Google made a plea to the Senate Judiciary Committee last week, a plea for permission to pilfer the patent portfolios of any company good enough to change the world. I was flabbergasted at the audacity, but when you get down to it, it’s in keeping with Google’s perpetual attitude that the world should be its oyster to do with as it pleases.
I call baloney! Here, let me illustrate that:
First, let’s look at the recent news. Google General Counsel Kent Walker sent a letter to the Senate Judiciary Committee arguing that proprietary technologies good enough to set the bar should be treated the same as standards-essential patents that go into creating interoperability standards.
From Mr. Walker’s letter, which was published by AllThingsD:
While collaborative [Standards Setting Organizations (SSOs)] play an important part in the overall standard setting system, and are particularly prominent in industries such as telecommunications, they are not the only source of standards. Indeed, many of the same interoperability benefits that the FTC and others have touted in the SSO context also occur when one firm publishes information about an otherwise proprietary standard and other firms then independently decide (whether by choice or of necessity) to make complementary investments to support that standard in their products. … Because proprietary or de facto standards can have just as important effects on consumer welfare, the Committee’s concern regarding the abuse of SEPs should encompass them as well.
In other words, Google is arguing that when a company invents something so good that the rest of the world has a hard time competing, those competitors should instead be free to copy that technology, perhaps with a tiny FRAND royalty in compensation.
Now, I wonder if that goes for Google’s own PageRank algorithm. That’s the formula that Google uses to rank webpages (the name is a play on CEO Larry Page’s last name and webpage). It’s the PageRank algorithm that thoroughly disrupted the online search industry and allowed Google to grab almost all of the online search search business in most of the world.
By Google’s own reasoning, the company should be forced to let competing search engines use PageRank to retool their own search engines to be more competitive. I have a feeling, though, that Google’s argument is only intended to apply to other companies’ “proprietary standards.”
But Wait, There’s More
Another sign of the company’s hypocrisy is the way its executives have decried the rise of closed platforms like Facebook. With Facebook, user information is hidden from search engines like Google, and that freaks Google out.
The company’s business is based on slurping up huge amounts of information, particularly information relating to we, the people. It slices, dices, and juliennes that information up to the point that Google chairman Eric Schmidt once bragged, “We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”
That’s great for Google and its shareholders, but guess what: I don’t want Google or any other company to know what I’m thinking, especially when they’re going to sell that information to the highest bidder and profit off of me.
Facebook and other Web-based platforms threaten those profits because they shut Google out. Of course, they’re doing the same thing Google is doing—slicing and dicing our information and selling it to the highest bidder—but Google chief Internet evangelist Vent Cerf warned the world that Facebook is going to become a walled garden and that this will somehow be bad.
Which is true, for Google. It will be bad. Google wants everything on the Internet to be free and open to it so that the company can profit from it.
Me? I don’t trust Facebook all that much at all, but I sure don’t see any benefit in allowing Google to pilfer my Facebook profile so the company can make a buck. Don’t worry, though. Eric Schmidt promised us that, “We are willing to get i[that Facebook data] one way or another, with or without deal.”
That’s good to know.
So back to this patent thing. Google makes the case that Apple—and make no mistake, because this letter to the Senate Judiciary Committee is aimed squarely and solely at Apple—has invented some great things, and that these things should be made available to its competitors.
Again, this would be great for Google, because Google wouldn’t have to invent stuff. It could just pilfer Apple’s portfolio in the name of interoperability.
But I call balderdash, and so did Apple. The iPhone maker sent its own letter to the Senate Judiciary Committee, saying:
The capabilities of an iPhone are categorically different from a conventional phone, and result from Apple’s ability to bring its traditional innovation in computing to the mobile market. Using an iPhone to take photos, manage a home-finance spreadsheet, play video games, or run countless other applications has nothing to do with standardized protocols. Apple spent billions in research and development to create the iPhone, and third party software developers have spent billions more to develop applications that run on it. The price of an iPhone reflects the value of these nonstandardized technologies — as well as the value of the aesthetic design of the iPhone, which also reflects immense study and development by Apple, and which is entirely unrelated to standards.
All of which is true. As AllThingsD’s John Paczkowski noted, “There’s a big difference between technology that became popular because it was adopted as an industry standard and technology that became popular because consumers fell in love with it. In the case of the smartphone patent wars, the first makes a cellphone a cellphone and the second makes it an iPhone. One is a core technology, the other is experiential, product differentiation.”
Apple & Oranges
Another problem with Google’s self-serving assertion is the nature of its comparison. Standards-essential patents are submitted by the patent holder to standards bodies in hopes of getting their technology included in a proposed standard. If that happens, the patent holder will be assured of steady patent royalties for as long as that standard remains relevant. They might also make money by providing hardware related to their patent to companies making devices that use the standard.
This is a great business for companies like Samsung, Nokia, and Motorola who have been researching cellphone technology—especially wireless technology—for decades. They stand to make far more money by having their patented technology adopted as a standard in the name of interoperability than they would otherwise.
Companies like Apple aren’t in that business, though. Apple is looking to build cell phones that are interoperable with existing wireless networks, but that offer a differentiated user experience. They spend money on R&D to develop new ways for their users to do things, not to find new ways that other companies can make devices.
If Apple’s competitors are allowed to copy what Apple invents, Apple’s competitive edge will be erased and Apple’s incentive to innovate will disappear. If that happened, who would Google and its Android OEMs copy then? Microsoft’s Windows Phone? Nokia’s dead Symbian?
The truth is that Google doesn’t want to have to compete with Apple on innovation. As noted above, Google’s business is slicing and dicing our personal information and habits and selling the results to the highest bidder. As long as the company can get that information, Google’s letter suggests it doesn’t really care about the innovation side of the equation.
Maybe that’s because innovating and inventing is rough and messy. Things would be much simpler for the company if it could just ride Apple’s coattails.
In my opinion, that’s just evil.
Image made with help from Shutterstock.