Why Patents are Like Black Holes

When a big enough star dies, it generally implodes, and forms a voracious black hole capable of swallowing anything that comes too close. When a big enough company dies, all that remains is a bunch of patents that can have a similarly negative effect on companies whose business models are too close.

He's Mike Masnick's commentary on the area:

It looks like just about all that's left of former telco equipment giant Nortel is a whole bunch of patents, that are now expected to sell for somewhere in the range of $1.1 billion. The big question, of course, is who ends up with those patents, and what they do with them. Generally speaking, you don't see companies spend $1.1 billion on a bunch of patents, unless they're planning something big. It's entirely possible someone will buy them for defensive purposes, but equally likely that they're used to sue lots of other companies (or, perhaps by the likes of Intellectual Ventures, to scare people into paying up to avoid the possibility of being sued).

And of course, in the field of open source, the really worrying dying star is Novell, as Matt Asay points out:

As reported, as many as 20 organizations have registered bids for Novell, most (or all) of them private equity firms. While an Oracle or a Cisco might acquire Novell for its maintenance streams and product portfolio, it's unclear that private equity firms will have the same motivation. For at least some of these, there will be serious pressure to sell Novell's assets to the highest bidder, regardless of the consequences to Novell's existing customers or to the wider industry.

This wouldn't be so bad if it weren't for the fact that Novell has a treasure trove of patents, with at least 450 patents related to networking, office productivity applications, identity management, and more.

Worth noting is that among those patents are some relating to Unix...

These cases show yet again why patents just don't do what they are supposed to - encourage innovation - but act as very serious threats to other companies that *are* innovating. As more and more of these software stars die, so the number of patent black holes will increase, and with them the unworkability of the patent system. Time to reboot that particular universe...

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