August 25, 2011
According to a number of venture capitalists the growing number of patent battles is harming the chances of new businesses starting up in areas of technology.
The issue of patents has been brought to public attention following Google’s high profile takeover of Motorola’s mobile phone business. It is clear that the motivation from Google for the takeover was to acquire Motorola’s patents. On Monday, Larry Page, Google’s chief executive said that the patents would “enable us to better protect Android from anti-competitive threats".
Whilst companies such as Google can strengthen their position with the acquisition of patents it is very difficult for new companies to enter the market. Nic Brisbourne a partner of the venture capital company DFJ Esprit commented that: "It is really hard for small companies to figure out which patents exist in their field," Mr Brisbourne added: "And many are really broad. It has become a cost of doing business." With the growing number of patents and the more aggressive approach which is being taken by many of the big technology companies such as Google and Apple, it has become an increasingly difficult market to enter. The cost of breaching a patent can be substantial and it is this fear which is putting off a lot of small businesses. Mr Brisbourne believes that patent offices “should be more restrictive in granting permits”.
There is however an argument for the benefits of patents to small businesses. Mark Kenrick a partner at the intellectual property law firm Marks amp; Clerk said that patents can be a useful tool to protect small businesses and pointed out that: "While getting their own patents aren't cheap, they can prove an effective insurance policy to protect themselves against other companies."
