Copying Innovation is Hard

by on January 16, 2007 · 46 comments

Mike Masnick offers another example related to last week’s discussion of whether patents are needed to protect software innovations:

Microsoft has long viewed Google as a serious competitor, and apparently Bill Gates and the folks in Redmond have been pulling out all the stops to compete with Google. In many cases, they’ve created products that seem as good, if not better, than Google’s versions. Yet, despite all of that, they’re losing traffic while Google gains it. Once again, it’s not just about the technology, but the perceived view people have of Google as compared to Microsoft. Microsoft just hasn’t been able to convince that many people that its search and mapping solutions are as good or better than Google’s. Despite the claim that there are “no switching costs” for users to go elsewhere, that’s not quite true. The perception that Google is better (and the feeling that it’s “good enough”) means that there’s no reason for people to look elsewhere, and a Microsoft offering would need to be not just better, but significantly better to attract attention. Alternatively, they can work on increasing their brand value as well, in the space of online services. In other words, there are plenty of things that go into being able to innovate and build a successful product–and simply copying someone else’s technology is often a small part of that (and usually not a particularly good strategy). Patent protection only protects that aspect of copying (business model patents are another issue completely), but if they’re supposed to encourage innovation, and the technology is only a small part of innovation, then the incentives are mis-aligned. The market can reward innovation without needing government monopolies and protectionist policies. The trick is to continually innovate, not just in the technology, but in the quality, the service and the brand as well.

Quite so. It needs to be stressed that the goal of patent law is to provide sufficient incentive to “promote the progress of science and the useful arts,” not to maximize the profits of innovators. Clearly, Google has been able to turn a tidy profit (to put it mildly) from its search engine without any significant recourse to patent law. Even after five years, one of the wealthiest companies on the planet has apparently not been able to produce a search engine that consumers perceive as being equivalent to Google’s offering. This suggests, I think, that a software innovator retains significant market advantages even after competitors have succeeded in cloning the major features of its product. And that, in turn, casts serious doubt on the notion that innovative products like the iPhone or Google wouldn’t exist but for the patent system.

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