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Google Open Source Patents Technology

Google's Schmidt: Patent Wars Harm Startups 82

Posted by Unknown Lamer
from the not-that-he's-complaining dept.
Nerval's Lobster writes "Former Google CEO Eric Schmidt opened up to The Wall Street Journal in a Dec. 4 interview. Among the topics covered: the status of his company's ongoing patent war with Apple, as well as its attempts to make the Android mobile operating system more of a revenue giant. In Schmidt's mind, startups have the most to lose in the current patent wars: 'There's a young [Android co-founder] Andy Rubin trying to form a new version of Danger [the smartphone company Mr. Rubin co-founded before Android]. How is he or she going to be able to get the patent coverage necessary to offer version one of their product? That's the real consequence of this.'"
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Google's Schmidt: Patent Wars Harm Startups

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  • Funny (Score:3, Insightful)

    by WankerWeasel (875277) on Wednesday December 05, 2012 @12:38PM (#42192753)
    But buying up startups then killing their work doesn't?
    • Re:Funny (Score:5, Insightful)

      by metrometro (1092237) on Wednesday December 05, 2012 @12:41PM (#42192793)

      Actually, it doesn't. That's a powerful incentive to start companies and build products, even if the results get incorporated (or not) into a dreadnaught like Google after four years. Venture funding banks on this, and the freely flowing spigot of VC money built most of the stuff I currently use.

      • by Qzukk (229616)

        the freely flowing spigot of VC money built most of the stuff I currently use.

        Except that if you're using it, then it was probably not the result of a startup that was bought and killed.

        • Except that if you're using it, then it was probably not the result of a startup that was bought and killed.

          That VC money doesn't appear out of thin air. It often comes with the intention of the company being acquired, and was money previously invested in other companies that got acquired. It's all part of the ecosystem.

    • Re:Funny (Score:5, Insightful)

      by mr1911 (1942298) on Wednesday December 05, 2012 @12:42PM (#42192803)

      But buying up startups then killing their work doesn't?

      If startups can't get to version one, they have a tough time getting bought.

      There is no perfect answer, but I'd rather have my work killed after getting bought/paid rather than squashed by patent suits and losing my investment.

      • You're assuming the one being bought out is the startups founder, not the employees that get nothing more than laid off. Also your logic is that you'd rather have a partial lobotomy than a full. The lesser of two bad things. Why not have a good outcome rather than the lesser of two bad ones? For most it's not all abut the money. Seeing something you worked hard to build be taken and thrown in a bin never to see the light of day sucks. This thing you worked so hard on will never get the chance to show
        • by bhagwad (1426855)

          That will indeed suck. But I'll take the money nonetheless :)

        • For most it's not all abut the money. Seeing something you worked hard to build be taken and thrown in a bin never to see the light of day sucks. This thing you worked so hard on will never get the chance to show how awesome of an idea it really was.

          Isn't the obvious answer in that situation to not sell your business?

        • by erice (13380)

          You're assuming the one being bought out is the startups founder, not the employees that get nothing more than laid off.

          Also your logic is that you'd rather have a partial lobotomy than a full. The lesser of two bad things. Why not have a good outcome rather than the lesser of two bad ones? For most it's not all abut the money. Seeing something you worked hard to build be taken and thrown in a bin never to see the light of day sucks. This thing you worked so hard on will never get the chance to show how awesome of an idea it really was.

          If startups are getting bought than at least there is a decent chance of getting a job at another startup and "successful" startup experience (even if borged and crushed) is better resume fodder than a stint at a startup that quietly disappeared. If startups are not being bought than pretty soon they won't be any funded and you will have no choice but to work for a large company, even you even have that option. (Big companies aren't usually impressed by experience at startups that have never heard of and d

      • by Anonymous Coward

        Well, fuck startups then. Because that's what the money system dictates us.

      • by tnk1 (899206)

        I understand that this might harm potential investment, but do these patent wars actually affect objects that are on their first version, unless they are very highly hyped before production? Did anyone actually consider the iPod to be a threat before it took off? I usually hear about patent suits nailing people who have made a good run at actually competing with some patent holder in the actual marketplace. By that point, you could easily have been bought out by someone bigger, which is pretty much the w

      • by McFadden (809368)
        Although, let's be honest, a lot of patent trolls would be content to wait until the startup is acquired because they'd much rather go after the deep pocketed corporation that buys it.
    • Re:Funny (Score:5, Interesting)

      by Shoten (260439) on Wednesday December 05, 2012 @12:45PM (#42192843)

      But buying up startups then killing their work doesn't?

