An interesting little example of how the whole field of technology patents has become entirely Fubar'd. Amazon is thinking of releasing a smartphone to compete with Apple, Google's Android, the new Windows phone and all the rest. Before it does so it is seeking to buy a bundle of patents.
Sensible enough you might think: you need access to patents to make sure that the phone works according to the standards. But the patent bundles that Amazon is seeking to buy have nothing at all to do with such standards. For the standards patents are available upon RAND (or FRAND in Europe) terms anyway. What Amazon is looking for is just a bundle of patents. Any patents that can be used as a negotiating technique.
This story underlies this Bloomberg report about Amazon thinking of releasing a smart phone built by Foxconn.
Amazon.com Inc. (AMZN) is developing a smartphone that would vie with Apple Inc. (AAPL)’s iPhone and handheld devices that run Google Inc. (GOOG)’s Android operating system, two people with knowledge of the matter said.
That's OK, great in fact. More competition in the market and consumers should be happy. Amazon's basic tactic with hardware is to sell it as cheap as possible so that's certainly a consumer benefit.
Amazon is seeking to complement the smartphone strategy by acquiring patents that cover wireless technology and would help it defend against allegations of infringement, other people with knowledge of the matter said.
That's not so good. For Amazon isn't searching out patents which would allow it to build phones to, say, the GSM or CDMA standards. For those patents, by virtue of being included in those standards, must be made available to all comers on reasonable and non-discriminatory terms (RAND, or Europeans add "Fair" to the beginning to give FRAND). So any patent that is actually necessary to make a phone that interacts with the network is already available to them on exactly the same terms that Samsung, Apple, Nokia or anyone else pays for them.
No, what Amazon is looking for is just some bundle of patents, somewhere, that have something to do with mobile telephony. So that when (and sadly, it really is when, not if) they get sued by someone or other for breaching a patent then they've got some great big bundle of documents that they can wave back at them. Such patents can range from the possibly valid (slide to unlock perhaps) through to two that really irk me: Apple claiming a patent on a wedge shaped notebook and, unbelievably to me, on the layout of icons on the Galaxy Tablet in Europe.
I take this to be evidence that the technology patent system has simply got out of hand: that the system is entirely Fubar in fact. We need to recall what a patent is supposed to do: it is not that intellectual property is some God given right. Rather, we realise that given that ideas and technologies are public goods it is very difficult to make money out of having invented them. Thus we artificially create intellectual property in the form of patents and trademarks. But we are always walking a narrow line between encouraging invention by awarding such rights and discouraging derivative inventions by awarding rights that are too strong.
My contention is that the rights currently being awarded are too strong: we're finding that current rights holders have rights strong enough to discourage, indeed to stymie, subsequent add on innovation. Which isn't the point of the system at all: we've built the whole edifice in order to maximise innovation, not to maximise the rewards to those who do it first.
