Perspective # 21 – Intellectual Property Dimension Part Two

Intellectual Property Dimension Part Two: In good old days there were not much ‘innovation competition’ - for example we did not have multiple scientists working on the same objective – say curing baldness! Now research is going on on everything under the sun and the catch is that if you are not very careful one can step on another’s toe and get sued big time.

To make the matters worse patent trolls are waiting out there to blackmail you as soon as you invent something!Be paranoid as now the world is flat.Kodak is the most often quoted case study. They unknowingly (?) infringed on Polariod patents and suffered badly – they had to shut down a $1.5 Billion factory and pay $909 Million as damages ..and to top it they paid over $100 Million as litigation fees. What is more interesting was that it was considered a victory for Kodak as they were originally sued by Polaroid for $12.5 Billion!!! (Jeez! that is a helluva lot of money)

Sometimes it is plain stealing (c’mon- though all companies swear by their values and have appointed ‘chief ethics officer’ etc. ,most of them indulge in corporate espionage and have dirty tricks departments) GE was caught infringing MRI patent of Fonar and ended up paying $128,7 million. Microsoft keeps paying! They paid $160 million to Digital and $ 30 Million to IBM for patent infringements. (‘Infringement’ is the right word sir, not ‘stealing’!) These are scary numbers. Who has got time to pore the thousands of patents for possible clashes? Note that 145,300 international patent applications were filed in 2006. Imagine if you are innocent and get sued.

This is what happened with Apple iPod. Steve jobs and team invented the amazing UI where one can easily navigate the menu. They launched it globally and was an all time hit. The loss making rival Creative Electronics also had developed a similar UI and applied for the patent. Apple woke up but bit late – 18 months later they also filed for the patent but clearly Creative had the time advantage and their ‘Zen patent’ won. The Zen Patent is summarized as “automatic hierarchical categorization of music by metadata. The ability for a digital music player to display music using artist, album and track menus” United States patent law is notorious for its ‘first to report invention' system. To make matters worse for Apple their archenemy Microsoft had also applied for similar patent and won and Apple’s patent applications were rejected. Apple lawyers tried the “maa kasam mein chori nahi kiya.Yeh mera hai” (I swear by my mother, I didn’t steal.It is mine) pitch but failed ☺ Just kidding! I dont want to get sued! but jokes apart this is called the classic double whammy or gridlock! Apple angrily sued Creative back claiming that creative had infringed seven of their past patents but it was bit too late. They literally had Apple by their balls! Just imagine the pain - As of September 2007, the iPod had sold more than 150 million units worldwide. Imagine the frustration of Apple designers … anyways the legend Steve Jobs managed it somehow – we don’t know the details but certainly millions have changed hands. Creative also became a licensed ‘made for iPod’ accessories maker. The story ends and they live happily ever after!

During Edison days we never had these issues.. no one came back and said “excuse me Thomas – I invented the bulb before you”!!!!!