02 Aug 2011 Patent laws stifle innovation
Embracing innovation is crucial in the procurement world. Peter Smith’s recent series on procurement innovation has produced some fascinating debate, but it’s not only innovation in our procurement processes that are important, we need also to be mindful of new products and new way of doing things so that when we don’t become blinkered in our sourcing approach. Innovation is great – which is why our patent laws are so bad.
Let me illustrate with an example. Spotify, the innovative and well respected music streaming and subscription service was launched in the USA a few weeks ago. According to CBS and reported also in The Economist:
“PacketVideo, a software company that enables wireless streaming of music and videos on mobile devices, filed the suit against Spotify on Wednesday, claiming that the U.K.-based company violated a patent for “distribution of music in digital form.”
The plaintiff cited a violation of U.S. patent 5,636,276 and says “Spotify USA has offered for sale, sold, and imported products and/or services configured to infringe the ‘276 patent, and instructed and encouraged others to use the ‘276 patent in an infringing manner.”
“PacketVideo has a strong intellectual property portfolio, and will take any necessary action needed to protect its intellectual property and prevent the misuse of its patents,” says Joel Espelien, general counsel and vice president of strategic relationships.”
So PacketVideo invented streaming of music? Of course they did – they are the most well known and widely used music streaming service … wait a minute. Packet who?
British Telecom went to court a decade ago claiming to have invented the hyperlink in 1976 – long before the world wide web was conceived – without success I might add. It was only a few weeks ago that Apple issued a lawsuit against an Android phone manufacturer to prevent them using the idea of auto calling a phone number embedded within an email. Fair perhaps but Apple could have stopped all imports of these phones pending a resolution – a quite disproportionate result if it were to happen.
The patent laws that allow this kind of action and the corporate behavior that encourages it doesn’t protect or encourage innovation, it stifles it.
Of course intellectual property should be protected but we operate in a world where there is simultaneous leading edge thinking and the concept of invention has changed. It was 1995 when the first true e-procurement application – that is a web based B2B application making available products to buy from multiple suppliers including functionality to support P.O. generation and approval workflow – went live in a commercial environment. I say it was the first. I can’t be sure. I just don’t know of an earlier one. I know about this, because I was there. I conceived of the idea. I designed and managed the development of the application. Would I say I invented e-procurement? No I wouldn’t, because no-one invents anything. We discover.
This is important because until we, and especially the Americans, get over our fixation with the concept of invention and the associated patent laws, innovation will continue to be stifled and we will all suffer.