Patents, Mo Money: Making money by licensing patents
As you can tell
by reading the news and this website, there is a new way to make
money. Forget about making a product that people will buy and use.
Forget about inventing gadgets and devices that cause consumers
to flock to you. Forget about starting a dot-com business and trying
to be execute on a business plan.
The way to make
money nowadays is to buy patents or to file patents for all kinds
of ideas, and then later, license the patent to other companies.
For those that
remember the Unisys/GIF issue of having to license the GIF patent,
there is a small sigh of relief that the patent just expired! But
as you recall, Unisys came out of dormancy by requiring software
manufacturers to license the GIF image format. GIF images were so
widely used by website and graphic programs that the whole computer
industry was up in arms.
A company down
in Austin, Texas is now coming back for the Unisys/GIF sequel and
claiming the patent to JPEG! They are taking the right approach
towards patent enforcement/licensing.. target businesses that MAKE
PRODUCTS that utilize the patents.
If Forgent had
followed Acacia's strategy, they would be suing every website that
had JPEG images on them. This author believes that Acacia should
have FIRST targeted companies like Real Networks and Microsoft for
producing the technology that they felt violated their patents.
If they really did own the patent to streaming/downloading audio,
then let the big businesses (who are profitable) deal with the licensing
issues. They in turn would end up passing down costs to the consumers.
which..... Do you know how much money a DVD manufacturer has to
pay for MPEG, Dolby, and DVD licensing to make a DVD player? The
answer is about $20 per machine. This article details the licensing
fees and how China is producing DVD players WITHOUT paying for licenses (bad Chinese manufacturers, bad).
The cost of
licensing a patent gets passed onto the consumers eventually. So
with these kinds of licensing fees, and despite mass purchases by
Walmart, we'll probably never see a $20 DVD player.
Patents that don't have any prior art to invalidate them, are good patents. So while it does mean that products cost more due to paying for a patent license, it is the patent holder's right to profit from their inventions.
So if you are
up late at night and watching TV, and you see those ads for patenting
your invention/idea, maybe you might pay more attention to them
now. Who knows, you may have some crazy idea today, that technologically
speaking can't be created, but wait about 5-10 years and maybe it
will. And by then, you'll be able to start suing companies and licensing
You don't even need to have a good patent, just interpret a patent to mean more than it really represents.
You don't need
a business plan or investors! Just come up with crazy ideas, file
the patents, and wait for technology and people to start using your
idea. This is the new, new, new, new, new, new economy.