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August 31, 2011

State of Techology Patent Wars:Winners and Loosers

The graphic above, showing a sampling of these lawsuits, can be almost dizzying to look at and decipher. Within the last year, for example, Apple was sued by the Taiwanese company Elan Microelectronics over alleged infringement of touch-screen patents. Kodak sued several companies over patents related to its digital-imaging technology. And on Wednesday, Apple sued HTC, the Taiwanese handset maker.
Although patent litigation is not new in the technology world, these suits, specifically around mobile, point to the drastically changing mobile landscape.  As mobile technology was still in its infancy and these large computing companies were trying to stake their claim to the future of computing.

However some industry  observers are of the opinion that More tech jobs will disappear as the money goes to patents, and not innovation.

"The lunatic expenditure of money on patents brings to mind Hewlett-Packard's expenditure of billions on the acquisition of Compaq, a failed, ego-driven venture that resulted in the loss of about 20,000 jobs in the combined companies, and many more in the tech and non-tech ecosystems surrounding them. However, it managed to enrich the biggest shareholders and those same investment bankers"

The broken patent system is destroying value and replacing innovation with fear-driven acquisitions. The Icahns of the world will get rich as this continues, but too many others will simply get the shaft.

The Technology Patent wars is  often compared with an arms race in the technology industry, with patents playing the role of ICBMs. "Patents are emerging as a new currency,"
according to Alexander I Poltorak, chief executive of the patent licensing and enforcement firm General Patent The same article at nytimes notes that other companies with large patent portfolios could be the next to go, including Alcatel-Lucent, Kodak, Research in Motion, and Nokia. That notion makes even more sense when you notice that shares of struggling RIM have bounced up about 10 percent this week, a move that likely indicates investors view it as a takeover target.