Now that I’ve convinced my closest family members to move to Vonage, I can expect that should Vonage lose its court appeal on patent infringement charges and be forced to shut down, that that they will rightfully kill me. Moreover, I will understandably be expected to move all of them to another provider with similar features at a similar price. The problem is, there is no such animal. Which brings us to today’s rant: patent law.

Patents were originally envisioned to provide some protection for inventors to recover the costs of their research and trials. After all, without a patent, someone who spent lots of time and money inventing something new could be quickly tossed from the market by someone coming along and copying the technology and selling it cheaper. After all, the copier has no research costs to recover, so he can afford to sell cheaper. The result would be a loss of innovation for the country. There would be no incentive to invent.

This is most typified by the pharmaceutical industry where it may take 10 years of research and clinical trials to bring a new drug to market. Without the rights to make an inflated profit on that drug for some period of time, companies would shut down their research labs.

However, in recent years patent strategies have changed, especially for high-tech companies. Many companies are becoming patent mills. They are cranking out patents on ideas and concepts more than actual research. There is little to no investment in the invention, beyond the cost of writing and filing the patent. And often no desire to ever market the “invention”. But rather they are using patents to prevent other companies from entering related or leveraged market spaces or developing competing technologies. Patents are being used to stifle innovation rather than promote it. Once another company introduces a product which steps on the patent, the patent holder waits until the company achieves some modicum of success. Then they go after the company to extort license fees from them or to shut them down.

Further, there are companies out there who exist just as teams of lawyers who have bought up patent rights from companies which the originator no longer found valuable. Then they roam the marketplace looking for companies they can sue for possible patent violation. This is what happened to Blackberry and Palm. The companies were attacked by freelance lawyers with patent rights the lawyers had purchased expressly for the purpose of extorting money out of PDA providers.

In the case of Verizon vs. Vonage, Vonage was the company who brought VoIP phone service mainstream in the US. Verizon is a relative latecomer to the game. And honestly would never have entered the market had companies like Vonage, Comcast, and Time Warner not made VoIP a commercial success. Verizon was much happier with traditional phone service as it was able to command much larger margins. But now that their core business is threatened, they are trying to sue the competition out of business. If they are successful with Vonage, expect other companies to be targeted next.

It’s not remotely clear how this is good for industry or innovation as a whole. It’s clear to me that patent law needs major reform in this country. Perhaps some sort of use it or lose it clause that prevents a company from just amassing “preventative patents”. If the company cannot show an ongoing effort to commercialize a patent, then they cannot assert patent violation. I’m sure there are more creative solutions than this, but something has to be done to get the country back on the path to innovation. We can’t just sue each other into success.