Tim Lee

Copying Innovation is Hard

Mike Masnick offers another example related to last week’s discussion of whether patents are needed to protect software innovations:

Microsoft has long viewed Google as a serious competitor, and apparently Bill Gates and the folks in Redmond have been pulling out all the stops to compete with Google. In many cases, they’ve created products that seem as good, if not better, than Google’s versions. Yet, despite all of that, they’re losing traffic while Google gains it. Once again, it’s not just about the technology, but the perceived view people have of Google as compared to Microsoft. Microsoft just hasn’t been able to convince that many people that its search and mapping solutions are as good or better than Google’s. Despite the claim that there are “no switching costs” for users to go elsewhere, that’s not quite true. The perception that Google is better (and the feeling that it’s “good enough”) means that there’s no reason for people to look elsewhere, and a Microsoft offering would need to be not just better, but significantly better to attract attention. Alternatively, they can work on increasing their brand value as well, in the space of online services. In other words, there are plenty of things that go into being able to innovate and build a successful product–and simply copying someone else’s technology is often a small part of that (and usually not a particularly good strategy). Patent protection only protects that aspect of copying (business model patents are another issue completely), but if they’re supposed to encourage innovation, and the technology is only a small part of innovation, then the incentives are mis-aligned. The market can reward innovation without needing government monopolies and protectionist policies. The trick is to continually innovate, not just in the technology, but in the quality, the service and the brand as well.

Quite so. It needs to be stressed that the goal of patent law is to provide sufficient incentive to “promote the progress of science and the useful arts,” not to maximize the profits of innovators. Clearly, Google has been able to turn a tidy profit (to put it mildly) from its search engine without any significant recourse to patent law. Even after five years, one of the wealthiest companies on the planet has apparently not been able to produce a search engine that consumers perceive as being equivalent to Google’s offering. This suggests, I think, that a software innovator retains significant market advantages even after competitors have succeeded in cloning the major features of its product. And that, in turn, casts serious doubt on the notion that innovative products like the iPhone or Google wouldn’t exist but for the patent system.

January 16, 2007 | Comments |

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    Once again, it's not just about the technology, but the perceived view people have of Google as compared to Microsoft.

    Perhaps the fact that users of Microsoft's other products have been so abused, that the association with Microsoft is actually a big minus. Not to mention the backlash against absurd business practices, and illegal maintaince of a monopoly has indelibly stained Microsoft.
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    Man, ssheeesh, when talking about patents, "copying" is not relevant. That belongs to copyright doctrine. Uhh....

    A couple other points:

    Google did patent a lot of its search technology. This will enable it to further commercialize and improve on that technology. Don't doubt that Google developed its software with patenting in mind.

    Microsoft entered the search engine late and is now the third ranked search firm.

    Who has cloned Google's technology. Your statement about this refuts the whole argument of your post.

    Uhhh, would the iPhone or Google search technology exist without patents. Probably in some form, but with patents, these firms can share the knowledge from their R&D;, collaborate with firms holding complementary technologies and further invest in refining their products.
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    Tim, can you clarify one point. You've stated elsewhere that "copying is innovation." Can you expand, describing both formal means of appropriation, the concept of spillovers and dynamic efficiency.
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    You've stated elsewhere that "copying is innovation."

    I don't remember saying that. Do you have a link?
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    Man, ssheeesh, when talking about patents, "copying" is not relevant.

    You've never clarified why this is so, partly because you have yet to explain your distinction between "imitation" and "copying".
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    Ack, sorry for the bold. I meant to use a br tag instead. It's late...
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    Lewis, I'll reply to you here rather than TechDirt as Masnick's post is getting to long.

    In IP lingo, copying does take on certain context, implying that someone is aware of a technology by copying it. Thinking more about this, imitating might also imply something similar and thus not be right when talking about patents. Check out the post I put up on IPcentral about Lemley's writing on an independent invention defense for patents (I would post the link but then my post would take a long time to clear).

    The whole concept of of independent invention in patents suggests that "copying" is not relevant to patent infringement. Patent doctrine is not meant to prevent mere copying, so to say that its hard to copy patented technology isn't really saying much.

    Tim, I recall Masnick quoting you a couple weeks back, but if this is not your view, then I apologize. I raise the issue though because I wanted to gauge what boundaries you would suggest for the value of copying in innovation.

    The notion that "copying is innovation" does have some truth to it. At the beginning of the industrial revolution, nations often *leapfrogged* by copying and refining innovations from other nations. Early in the Internet era, academic scientists often shared research and encouraged copying of their work.

