Monday, December 13, 2004

The danger of patent-licensing firms

Many have compared these new patent licensing firms to terrorists, and in some ways, the analogy is apt. When the Soviet Union collapsed, one of the biggest worries was that rogue military personnel might sell off one or more of the USSR's nuclear missiles to a terrorist group. Securing those weapons became a top priority. The reason was fear -- fear that the terrorists, who had little to nothing at stake in terms of world peace and national stability, would use the missiles to extort or manipulate the world political climate. Unlike the United States or China, which could be retaliated against and which had a stake in stability, terrorists were essentially immune from attack, and thrived on instability.

With the patents of bankrupt dot-coms, the dynamics are similar. Rogue licensing firms buy up these patents and then threaten legitimate innovators and producers. They have no products on which a countersuit can be based and no interest in stable marketplaces, competition or consumer benefit. Their only interest is in the bottom line.



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