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People often ask me how many patents Marki Microwave owns. The answer: zero. “What? But you’re a technology company, how can this be? Aren’t you worried that someone is going to steal your idea?” Well, not really, and I will try to explain the logic behind this position. Some will read this and disagree, I have no doubt. I actually think patents do have important benefits given the right set of circumstances, but I think for small tech companies like Marki Microwave, patents do not provide as many benefits as is often assumed. I believe it is false to assume that a good idea should always be patented, here’s why…
1. Patents create a false sense of security. In general, I’m opposed to people trying to lay claim to scientific discoveries and innovation. I know many engineers who spend most of there time writing patents, re-writing patents, and conceiving of ways to get around other’s patents. To me, this is a sub-optimal strategy for success. There is a difference between “patent competition” and “technological competition”. Patent competition is the act of performing a metaphorical patent land-grab, this is not necessarily useful for the greater good of society. Technological competition, however, is supremely good for society and the economy. Most people are motivated by adversity. Therefore, when you have a technological competitor, regardless of whether they own a patent or not, you are forced to innovate beyond your current means. The patent owner, however, might be tempted to believe he is safe from copy-cat technologies. I believe this complacency is a very dangerous mindset to have in a competitive marketplace. You can’t control whether your competitor will leap-frog your technology and render your patent useless. No technology company can survive forever without constantly improving their “wheel”, a patent does not provide us reprieve from this fundamental Truth.
2. Trade secrets are more important than patents. I love when my competition writes patents because they give me insights into the thought process of the inventor. I have read several patents that were so novel in their approach that they actually triggered new ideas for me, which I subsequently used for my own applications. Did I violate the patent? No. In fact, my idea was for something totally different. However, the patent described the technical details in such a way that served as a sort of creative inspiration. Had the inventor never written the patent, I doubt I would have come up with the same idea in such a short amount of time. I believe that trade secrets are more powerful than patents because they foster many more questions than answers for the competition. If you are a small tech firm, it is perhaps more valuable to develop your “secret sauce” in private and let your competitors try to reverse engineer your product later. In my area of hardware, the money is in the packaging details. In other words, I can give a Marki mixer to a competitor, but they still might not be able to copy it due to the fabrication complexity and assembly subtleties. However, if I write the patent and describe the function and detailed embodiment of the design, then they are more likely to understand the meaning behind my design choices. This is dangerous, and the single biggest reason Marki does not write patents for mixers.
3. Would you really sue over patent infringement? The best argument I have ever heard for why a small company should own a patent is that it gives you a legal precedence to continue to sell your product. In other words, you don’t patent something so you can sue someone when they violate it, you patent something so they can’t sue you when they try to steal your idea by patenting it themselves. It is backwards logic, but it makes sense. Moreover, how many small companies have the financial power to litigate potential patent infringement? Not many. Even the most air-tight patent can be circumvented with a few clever strokes of the pen, or an equally intimidating legal department.
4. A patent is NOT a product. I know many brilliant engineers who believe that if they patent all their ideas, that they will eventually become rich. In some sense, they treat their patents like lottery tickets; if they hold enough tickets, eventually their number will be called. Ultimately, the end game is to sell their ideas and corresponding IP for a huge lump sum and retire happy. I have found that many smart scientists use this strategy when they form start-up companies. Many of the tech start-ups I’ve dealt with in my career have a business plan that looks something like this: have a great idea, acquire funding either through venture capital or DOD, develop an IP portfolio, sell company to highest bidder and cash out. In other words, the product of the company is…the company! I don’t believe this is a good or bad thing, I simply believe that it is strategy with a low probability of success. Maybe I’m old fashioned, but a company makes money by providing goods and services to their customers, not by acquiring IP that may or may not be useful some day. There is a reason that tech start-up companies are so risky, and I think worshipping patents as false products adds to this risk. Of course, there are many famous companies who have successfully made the transition from start-up to juggernaut, but this tends to be the exception, not the rule. We can’t all be Google or Intuitive Surgical, so should we all try to be?
Google is an interesting example actually. The most valuable asset in all of Google is their search algorithm, and specifically the relevance calculator. While it is true that the “PageRank” concept is a licensed patent from Stanford, the actual weighting of the various search factors are secret. Marketing people make entire careers out of trying to optimize websites to fit Google’s algorithm, but no one knows with absolute certainty how it determines rank…this is a fantastic trade secret indeed! If someone could figure out how to decrypt the Google search algorithm with quantitative accuracy, I suspect they would be rich beyond words, maybe I should write a patent…