Tuesday, March 29, 2005

Sony Ordered To Pay $90 Million Dollars And Stop Selling Game Consoles

You can get more detail here from C-Net news. This is bad for Sony, but really not the point I'm trying to get at today. Eventually, Sony will pay whomever whatever is required to begin selling it's games again. Not to worry, the PS2 is not going anywhere for a while just yet.

How this affects the upcoming PS3 is another matter and another post.

So, what's the point right?

Patents are my point today. Our system is currently badly broken. What just happened to Sony is happening with increasing frequency to companies doing all sorts of business. Patents are rapidly becoming a threat to any new product development and that's not good for any of us.

Now is a great time to talk to your friends and other interested people about exactly what is wrong with patents that cover ideas instead of specific implementations of ideas. Ideas you say? Yep. In the late 80's, I believe, computer software patents were allowed, then business practices and from there pretty much anything goes.

The way things are going right now, the ability to actually do things and develop products will end up divided among patent holders who do nothing but collect revenue while giving nothing of value in return, thus causing a drain on the economy that hurts all of us. Our ability to build things will be controlled by these various patent holders all looking to make money through licenses and nothing else.

So, why is this wrong?

Glad you asked! Well, you didn't really, but lets just say you did and go through a little thought exercise. It's not long, I promise. It is however, worth thinking about.

Imagine somebody patenting something simple, like the drip coffee maker. How many different coffee makers would be be able to buy today and what would they cost?


1. There would only be a small number of products, licensed by the owners of the ability to make drip based coffee makers.

2. The cost of those would be as high as we could bear.

While easy, those answers really don't tell us very much do they?. The real story lies in the whys and hows behind those simple answers.

Lets take #1 for starters. Why would a patent on a drip coffee maker limit the number of coffee makers? Afterall, anyone who wants a license can get one right? While this would be technically true, where is the incentive to get a license? If there are people already making these coffee makers, why try to crash their party? It's probably easier to just find something else to make rather than try to take over the coffee maker business.

But, you say, "What if I have an idea for a really great drip coffee maker?". Wouldn't that be worth a license? Sure would, but, a license for what exactly? Permission from your new competetor to make your better coffee makers? And you have to pay them? That makes no sense at all. Why bother.

It's beginning to become clear isn't it? Nobody is going to bother to improve the state of the art when it's locked up by a patent that prevents those who would make things better from actually making money by doing so.

That takes care of number one, lets take a closer look at number two.

Why would the costs be so high. Wouldn't volume make up for a lot? Afterall we all want coffee makers. Selling so many has always made things cheaper before, what's the difference today?

Again, look at the incentives for the real truth. If you own the ability to make drip coffee makers, why bother giving anybody a deal? All you are worried about is license and royalty revenue. That's best for you when the product is high, not when the product cost is low.

This is what is happening to Sony right now. Somebody, somewhere owns the ability to make vibrating video game controllers. Not just a specific kind of vibrating controller, but almost all different kinds of them. Their overly broad patent covers just about any specific design, so rather than actually build anything, they are looking to license just like the fictional drip coffee example above.

What does that mean for us? Well, more expensive and potentially limited Playstations for starters. How about the longer term?

Putting the simple ideas I've written above together is not too tough. Longer term we are going to see fewer new products and less incentive to keep costs down.

That means we are going to pay more for the same technology than we normally would. Can you imagine what your computer would cost, or how powerful it would be if this had been the case early on?

I can, and it's not pretty. We would all be using the most limited computer at the highest cost because that's what is best for the patent holders. Sound wrong to you?

I sure hope it does because it sounds wrong to me too.

There is not time in this brief posting to explain all the differences, so I'm not going to even try today. I just wanted you to begin to think about patent reform today and be watchful. As this problem continues to grow, ideally you will tell your friends and elected members of legislature.

We need to fix patents before we kill our very ability to innovate that got us to where we are today.


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