IP Bubble Raises the Lawyer-to- Engineer Ratio

By John Blyler, Editorial Director

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The high-stakes game of IP acquisition has some observers wondering if the lawyer-to-engineer ratio has reached a new high. That would be bad news for an economy based on innovation. It is being called a “Patent Bubble.” Large individual companies and conglomerates are buying up major amounts of patents and semiconductor intellectual property. The latest so-called “mind” grab has been Google’s recent acquisition of more than 1,000 patents from IBM. Google’s actions follow in the wake of a Google-Intel failed bid to acquire Nortel Network’s patents. The winning bid was submitted by a Microsoft- and Apple-led consortium. (See, “What is the Freshness Date on Nortel’s IP Patents?)

It used to be that strategic acquisition of patents – including semiconductor IP – enabled technology innovation in new areas. But today, many argue that patent acquisition is merely a protective move against growing corporate litigation. Apparently, IP is considered the best defense against ever-increasing patent trolls.

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The problem seems to be two-fold. First, many patents are vaguely written. Second, politicians seem to believe that patent generation is a key measure (or even source) of job-creating innovation. This type of reasoning may explain why they become politicians instead of engineers.

Cartoonist Scott Adams recently blogged about the lawyer-to-engineer ratio, suggesting that this ratio was the best indicator of the long-term economic health of a country. I agree. Engineers create, while lawyers (at best) protect. At worst, the latter creates a hostile environment for creating new products. The lower the L-to-E ratio, then the greater the probability of innovation. A higher L-to-E ratio means an increased risk of litigation.

In these economic times, it’s easy to do the math – unless you’re a politician.

 


John Blyler can be reached at: jblyler@extensionmedia.com