This Is Getting Ugly. Very Ugly

by Christopher Paul on May 2, 2012

The Loop pointed me to a Reuters article highlighting Motorola’s latest patent victory in Germany. If you recall, Motorola is fighting Apple and Microsoft there and, as Jim says, “This is getting ugly.”

Very ugly.

The IP situation around the globe is a mess and the nuclear patent bombs that companies keep dropping are exploding left and right. The scorched Earth philosophy is burning everyone but the lawyers. Some of the most innovative companies are suffering from a losing participant who had to be acquired by Google just to survive. Patents are the only thing going for Motorola because their operations are in shambles losing nearly $180 million dollars.

And Germany is quickly becoming worse than Texas for patent battles. Not only was Apple ordered to disable push notifications for email, Microsoft was ordered to stop selling it’s X Box and Windows 7. Windows 7!! I’m not a Microsoft fan and ditched Windows a long time ago but every gamer and PC user in Germany will suffer. Businesses can’t purchase a new computer unless it has Vista. I know nothing about the German patent system but can you imagine the chorus of complaints the US courts would hear if the leading gaming system suddenly disappeared from the shelves? It would be madness!

It used to be NPEs would target Texas or the USTPO for relief. Then then they figured out the international courts worked faster and were more favorable. Suddenly, that’s not enough and Germany seems to be bending backwards to allow litigators injunctive relief to extract fines and settlements. Why would anyone want to do business in Germany if they can yank it away at any allegation of infringement?

But getting back to the patent mess for a minute… Motorola and it’s new owner, Google, should be careful with how much nuclear fuel it’s using to target it’s rivals. Right now, Google might be “winning” in this space but it won’t last forever. Apple and Microsoft are sure to win eventually; they have more recourse than most people think. There’s patent invalidation, appeals, and even the US courts can step in to delay enforcement of Germany’s ruling (although I don’t know how that’s possible but, hey, I’m not a lawyer). But in less time than it takes to see the flash, Google will find a patent bomb dropped on them in Germany and then they’ll be on the receiving end of some critical piece of their business. I can see Gmail or search shutting down. I never thought the X Box would be banned so don’t call me crazy for thinking the same tactics could backfire on Google.

At some point, though, the real innovators have to take a stand and say enough is enough. Google, Microsoft, Apple, Samsung, Nokia, RIM, and others have to realize there too much at risk for stockpiling patents and using them against each other. It will fail the investors, the consumers, and the employees. The only people who stand to gain from this type of war are the lawyers. They’re all being played and losing the game – badly.

Every company I’ve mentioned here has great talent and innovative technologies. Some are better than others and that will change over time; no one participant can be on top forever – it’s impossible. It’s time that governments and the major consumer producing companies take a long look at what the patent systems and the abuse of them, respectively, will do to the bottom line. Which is consumers can’t buy their goods suppressing their revenue growth nor will they pay VAT or sales taxes on their purchases. And this doesn’t account for the smaller players and startups who might never produce the next revolutionary products like Facebook, Twitter, Instagram, or YouTube did before.

This is getting ugly. Very ugly, indeed.

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