The Patent Wars Heat Up

The news today that AOL is selling a bunch of its patents to Microsoft for $1.1 billion is the latest action in the rapidly escalating patent war between the online giants. Last year, Google purchased Motorola Mobility for the patents it held. This is a high stakes game played by the giants with the war chests to compete. The spectacle of Yahoo suing Facebook and vice versa is just the latest skirmish. Apple famously patents everything and is getting more aggressive about defending them. Having said that, if you have enough cash it’s apparently OK to work on a “sue me” basis.

The poster child for this is good old Google. Back in the day (the early 2000s) I was an amazed bystander watching Overture’s (then GoTo’s) invention of Pay Per Click advertising be acquired by Yahoo only to be wholesale copied by Google with its AdWords product. Yahoo and Google went on to settle for huge amounts of money, but in the long game Google came out on top, as their “borrowing” of the PPC idea became the financial foundation of their search dominance. Had they respected the patent the outcome could have been very different. They repeated the offense with the Android operating system. Of course, Apple will attempt to defend their position, but by the time it grinds it’s way through the courts it won’t matter; Android has already established a lead over IOS and it’s likely to continue strengthening that position. Clearly, the market advantage gained by infringement is greater than any likely punishment.

I guess if you have the budget to do so it’s cheaper to seek forgiveness than ask for permission.

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  1. Pingback: Keeping up with Google | ThinkJudd

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