Business - Written by Will Dick on Wednesday, July 2, 2008 15:03 - 4 Comments
Big Tech Companies Form Patent Alliance, and are Corporations the Future of Government?
Tech companies have long suffered from patent trolls: companies that bulk-buy cheap, unused patents from bankrupt companies, wait until someone becomes successful at doing something similar, and then launch a frivolous infringement suit that gets settled out of court. Well now the big tech companies are teaming up to fight back. Verizon, Google, Cisco, HP, Ericsson, and others have formed Allied Security Trust (AST): a venture that will buy-up patents that members might be interested in using down-the-road.
To head off concerns that the group will use litigation as a strategy, Allied Security Trust will sell the patents they acquire after they’ve granted themselves a nonexclusive license to the underlying technology. “It will never be an enforcement vehicle,” said [AST CEO] Hinman. “It isn’t the intent of the companies to make money on the transactions.”
The need for AST underscores how broken our intellectual property legal framework is. Rather than foster innovation, as it was designed to do (and was perhaps once effective at), it is allowing rent-seeking patent trolls to tax business and stifle innovation.
It is disgraceful how incompetent government has been at acting on intellectual property reform. But AST is an example of how businesses are addressing government’s failings by using their market power to make the intellectual property environment more open and collaborative.
Government has traditionally been seen as the instrument for openness and collaboration within an otherwise competitive economy. But I think that is changing.
Companies, not governments, are increasingly leading efforts to deal with social ills: car makers are following Toyota’s lead in going green, Starbucks sells more fair trade coffee than anyone else in the world, and shoe companies like Nike and Reebok are voluntarily audited by the non-profit Fair Labour Association. Legislators have tried, and failed, to act on all of these issues. But companies have made progress.
In my post The End of Capitalism, I argued that we are moving towards a post-capitalist society in which power within companies shifts from shareholders to stakeholders, and the source of value within companies is its social value. This trend may include the replacement of our governance institutions (developed in parallel with capitalism and now losing their legitimacy and effectiveness) with a much flatter, collaborative, and business-led model for government.
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