Thin Line Between Patent Litigation and R&D

Advanced technology companies today are essentially choosing to appropriate other companies’ technology rather than doing their own R&D, according to the author. They don’t acknowledge it or maybe even recognize it, but this fact – not patent trolls or others who invest in patent enforcement for profit – is the real reason there is so much patent litigation, he says. The ground-breaking innovations of last year are often viewed as no more than “plumbing” behind this years’ innovation, but the companies that spent billions of R&D dollars on ground-breaking innovations are rarely content to see new entrants simply adopt their technology.

The long running battle over Kodak’s patent portfolio, which ultimately resulted in companies banding together to purchase the portfolio for the benefit of all, represents one example of the cost to access past innovations.

Since free is better than not-free, and since companies rarely understand where innovation really comes from, there is a great resistance to voluntarily taking a license. Because patents represent the strongest form of intellectual property covering “borrowed” technology, litigation has become the de-facto sales process for IP licensing, and IP litigation costs are attributable to, and ought to be accounted for, as part of a company’s R&D spend.

The author suggests developing an understanding of what level of dependence your products have on the sources of third party IP, budgeting realistically for litigation and considering ways to encourage an efficient IP marketplace that does not require litigation.