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What Apple's and Microsoft's patent threats mean for start-ups

Given the likelihood that everyone violates the patents of everyone else, patent collectives like OIN may be critical to protecting the interests of start-ups against larger players.

Perhaps retirement doesn't suit former Sun Microsystems CEO Jonathan Schwartz.

Just weeks into his post-Sun life, Schwartz offers some delicious anecdotes in a blog post, summarizing Apple's and Microsoft's threats to sue Sun for patent infringement as more about bluster than substance.

But that's not the lesson I learn from Schwartz's commentary.

Instead, what is immediately obvious to me is that a) the technology industry is a morass of conflicting patent claims, b) since there's really no way to completely avoid others' patents the best defense is to have a hefty counterbalancing patent portfolio of one's own, and c) thus, only big companies can truly compete in a trigger-happy, patent-wielding marketplace.

Guess what? This rules out virtually all new entrants to a market, including companies like Facebook that not-so-long-ago were start-ups. But it may fall particularly hard on open-source projects and companies, which typically eschew patents.

When Apple came calling to threaten Sun with a user-interface design patent lawsuit, and when Microsoft asked to smoke the peace pipe over OpenOffice (at the "small" price of a royalty on every copy of OpenOffice downloaded, as Schwartz read it), Sun had a compelling response: it's possible that we violate your patents, but have you looked into your own trampling on Sun's IP?

It's a good argument, if a depressing one. Depressing, because it's the kind of argument that only big companies can make since often they're the ones with more patents than sense.

The Open Invention Network and other patent collectives have sought to level the playing field by buying up patents to be held for the defense of their members, and they offer a good start. But it's just a start, and it costs quite a bit to participate fully with them. (This makes sense, given how much money such collectives must spend to buy the patents in the first place.)

Whatever the cost, this may be the only refuge for start-ups and others, like Red Hat, that don't have an aggressive patent-acquisition policy.

As I said, the technology industry is a quagmire of conflicting patent claims. For example, it's as certain that Microsoft violates Linux-related patents as it is that Linux violates Microsoft patents. The industry is simply too messy for it to be otherwise.

We need better, more comprehensive ways for smaller companies to be able to compete in this market without the fear of running afoul of some big company's patent portfolio. It's great that companies like IBM have been pledging patents for the protection of its preferred open-source projects (like Linux), but we need more than charity in order to offer start-ups--open source or otherwise--"Sun-like" protection from the patent extortion racket.

At some point, the interests of open source-friendly IBM or Oracle will conflict with a start-up or project, just as has happened with Microsoft, and then big brother the protector will become Big Brother the tormentor.

Perhaps it's time we focus our collective efforts on a single patent collective like Open Invention Network, an organization that becomes the equal of a Microsoft in a patent feud? As in the insurance industry, the premium should come down as more participants join in.

Other ideas?