      Arguably, no. Why do I say this? Because of two reasons:

      One...the fact that the startup got bought out provides incentive for other startups to form. Let's face it...being bought out by Google is a payday. It almost always means you've hit some kind of success, and as a result you are being paid well for the company. Failed startups that are bought as they lay on their death bed are never bought by companies like Google, but rather other smaller companies who want some minor aspect of what the startup still contains.

      Two...the fact that the people who started the first startup are now (after a year or so) free to start a new one. And they're MORE able to do so, because they have the experience they gained the first time around, the track record of having done it successfully before (VC's get their part of that buy-out payday too), and their own inherent financial stability now so that they don't have to worry about putting food on their table or paying the rent while they get the next venture up and running. They've made connections, made mistakes, and learned a lot along the way. I know several people who have done multiple startups, and they've all seen their original creation changed in some major way by the company that bought them out, but meh...they go on, and create something new.

      • You're looking at a startup as a single person or partners that share the pay from the buyout. What about the people that worked tirelessly at the small company but may not get a cut in the cash? You're also believing that the #1 motivator for everyone is money. Many would like to see their baby grow and see the impact it can make on the world. Invent a cure for cancer, take the payoff and walk away without ever getting to see how it changes the world.
        • Re:Funny (Score:5, Insightful)

          by maeglin (23145) on Wednesday December 05, 2012 @01:15PM (#42193211)

          You're looking at a startup as a single person or partners that share the pay from the buyout. What about the people that worked tirelessly at the small company but may not get a cut in the cash?

          You're also believing that the #1 motivator for everyone is money. Many would like to see their baby grow and see the impact it can make on the world. Invent a cure for cancer, take the payoff and walk away without ever getting to see how it changes the world.

          What about the people who worked tirelessly for RIM, Nokia, Diamond, Pets.com, Silicon Graphics (the real version), the HP calculator team, Commodore / Amiga, SEGA and Atari (again, the real version)? Who was or is looking out for them? Absolutely no one. At least if a founder gets bought out some jobs will transfer, some will move on to the next start-up with the same guy and the rest simply share the same fate as countless people who have poured their souls into ventures of many sizes and then have been left with nothing but a final paycheck.

          One of many reasons that older employees don't constantly invest 18 hours a day for an 8 hour paycheck is because they have seen the result of not being an equity holder of the effort when the payday comes. If you're working a job as a wage earner and you think the 2 year "sprint" is going to pay off -- think again.

          If you don't want to sell your baby.. Don't.

        • If you're talking about "harm to startups", you implicitly are already talking about the owner(s), rather than the employees, as they are the one(s) with the above-average stake in it. And really, if you are an employee only with no ownership of the company, you never had an expectation that you'd get a cut in the cash, regardless of what happened, unless you were working at one of the very rare companies which split the profits with employees (and I mean a real cut, not a nominal pittance). And if you are

    • by Anonymous Coward

      Selling out is a choice, getting sued to death isn't.

    • Re:Funny (Score:5, Insightful)

      by yog (19073) * on Wednesday December 05, 2012 @12:56PM (#42192999) Homepage Journal

      Patents are definitely a big problem for start-ups. When you are big enough to have a Legal Department with an Intellectual Property specialist or three, you can maybe deal with all the patent trolls out there not to mention the few legitimate patents that may challenge your product.

      But for the rest of us, it's an almost insurmountable challenge. Once when I was trying to develop a voicemail contraction (yeah this was sort of pre-cell phone and pre-Google Voice and all that nice stuff we have today) for small offices, I was astounded by the kinds of patents out there. Some guy patented a "method to push a button to record a voice". Someone else patented a "method to store voice recordings in digital format in computer memory". Was I as a one person start-up going to have to find a way around ridiculously obvious patents like this?

      So if someone big comes along and offers you a million or two for your baby company, it's going to be awfully tempting. Then again, as I recall, Microsoft offered the Netscape guys about $20 million for their browser back in the early Web days. They politely declined and went on to be worth hundreds of millions. It's a tough call to make, but you do have to be a bit of a gambler if you want to really make it big.

  • by Anonymous Coward

    to hurt startups so there's no competition!

