Innovation and Patent Wars

Few things matter more to a technology company than its patents—except, perhaps, its patent lawyers. Companies like Apple, Google, Microsoft, Oracle, and Samsung are engaged in high-stakes “patent wars” as lawsuits, and the threat of lawsuits, over patent infringement are on the rise. Especially when it comes to the smartphone industry, it seems that everyone is suing everybody else, claiming that their intellectual property is being ripped off. Google recently spent $12.5 billion to purchase Motorola Mobility—largely, some observers think, in order to gain control of its thousands of patents. This acquisition reveals just what a treasure patents have become.

What is a patent, and how is the battle over software patents in particular affecting innovation in the U.S. economy? A patent is to an inventor what a copyright is to the author of a book. It offers protection from copying, so that inventors can produce and make a profit from their inventions. “Infringement” occurs when another producer ignores the patent and essentially “pirates” the invention. Some people argue that software patents are different, and should be granted much more rarely, if at all. So much litigation over intellectual property and patents is diverting resources and investment away from innovation and thus is putting a drag on economic growth.

Generally speaking, patents are recognized as a good measure of innovation. A recent report that ranks the world’s Top 100 innovators calls innovation “the cornerstone of economic growth and success, for both the companies that innovate and the countries that embrace them.” The report bases its rankings on the number patents granted and recognized worldwide. By this measure, the United States is clearly leading the global economy in innovation. Of the top 100 innovative companies, 40 are American.

Image credit: © iQoncept/Fotolia

Related Links

  • Do the Patent Wars Threaten Innovation?
    Learn about the economic importance of patents and about the legal battles surrounding them.
    (Source: BBC News; November 9, 2011)
  • Google-Motorola: It’s All About the Patents
    Read about the high stakes involved in the competition over high-tech patents, particularly in the smartphone industry.
    (Source: Wall Street Journal; August 22, 2011)
  • Report: U.S. Firms Lead Top 100 Innovators List
    Examine the rankings of countries by number of innovative companies; not surprisingly, the USA is #1.
    (Source: Science Fair, November 16, 2011)
  • Top 100 Global Innovators
    This first-ever Thomson Reuters report rates global companies (and countries) according to which are the most innovative, based on successful patents.
    (Source: Thomson Reuters; accessed November 30, 2011)

2 Comments

  1. caitlyn says:

    this is so true

  2. victoeia holiday says:

    i agree

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