Mike Masnick warns that the future of VoIP is in jeopardy:
You have to wonder how many times fans of the patent system have to repeat the mantra that “patents encourage innovation” before they can actually believe it. There continues to be new evidence on nearly a daily basis of patents doing the exact opposite that it’s hard to believe the patent system retains as many supporters as it does. The latest is that a ton of patent holders are preparing to sue over various VoIP-related patents, following the news of Verizon’s big win over Vonage for VoIP patents. The problem, of course, is that tons of companies (some big, some small) all claim patents on various aspects of VoIP — creating the very definition of the “patent thicket.” That is, there are so many patents around the very concept of VoIP that no one company can actually afford to offer a VoIP service, since the cost to license all the patents is simply too prohibitive. Expect plenty more lawsuits in the near future as this all comes out in court. The big players will use their patents to keep out competition, and the small players will use the patents to try to create an NTP-style lottery ticket. The lawyers will all win — but consumers who just want to use VoIP will lose big time. What’s wrong with letting companies simply compete in the marketplace and letting the natural forces of competition encourage innovation? Instead, we get patent holders trying to hold back competition and hold back innovation.
I think critics of the patent system need to be careful about over-stating our case. I don’t think software patents will destroy the VoIP industry. Rather, they will serve as a steady drag on the industry, raising the cost of doing business and forcing innovative upstarts to spend their money hiring lawyers rather than engineers. This will, in turn, tilt the playing field to Verizon’s benefit.
Most likely the result will be that small, entrepreneurial firms will be squeezed out of the market, leaving a bifurcated market between large, deep-pocketed incumbents on the one hand, and decentralized open source projects and overseas firms on the other. Tech-savvy Americans will have no trouble finding and installing innovative VoIP solutions, but for the vast bulk of Americans, they’ll have to use whatever Verizon and other patent-heavy firms choose to dish out. (It’s an interesting question what will happen to firms like Skype, Apple, AOL, and Google that offer “pure Internet” voice calling and have not, to date, made a significant dent on the telephone market)
What this case makes crystal clear is that there’s no appreciable connection between which innovating and getting patents. No one would argue that Verizon has been more innovative than Vonage in the VoIP market, yet because Verizon has spent more money filling for patents in recent years, Vonage is placed in the ridiculous position of paying Verizon for the privilege of using Verizon’s “inventions.”
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