  • by Qzukk (229616) on Wednesday December 05, 2012 @12:45PM (#42192845) Journal

    You get the patent coverage by releasing version one and paying off whoever sues you.

    • by tepples (727027)
      So what should one do if the patent holders combined demand more than the product's MSRP, especially considering treble damages and attorney's fees?
      • By then you've skimmed the profit and you declare bankruptcy. Just remember to file any patents you created as personal ones during the process, so that the shell of your startup is devoid of any value except the foosball table and the aeron chairs.

  • Especially... (Score:2, Interesting)

    by PortHaven (242123)

    When patents are given for things as basic as rounded corners, or actions that have been around for decades, or grids of icons like my old Palm Pilot from the 90's.

  • by tuppe666 (904118) on Wednesday December 05, 2012 @01:13PM (#42193195)

    This is the link to the interview http://online.wsj.com/article_email/SB10001424127887323717004578159481472653460-lMyQjAxMTAyMDAwNDEwNDQyWj.html [wsj.com] or maybe it only shows a summery depending who you are. I personally interpreted the article completely different; My summery would have been "Irrelevant Microsoft", but it touches on issues such as the antitrust case; owing a phone hardware company while expecting others to use your OS; The issue of Goggles relationship with Apple [Where WSJ got its title] all worthwhile topics of discussion, but as I said the thing I derived from it was Microsoft not being part of the "Gang of Four", and its products not even worth commenting on.

  • by SuperCharlie (1068072) on Wednesday December 05, 2012 @01:19PM (#42193271)
    The argument for patents is to promote and protect inventions and provide the consumer with better products, etc. The problem is the system has been subverted with corporate money and closed the door to most who are not at the top of the food chain. The benefit to a patent should be an exclusive first to market incentive. It would seem a 5 year period should do this. Afterwards, the patent should become public domain for others to build on. This nonsense of never-ending patents as well as allowing patents for idiocy like styles or other non-substantive things is more evidence of the corporate takeover of the patent system. Five years. Thats long enough to get ahead if your intent is to do something with a patent. That doesnt necessarily mean you even have a product in five years, it means you have had a five year head start on anyone using that idea.

    But ya.. that and $5 might get me a cup of starbucks.
  • by Grand Facade (35180) on Wednesday December 05, 2012 @01:23PM (#42193331)

    Only the lawyers win......

    I chose the wrong profession!

    But I do sleep well.

  • by erice (13380) on Wednesday December 05, 2012 @02:20PM (#42194091) Homepage

    Semiconductor companies have long held massive patent portfolios. They crossed licensed the patents to each other so, for them, the problem that you couldn't build anything without stepping on somebody's patent wasn't big issue. But startups don't have such portfolios and would be simply be crushed. Cyrix and Nexgen wanted to build x86 compatible processors but Intel had patents critical for compatibility that could not be worked around. They tried having their chips manufactured by IBM, which had cross-licensing agreement but both eventually had to be borged into larger companies (AMD and National Semiconductor) in order to keep operating.

  • I disbanded a startup about five years ago that would have filled a niche that's still underserved in the current market (though tablets and smart TV's fill some of it). The issue was the inability to do the things we needed to do because of existing patents on the basic ideas we needed to use and we all agreed that there wasn't a way to do it without licensing all those needed patents, which we couldn't afford.

    This was extremely foolish. The correct course of action was to bring the product to market and

    • This is exactly right. Startups should generally move on with planned product and try to get a market going. Honestly, startups probably should not even read patents because having a read a patent and then infringing anyway comes with a worse penalty than unknowingly infringing on a patent.

      The startups can deal with the legal mess (patent licensing, etc) later if they manage to actually create / enter a market in any significant way. Honestly, the odds of a startup even getting on the radar of an establi
  • He's bought out the company that's been at the forefront of suining people over patents and clearly he's done nothing to change that. Google only cares about Google (and keeping your personal data). So anything he says is irrelevant until he can prove he means what he says.
  • Capitalism marks bug report as "NOTABUG WONTFIX".

    Committer adds comment "system works as designed."

    Caretaker marks bug closed.

  • In Schmidt's mind, startups have the most to lose in the current patent wars: How is he or she going to be able to get the patent coverage necessary to offer version one of their product?

    Anyone wanting to create a smartphone must have deep pocket investors. This has to be one of the most expensive products in the world to innovate in for not only the hardware reasons, but the infrastructure and connectivity software reasons. Andy Rubin going into the smartphone business again is either done with VC smart

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