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Intervention by Denise Caruso Read Intervention by Denise Caruso, Executive Director of the Hybrid Vigor Silver Award Winner, 2007 Independent Publisher Book Awards; Best Business Books 2007, Strategy+Business Magazine

SCARE TACTICS ABOUT INTANGIBLES

by ~ November 13, 2008.
Permalink | Filed under: Hybrid Vigor, Policy and Decisions, Valuing Intangibles.

I recently a story about software patents so goofy (to me, anyhow — YMMV) that I had to share it.The story was from the IT Examiner, titled, “US throws out most software patents.”

The hook was a decision by the US Court of Appeals for the Federal Circuit in Washington DC. Instead of automatically granting a patent for a business practice, the court decided there would be a specific testing procedure to determine how patentable is the process in question.

As the story put it, this is “a nearly complete reversal” of a judgment of 1998, which started the stampede for patenting business practices.
All I can say is, About damn time! Here’s the link to my extremely cranky New York Times column on this very same subject, written in 1999.

So here’s the goofy bit: The reporter wrote,

The decision is great for open source advocates. But it could mean a permanent change in the value of intangible assets, which comprise approximately 70 per cent of the average high-tech company’s market capitalisation. With the world’s economy sliding downhill at an increasing pace each day, this decision could cost US companies billions of dollars.

Oh, please. First of all, patents comprise only a fraction of that “70 percent” value for intangibles, and business practice patents are only a fraction of those.

And second, those patents should never have been granted in the first place, and everybody knew it. During the dot-boom before the dot-bomb, anybody could do pretty much anything they wanted for the ka-ching, and that was one of the most ridiculous of them.

But I’ll give the reporter credit. Even if the patent/intangible thing was a little off, he found a nameless Silicon Valley executive who saw “a silver lining” to the decision: Companies will save a lot of money on legal fees (I’d say legal departments) by not needing to ceaselessly file, license and defend patents so basic that the bureaucracy to maintain them equals or exceeds the money they bring in the door.

Patents are gumming up the works in more places than the software industry, and I’ll be writing more about this in the next few weeks, in the context of biomedical and environmental research in particular. In the meantime, I wouldn’t worry too much about the software industry in this regard. Some companies will probably even find some upside in all the downturn.

2 Responses to SCARE TACTICS ABOUT INTANGIBLES

  1. Scare Tactics on Intangible Value | IC Knowledge Center

    […] Last week, I reported on a U.S. decision that limits patents on business processes here. While many people have been bemoaning this development, Denise Caruso has had a very level-headed response (latest post here). She rightly asserts that there is an over-emphasis on patents in the U.S. that has wasted time and money as well as distracting people from the full set of intangibles, of which patents are just the tip of the iceberg. Focusing on building an organization around the business process, scaling it and supporting it with the right internal human capital and external network capital are much more important-and promise a much greater return over time. Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages. […]

  2. Patenting Business Processes (and in general) « Crossderry Blog

    […] Hat tip to Mary Adams (here) for pointing out that recent court rulings are tightening up the granting of such patents, at least.  She links to good posts on the topic here and here. […]

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