Patent deals

Posted Nov 28, 2006 0:56 UTC (Tue) by drag (subscriber, #31333) [Link]

patent litigation is virtually impossible (the costs are prohibative) to defend against until they actually try to sue you. And the lawsuite itself is very expensive.

So it's cheaper to cross license between corporations. They amass as many patents as possible as a form of 'nuclear defence' against patent litigation. You sue me, I sue you.

Then when time comes for the lawuit, or if they just want to get it out of the way for cooperation, then they swap money back and forth to resolve any potential legal issues.

This is great for big business..
A: the Patent portfolios looks great to potential investors.

B: it excludes any smaller nimble business from competing with you because they lack the legal resources to defend against your patents if you choose to excersize them. You can be big, fat, lazy and profitable without fear of serious competition from new software makers.

This sort of reason is why pretty soon the vast majority of real innovation in software will be done out of the U.S.A. were it is much much cheaper. (then when those corprorations get bigger then will be able to afford patents and will come back into the U.S.A to milk the remaining large software corporations in more licensing deals.)

Lawyers who are experts at programming and are experts at patent law + programming staff + cross licensing deals + adminstrative overhead to deal with the beuarcracy are a hell of a lot more expensive then just having to manage a staff of programmers. Not only is that much cheaper you also get much much superior results.