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Big tech companies go after patents
Seal of the U.S. Patent and Trademark Office
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Steve Chiotakis: Over in Silicon Valley, a patent war is breaking out. The battle is between big smart phone titans. Companies such as Apple and Google,who are in a race to buy up patents from defunct tech firms.
Here's Marketplace's Steve Henn.
Steve Henn: Apple recently spent $2.6 billion as part of a consortium that bought up thousands of mobile tech patents from Nortel Networks, a bankrupt Canadian tech company. So is Apple planning to use these patents to build great new stuff? Probably not.
Chetan Sharma: They are using patents to slow down their competitors or even remove the competitors from the field.
Chetan Sharma is a mobile analyst and patent expert. He says when an industry expands as quickly as the smartphone market did, companies often end up using technology patented by firms that are no longer players. And they infringe on each others' patents too.
By buying up patents they can force the competition to pay patent fees -- and raise the price of competing products.
Sharma: Additionally, it also allows the company to start a new revenue stream.
The next big prize in the multi-billion patent war is a company called Interdigital. Its only real assets are thousands of mobile patents -- just what Apple and Google are looking for.
In Silicon Valley, I'm Steve Henn for Marketplace.
Regarding the patent segment, while I agree that the system is ridiculous, one comment that I didn't see in the report is that companies like Apple and Google are buying patents because if they don't, anyway somebody else will and they will have to pay to use the patent a lot of money. This patent war is not only about revenue, is about cost.
