Who Needs Innovation When You’ve Got Cash?

With interest rates so low, banks around the United States are shouting the same mantra to people seeking shelter: Why rent when you can buy? In the technology world, the equivalent motto for the current zeitgeist should be: “Why innovate when you can buy?”

After all, a recent spate of intellectual property case settlements sends some very scary messages: that companies don’t need to innovate for themselves anymore; that the technology some of the biggest names in the tech world have built their businesses and reputations on may have been co-opted, borrowed, duplicated or outright pilfered; and that all of this can be made right simply by doling out dollars.

Get in Line

EBay, Research In Motion, Symantec, EMC and, of course, Microsoft, all have had patent infringement judgments handed down against them or have cut out the middleman by settling cases themselves. Each settlement is carefully worded to avoid any admission of wrongdoing, but it doesn’t take a Rhodes scholar to recognize that companies don’t slap millions of dollars down on the table without good reason.

We’re not talking about chump change. Symantec paid US$62.5 million to “buy” patents that another company accused it of using without permission. The late and questionably great Be Inc. walked away from a sit-down with Microsoft with $23.5 million. And a jury ruled that eBay should pay $35 million to make up for infringing the patents of MercExchange.


You could argue that these settlements are win-win situations. The smaller company or individual gets a handsome payday, and the company buying the technology gets to go about its business, which, at least in part, consists of making money from others’ innovations.

This is not to say that companies and others accused of similar infractions don’t push the envelope themselves. And it’s true that some infringement may be inadvertent or at least without malice. After all, technology grows by evolution as much as revolution, and great minds do think alike. But the fact remains that in many cases, the disputed technology is at the core of what the big-name companies do.

Which brings us again to the fairness question. Do payouts really create a win-win situation? Probably not, given that the deck is stacked in favor of the big company with the team of lawyers and the patience and capital to stretch legal battles out into the next millennium if necessary.

Business as Unusual

The payees are cutting their losses, to be sure, but the little guy on the other end of the table is probably looking down to count the last bullet in his gun. He is outmanned, outmaneuvered and being pressured to sign on the dotted line by lawyers who know a cut of something is better than a cut of nothing.

It’s not pretty, but this type of transactional invention is de rigueur in the tech world today. It’s an accepted cost of doing business as usual. So what’s the problem?

The message is the problem. The suggestion is that companies can wait for others to come up with the next big thing, then just buy it from them. The message is that it’s business savvy, not technological brilliance, that gets you to the next level in this economy.

Consider that the next time you stop to wonder when the next big technological advance will come along, scoop up the tech world and carry it to renewed glory. Maybe that inventor is thinking twice about the 99 percent perspiration he has to expend and whether the payback is truly worth it.

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