When a Company Being Assessed by How Many Patents They Hold

After the acquisition of (patent held by) Nortel then Motorola Mobility, suddenly patent became something important and priceless. In the USA, the value of the patent may higher then gold. In the time when innovation is less than it used to be and all people tend to create the same things, there is a nightmare spread by the patent holder, ROYALTY, and hundred million will be taken under the law.

Let’s see the hot news from Sillicon Valley. InterDigital and Kodak suddenly became the trend because their on-sale status and the numbers of patents they held. Palm, again, became the byword after HP stopped its device development, simply because Palm has webOS and thousands of patents. Most of us, in fact, haven’t heard the name of InterDigital, but it has been targeted by giant companies like Apple and Qualcomm.

What does actually happen? Only by doing a little slip will make a company accused for violating other’s intellectual properties and should pay for about hundreds million or event billion dollars. The worse thing is the long steps of law procedures. It may take months in the court. Moreover, it will take much money to pay the lawyer. After the court, suddenly the patent holder get significant income from outside of its business core. For me, it’s pathetic. The patents war will be tiring and not support the innovation. It tends to be contra productive.

I ever read a blog postwritten by former CEO of Sun Microsystem, Jonathan Schwartz about why Apple and Microsoft never dare to accuse Sun for patent violation in the court. It’s simply because Microsoft and Apple also violate Sun’s patent. Don’t bite anyone if doesn’t want to get bitten. Patent becomes the right protection to dodge from law accusing for using technology without any legal permit.

This kind of “protection” is occupied by Google to protect the company from many “attacks”.  Google needs to have more patents as it weapons. After “failed” to take 6000 patents held by Nortel, Google strikes back by holding 17 thousands patents held by Motorola Mobility. If it is sum up with the pending patent requests, it may reach 24 thousands patents.

With $12.5 billion-acquisition-value, if all patents (including the pending ones) counted, it means that one patent equal to $500 thousands, assumed that all employees and assets are invaluable to the accusing company. No one knows if with patent’s protection, people who want to accuse Google will step back because they also violating Motorola’s patents.

The law’s procedure—in patent war—will be tiring. Nokia needs 20 months to finish its case against Apple to get money about $600 million. No one knows how much they spent to win the case. As the last resort, Nokia has been defeated by American cellphone producer—because the royalty will be paid by Android vendor for the similar violation. Again, the patent war is the war between titans, the rest should survive for not being persecuted.

How about Indonesia and the startup scene? We should admit that patent hasn’t been DNA for every innovation developed by companies here. Actually, I can’t imagine if the same thing happen in Indonesia. If your company does not have big money, I can say that pursuing royalty from patent will be very expensive. Moreover, if the company against you has Goliath scale business compare to your David business.

In my opinion, Indonesian startups should stick on their core business, register their innovation to get patent, and use patent as their protection to stop other people to imitate what you have had. Making money from patent hasn’t been popular issue and feasible for startups. You can open your eyes wide open on the intellectual properties and consult it to the professional for your own good.

[Image source: Savage Chickens by Doug Savage]