Bloody battles over intellectual property have become the tech world's new normal. Google just bested Oracle in an epic patent and copyright battle over the use of Java in Android. Apple is fighting in courts around the world. Technicolor, the company that brought color to the movies, is counting on patents suits as a revenue steam. A stellar infographic from visual.ly sketches the tangled alliances and conflicts among tech titans.
Technicolor doesn't appear in the infographic below. Nonetheless, the French company now has an entire division dedicated to ripping apart smartphones, looking for patent infringements the company can negotiate licenses for, according to Bloomberg. Technicolor holds 40,000 patents in video, audio and optics and is targeting large smartphone and tablet manufacturers. Once it analyzes a device, it will send the manufacturer a file that represents a starting point for negotiations. Technicolor is hesitant to sell its large patent portfolio even though the company is losing money, Bloomberg reports. That's because, as Technicolor lawyer Beatrix de Russe said, “If we start selling our patents, revenues will dry out.”
The implication is clear: Patents are not a tool for supporting innovation. They are a stick for beating money out of anyone within striking distance.
One company, backed by some of the largest names in technology, exists almost entirely for this purpose. Rockstar Consortium came together to buy Nortel’s 6,000 mobile-related patents for $4.5 billion last year. Backed by Apple, Microsoft, Sony, Ericsson and Research In Motion, Rockstar Consortium does nothing but dig through competitors’ devices and analyze them to see if they are violating any of the 4,000 patents that the company controls.
A quick guide to the chart below: The outside ring represents patents that have been transferred or sold. That's all the light purple lines leaving Nortel and going to companies such as Microsoft, Apple, EMC and Ericsson. IBM sold 2,094 patents to Google, which also acquired 17,000 patents when it acquired Motorola. Note all the lines extending to and from Apple. The iPhone maker is suing HTC, Nokia, Motorola Mobility, Samsung and Kodak. All of those companies have returned fire with their own patent suits against Apple.
In view of this quagmire, top entrepreneurs such as Mark Cuban are calling for patent reform in the United States. “There are industries where patents are used fairly to protect intellectual property. The technology industry is not one of them,” Cuban wrote when news broke that Yahoo is suing Facebook over patents. “Ninety-nine percent of the time they are anti-competitive, corruptive, impede creativity and innovation, and can kill small businesses. The ratio of patent law doing a good job protecting company IP versus it being used purely to negatively impact competitors or to troll for un-earned revenue is probably 1,000 to 1.”