Saturday, February 4, 2012

Tin-can telephones and Apple's Patent Paradox

From Jon Kolger:
Acoustic telephones or 'string' telephones as they are often called, are misunderstood by many collectors. Since they transmit sound purely by mechanical means, they embody none of the pioneering electrical innovations that many collectors find so interesting. Truthfully though, very early telephones performed poorly; and during these years, the acoustic telephone represented a truly viable alternative for relatively short, private-line telephone systems.

Since they contained no electrical transmitting or receiving devices, they did not infringe on the Bell patents. Thus they were able to enter the telephone industry during the protected years of the late 1870s and 1880s, carving out a small niche for themselves.
The Smithson website has a page on one of these phones:
In a trade catalog entitled Holcomb’s Improved Amplifying Telephone Illustrated Descriptive Circular, the telephone was described as “unquestionably one of the most marvelous and useful inventions of the nineteenth century.”

Holcomb’s mechanical telephones used galvanized steel cable-wire to transmit voice communications over distances of two miles. They were designed to meet the needs of businesses and “enable the busy man to save valuable time, to avoid vexatious delays, and to direct from his office the operations of employees at manufactory, mill, office, depot, or store . . . ”
I was reminded of these phones while I was working on a post about Apple. (If you write about Ddulites, you have to do a post on Apple sooner or later.) It struck me that the lag time between Apple and Apple imitators is remarkably brief. Bell's patents kept competitors at bay for long enough for alternatives like mechanical phones to get a foothold (albeit a small one). I also heard that part of the reason that the film industry moved west (first to Chicago, then to LA) was to put some distance between it and Edison's lawyers.

Patent enforcement has never been stronger (take the 101 north and you'll find the woods lousy with patent attorneys). Patents have never been issued so easily. You might expect competitors to wait years to make a media player or a smart phone, but Apple's patents don't seem to buy them any time at all.

I know we have some technologically astute people in the audience who could explain this but, in the meantime, here are a couple of theories.

The first is the obvious one. Apple, at least the Apple off the past few years, is more of a leading edge company than a cutting edge one. The strategy seems to be to make the best products they can using existing technology rather than focusing on actually developing new technology, and it's hard (though not impossible) to effectively build a wall of patents around existing technology.

The second is less obvious (and coherent) and it may apply better to companies other than Apple, but here goes: When everyone has patents, no one has patents. There are so many patents making such broad (and often overlapping) claims that no one can actually make anything without infringing on something. Though there has always been a market in patents (Edison established Menlo Park with money he got from selling his Quadruplex telegraph to Western Union), there was still a strong relationship between creation and patent application (Edison didn't just patent the idea of sending multiple signals over a single wire) and more often than not the company that held the patents made the product.

That relationship has apparently broken down. These days I suspect that most of those patents that aren't held for extortion are purchased defensively -- Google buys patents because they contain good ideas but as protection against patent trolls. In this system, patents don't do anything to protect the people who actually come up with valuable ideas (anything specific enough to be of value will infringe on someone's sweeping patent). Instead, the system insures that only those with pockets deep enough to buy off the trolls will be able to play.

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