The Necessity of Patents
The sudden surge in patent-acquisition displayed by Apple, Microsoft, Google and Oracle has brought about a surge in the public’s interest in patents, the necessity of buying up patents and the relevance of the act.
To briefly sum up the current situation, Microsoft, Apple and Oracle brought thousands of patent from Nortel Networks, an organization tethering on the brink of bankruptcy. Google, in what is widely perceived as an act of retaliation, agreed to pay $12.5 billion to take over Motorola Mobility’s ‘vast patent stash.’ Motorola Mobility is a struggling cell phone maker whose recently launched Android tablet, Motorola Xoom did not take off as well as the makers had hoped either. All in all, what resulted were two companies with lot of patents on their hands, but not enough of the required quality of products to support them. Hence it was easy to buy off patent from them.
When buying patents, expert feel that while anyone could easily spot a low price/earnings ratio, it is the out of which companies hold undervalued patents that actually provides the real investing edge. As of now, the interesting situation that has emerged around us today is what provides a golden opportunity for investors. According to Nir Kossovsky, executive secretary at the Intangible Asset Finance Society, a Pittsburgh research group, the “recent boom in patent sales is lifting patent values in general.†This in turn is what is actually providing investors with a good opportunity to invest in the ‘patent-line.’
To find out which patents are the right ones to buy at any given point in time is easy and a simple study of the digitized records of the U.S. Patent and Trademark Office is sufficient to discover which patents can be bought. Patents are generally bought by organizations keeping in view similar patents that have recently been bought by rival organizations to ensure that in no way is your product(s) hampered later on in its course by patent suits. That apparently seems to be the case with the tech giants of today.
An article I read online stated, “These patent grabs suggest tomorrow’s dominant Smartphone or tablet is a three-legged stool built from software, hardware and communicationsâ€"and companies are in a race to add rights to whichever legs they are missing.†The example seemed to be a very apt one, o I added it here. Only, my question remains, are patents really that important when working to develop product that will sell well? Do organizations have to fall back onto haggling for patent rights when trying to create products that will rock the world? Unfortunately, I believe that somewhere along the way, patents too are a necessity, whether we like it or not. Organizations, at the end of the day, are there in an effort to generate business, and to make a profit, one need to stay alert, and ahead of their competition to do well in any sector of the business industry. Even if to do so, they need to buy out a large number of patents.
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