Google’s Defensive Patent Acquisition

by Stephan Kinsella on April 4, 2011

I’ve discussed before the practice of defensive patenting and defensive patent publishing–companies acquire patents or publish their trade secrets to prevent others from suing them for patent infringement (or to prevent them from patenting the same idea). This results in huge waste, as companies acquire patents simply to ward off lawsuits; it erects barriers to entry to smaller firms who do not have a big enough patent arsenal to be protected or to enter into cross-licensing arrangements with existing patent holders; and it forces smaller companies to make public information they would prefer to keep secret.¹

Google explicitly admits it’s doing this in Patents and innovation, which describes its “bid for Nortel’s patent portfolio in the company’s bankruptcy auction.” If they win, they will likely spend hundreds of millions of dollars simply to “create a disincentive for others to sue Google” so that Google will be allowed to “continue to innovate.” What a sad waste of resources. And what about all the smaller companies and innovators and entrepreneurs who cannot afford to acquire a defensive patent arsenal? They are naked before the power of IP holders. I continue to be astonished when I find libertarians who support IP and think that it is compatible with property rights and the free market.

Google also notes that it has “long argued in favor of real patent reform,” and in that linked post they say they are “optimistic” about the chance for patent reform in 2009. Well it looks like patent reform may actually happen in 2011–but there is no reason whatsoever to be optimistic about it, as I note in Patent Reform is Here! O Joy! and Prior User Rights and Patent Reform.

[Mises]