Patents are worthless

In a recent post, Guy Kawasaki made the statement that "the most valuable outcomes of a patent are often impressing your parents and filling up space in your MySpace profile."  Ouch.

Sadly, I partially agreed.  For instance, a colleague of mine recently snuck in the back door of a dog and pony roadshow a "big-law" IP firm was doing here in Boise.  During the presentation, a patent attorney for the firm told the audience "you must patent everything…must file a patent application on every invention you think of." 

Such a "one-size-fits-all"/"patent everything" mentality drives me nuts.  It reminds me of attorneys who like to milk it.  There are times when patents make sense, there are times when they don’t (particularly for independent inventors).  It is the attorney’s job to counsel their client’s accordingly.  As Abraham Maslow once said, "If the only tool you have is a hammer, you tend to see every problem as a nail."

Back to Guy…Matt/Doug/I took exception to Guy’s statement that unless you are a large corporation (or in biotech, chip design or medical devices) that patents are only good for "impressing your parents."  In response, we wrote a meme back to him that explained the other (non-offensive (litigation)) purposes of patents…a "counterpoint" response which Guy ended up publishing on his blog:  Counterpoint: Patents and Defensibility.  The post is a great explanation of the importance of having a patent strategy beyond just "patent everything."  In my biased opinion…it’s worth the read.

Related posts:

  1. Patently Obvious Blog on X-Patents
  2. PCR patents last copy

One Response to Patents are worthless
  1. lotz
    December 10, 2006 | 6:06 pm

    IP royalties are a 500 billion dollar a year business. Qualcomm alone booked almost 3bn in licensing revenue in 06 at a 91% profit margin.

    Qualcomm Technology Licensing (QTL)
    2004 2005 2006
    Revenue 1,331 1,840 2,630
    Net Income 1,200 1,600 2,400
    Op. Margins 90% 90% 91%

    Dolby’s amrgins were the same.

    Dolby Licensing
    2004 2005 2006
    Revenue 211,395 246,298 301,663
    Net Income 157,838 205,740 274,776
    Op. Margins 75% 84% 91%

    P&G, CAT, Dupont, Sandisk make tons of money licensing their IP. Even Mr. Kawasaki’s Apple computer is in on the game.

    http://www.smarthouse.com.au/iPods_And_Devices/iPod_Accessories?Article=/iPods%20And%20Devices/iPod%20Accessories/B8G3H6R6