    In today's economy, some level of copying is still important when the societal value of an invention or knowledge is greater than the private value (economists call it spillovers). To facillitate spillovers, IP doctrine has such provisions as *misuse*, reverse engineering exceptions and limitations to protectable subject matter. Thus, current IP doctrine does support the notion that *copying is innovation* to a limited extent.
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    ***The whole concept of of independent invention in patents suggests that "copying" is not relevant to patent infringement.***

    Sorry, I meant to say that *copying* is not necessary nor necessarily relevant to patent infringement.
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    Tim, you've got your facts wrong again. Your claim: "Clearly, Google has been able to turn a tidy profit (to put it mildly) from its search engine without any significant recourse to patent law" is not remotely true. Google has patented its page rank algorithm, and that's the heart of their search engine. They also have a number of other patents in the search area that are quite significant. Here's a list of 38 Google patent applications.
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    Richard, has Google enforced any of its patents? Earned licensing revenues on any of them? I'm pretty sure the answer is "no." Every major software company files for patents because if they don't they're dead meat should a company with a large patent portfolio target them. But if they haven't used their patents for anything other than self-defense, it seems unlikely that the patent system is important to their business strategy.
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    Uhhh Tim, a patents value doesn't just come from enforcement or licensing.......:) Google's patents still provide it with the kind of exclusivity to improve on its technology.
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    Noel, how does that work exactly? Does the warm and fuzzy feeling from seeing their name on a patent give them greater motivation to produce better technology? If Google never enforces its patent or seeks licensing revenue from it, how does the patent give it any kind of "exclusivity?"
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    Tim, patents are a FORMAL form of protection, thats a bit more than a warm and fuzzy feel.

    ***If Google never enforces its patent or seeks licensing revenue from it, how does the patent give it any kind of "exclusivity?"***

    The possiblity of enforcement...
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    OK, do you have evidence that Microsoft or Yahoo have steered clear of implementing certain features in their search engine to avoid infringing on Google's patents? Or are you predicting that Google will be suing Microsoft, Yahoo or other infringers in the near future?

    If not, I'm having a lot of trouble seeing how Google's business strategy would be any different in a world without patents.
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    You seem to be saying that a patent is worthless unless another party is deterred from making a certain technology in a particular way, or there is a suit. I see some logic in this, but not really an argument. Of course, I can't predict the future like you can, and don't know if Google will ever enforce or licenses its patents. Having patents gives it more options though.

    There are a variety things that could be going through Google's mind. I can't read their mind like you can, but here are some prospects:

    Google's patents basically raise the bar on entering the search technology market. They might say: "Hey, we're Google, we have these patents, don't make anything like them, figure out your own way." This is good for innovaiton because it forces creativity and deters duplication.

    Or, Google can be saying, "we've invested in this technology, Uncle Sam gave us a patent, now our patent is public info and we can license it to others." This is good for innovation because it spreads knowledge resutling from R&D; to the technological community.

    Or, Google might say, "haha, we're patent trolls, if our firm ever flopps, we'll sue any company still standing in the search market." this is not good for innovation... and I doubt its google's strategy.
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    Google's patents basically raise the bar on entering the search technology market. They might say: "Hey, we're Google, we have these patents, don't make anything like them, figure out your own way." This is good for innovaiton because it forces creativity and deters duplication.

    Noel, there are already several big companies making search engines, and as far as I can tell, they work very similarly to Google's own search engine. Yet as far as I know (correct me if I'm wrong) Google has no sued any of those companies. So it doesn't seem very likely that this is their strategy.

    Or, Google can be saying, "we've invested in this technology, Uncle Sam gave us a patent, now our patent is public info and we can license it to others." This is good for innovation because it spreads knowledge resutling from R&D; to the technological community.

    Really? Most of the software patents I've looked at don't have nearly enough detail to replicate the patented technology. And as I said before, I don't believe that Google has actually licensed any of its patents.

    Obviously, I can't prove that patents will never be a part of Google's business strategy. But it seems pretty clear that they're not an important part of their strategy right now, and you've offered nothing but speculation that that might change in the future.
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    Google is interested enough in patents to have built a customized search engine for the USPTO database. They probably didn't do that for fun.
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    They probably did it for the ad revenue, don't you think?
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    Tim, you seem to be writing under the assumption, among many, that patents need to be leveraged in certain ways to be useful. Should Google wait until someone develops similar technology before trying to patent their work, should they wait until they see an infringing product to seek a patent. I mean...uhhh
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    Noel, companies--Microsoft, Yahoo--have already developed similar technologies. If patents were an important part of Google's strategies, they would have already sued those companies. The fact that no such lawsuit has occurred seems like strong evidence that that's not Google's strategy.
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    Google makes its money selling ads, not licensing patents, so if that was your point, it's certainly valid. However, there's an interesting side point to consider. Google's main revenue stream is ad words, and the patent behind that is actually owned by Yahoo, who licensed it to Google for some stock. So obviously, Google isn't going to run around suing people for violating Yahoo's patents on ad words.

    Perhaps the moral is that Google is both less innovative and less virtuous than is commonly believed.
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    What. First Tim states that after 5 years the wealthiest companies on the planet cannot beat Google at its game, then he says that they're infringing its patents, then he says that all the patents he's seen are so vague there's no point in replicating them.

    Lets just wait and see what Google does Tim:):)
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    Noel, there's nothing contradictory about those three statements.
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