled.
Will governments regulate or exploit the opportunity? As long as the patent war proceeds, the conglomerates will not dissolve. It is their survival strategy. But it undermines the original design of the Internet with distributed control. It does not matter if the Internet is technically controlled in a distributed manner, when the information flow is centralized.
The situation will then resemble some of the pre antitrust cases in the information technology industry. But this time it is driven by patents.
To begin with, selling and buying patents should not be allowed as this fuels the patent war. But I guess it is much more complicated to fix this problem now than ever. Big patent owners will not like the idea of their patent portfolio, expensively procured, should only be used to protect innovative ideas for a short period of time.
PS! I listened to the JavaPosse #360 Newscast while writing this. It has some interesting points about these issues, recorded almost a week before Google buying Motorola, and as such is free of speculations over why.
Further reading
Patents, Schmatents!
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