Paul's blog

Want to end monopolies? Stop granting them

An argument against patents

I wrote this last year, whenever it was The Verge was doing that series on breaking up big tech. Now that The Verge is hanging out with politicians at southy south, some of whom who are talking a big game, I thought I'd share one of my arguments as to why breaking up big tech might be unnecessary.

Oh, and also, Microsoft is a gross patent troll. That is all.

I don't know if it's lame to say this, but I hate antitrust law. I don’t appreciate how it's written, I don't applaud its various applications throughout history, and I find nothing redeemable in the current hubbub about Facebook, Google, and Amazon.

This company's too big! What do we do? We ruin it, so we can have more "competition." Competition isn't a glorious prize in and of itself. I don't want to watch a football game where one of the quarterbacks has his arm stapled to his side just to make things "fair." Companies that best serve the most customers tend to "win," and when they win they often win big thanks to network effects, vertical integration, and economies of scale. And yes, they fend off and discourage and consume their competitors when they can.

In my view, antitrust proponents are Johnny-come-latelies, swinging the sword of government, hacking down winners for the temerity of staying on top. "Now that society has accrued the modern-life-defining benefits of your company, we'd like to destroy you so your less-successful competitors enjoy the reward of the market you defined."

Anyways, I'm probably too emotional about all of this. It just feels like stealing, is all.

So let's talk about something else: patents.

Patents are a time-limited monopoly on an idea. But it's not a naturally occurring monopoly. In most walks of life, ideas are spread, mutated, and copied freely. The only way to have honest idea monopoly is to keep it a perfect secret, and even then there's a good chance someone knows it. Patents only work because governments grant and enforce them. And while I don't like the idea of governments breaking up monopolies, I like even less the idea of governments granting them.

Do you know who would be terrified if we got rid of patents?

Pharmaceutical companies, yes.

But do you know who else?

Facebook, Google, Amazon, and nearly every other technology company at the top of its heap.

For instance, Google's search dominance was built in part on a patented algorithm called PageRank. Google's exclusivity on PageRank expired in 2011, long after it had an unassailable monopoly in search.

Amazon, more infamously, patented one-click buying back in 1999 and sued Barnes & Noble over the "technology" in 2000. This was such obvious bullshit that I'm surprised the patent office didn't shut down in shame then and there.

Facebook has a litany of patents, most notably a handful of patents originated by Friendster that cover the basics of social networking.

None of these companies, have rested on their past successes. From a cursory glance at Facebook recently patented "Commercial breaks for live videos," Google nabbed "Mobile interstitial ads," and Amazon now owns "Prioritization of items of delivery." The list of interesting, novel, and super dumb patents is endless.

To Facebook and Google's credit, both companies tend to use patents defensively more than offensively. Google, in its epic proxy patent war with Apple. Facebook, most recently, to retaliate against BlackBerry's patent suits.

But all sorts of companies, large and small, use patents to fend off competition and shore up power. Microsoft (ab)used its patent portfolio for years in attempts to destroy the open source "cancer" of Linux. Apple sues everyone all the time. IBM uses its ancient Prodigy patents to hassle companies like Priceline and Groupon.

Ma Bell, one of antitrust's most famous kills, got its start how? A patent on phones. Which, if we're being honest, is a pretty cool thing to have a patent for.

But you know what? Someone else invented the phone just around exactly the same time Alexander Graham Bell did. But Bell got the patent, and Bell got the profits. So anyone who's about to defend patents as an incentive for innovation: what if you're, like, super wrong about that?

My fear is that were a viable competitor to arise and take on Facebook, Google, Amazon, Apple, Qualcomm, Nvidia, Samsung, or whichever large tech company you'd most like to see disrupted, that new company would be destroyed by all the incumbent patents it can't match.

Who's to say for sure that if Facebook felt threatened by a social networking newcomer it wouldn't reach into its Friendster-derived patent bag and slap down the new contender — through patent lawsuits, patent licensing, or the threat of "let us buy you or we'll sue you." It gives me great hope that Linux survived Microsoft's onslaught, but not every disruptive innovation will be as resilient.

In my opinion, patents aren’t an incentive for inventors, they’re a terror for inventors. Instead of simply creating something and putting it out in the world, you have to first hire a patent lawyer to see if it’s allowed. And because technology companies have become patent printing presses with armies of patent lawyers and stacks of obvious, meaningless patents, it’s probably not allowed.

All this to say, antitrust is lame. Let's do something weird. Let's get rid of patents. Or at least technology patents. Or maybe just make technology patents only last one year. If we still have horrible, non-disruptable corporations after that, I'll buy you lunch and we can discuss the morality of monopoly busting to your heart's content.