We have been pondering the current debate on open technology and the relaxing of the rules regarding intellectual property protection. It throws up some issues that appear to present a Catch 22 type problem. The argument is that current IP protection i.e. patents stifles innovation and encourages monopoly power. The issue was thrown into stark relief by the recent Samsung Apple court battle. Apple was awarded initially $1.2 billion for infringements and Apple is now seeking a further $707 million.  Apple is seeking a permanent ban on 26 Samsung smartphones and tablets. Samsung has responded by seeking a new trial. As a report by Reuters has stated, Samsung said in its filing to the U.S. court; “It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies.”

On one level it is clearly absurd that Apple should be able to act as a road block further developments of existing technology and be able to patent a simple shape. On the other hand as investors we are seeking IP as a form of competitive advantage.  There can be a clear conflict between IP protection and the wider good. As ever the answer lies in a more sensible application of the law. The key question is:  when is it a matter of standing on the shoulders of innovation and when is it theft? We all use and incorporate  previous technology – if we didn’t then we would still be living in caves.  That is not the same as stealing ideas and directly exploiting them without adding innovation.

By Richard Turner