I frequently see articles about Silicon Valley companies suing each other or purchasing patents seeking market share in mobile computing. It is difficult to keep track of all of it. I guess that's understandable given patent infringement lawsuits relating to mobile phones have increased 25% yearly since 2006. Source https://lexmachina.com
In The Gorilla Game, Geoffrey Moore stated successful high-tech investors must identify and invest in
the companies that would catapult to "gorilla" status, dominating their market. He
discusses many factors that lead to gorilla status, but not so much about
patents. That book seems a little dated for that reason.
Today, tech companies believe patents play a major role in getting or protecting market share. Thus, we have Apple and others' patent infringement suits around the globe, and Apple and Microsoft's $4.5B purchase of the Nortel patents and Google's $12.5B purchase of Motorola Mobility, etc.
What can be learned from the browser wars that might apply to the mobile computing today?
1. Owning an unpatented market share of something valuable is vulnerable. Netscape gained dominant market share, but the basic technology was in the public domain.
2. Big money will attract gorillas. If you're close to a gorilla, the basic technology must be protected with patents. If it cannot, expect to lose market share (some or all) to the gorilla, i.e., the bananas will be grabbed.
3. As long as the basic technology is unpatented, market share can shift rapidly. Netscape's gorilla-like market share disappeared rapidly, that is, basically faster than Netscape could adjust.
4. If no one has patented the basic technology or control of the basic patents is distributed among companies, it is difficult to envision the market share shifting based on patents. Eventually the companies must license each other's patents and the market divides up.
5. Identitying and patenting basic technology is crucial. If you cannot, you should identify a niche that will not attract a foraging gorilla.
Copyright © 2011 Robert Moll. All rights reserved.