“When you live in a culture that tolerates and even promotes copying that is, in fact, what you get. When everyone copies everyone that means no one is innovating.”
Recently the Wall Street Journal published an article detailing Facebook Chief Executive and Founder, Mark Zuckerberg, directing employees to not let pride get in their way and to copy rivals in the industry. The Wall Street Journal reported that one particular employee present at this all employees meeting said that after this meeting the internal slogan within Facebook became: “Don’t be too proud to copy.”
Facebook executives have routinely said that it is common within the tech industry for companies to build upon technologies pioneered by others, which of course is true. Still, standing on the shoulders of those who come before you is very different than copying rivals and a company-wide understanding that the CEO and Founder wants you to take what others have spent time, money and energy developing. One is how the march of innovation proceeds, the other is the anatomy of infringement.
Just look at Snap for example.
Much of Snap’s IPO filings at the Securities and Exchange Commission (SEC) talked directly about patent and IP theft as a material risk. Indeed, while much of the Snap, Inc. S-1 Registration Statement filed with the SEC discusses the risk posed by the threat of patent infringement lawsuits against Snap, the statement also explained that “third parties may knowingly or unknowingly infringe our proprietary rights,” which turned out to be rather prophetic.
“If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be seriously harmed,” reads another section of the Snap S-1 Registration Statement.
Conveniently for Zuckerberg, and Facebook, “efficient infringement” has become fashionable thanks to Silicon Valley spending hundreds of millions in lobbying on patents the past 20 years.
This ‘take without paying’ philosophy that is pervasive in big tech within Silicon Valley comes from a place that is hardly new to those familiar with the business of innovating. As a company grows in size they are less capable of innovating, with extremely few exceptions. And even when most large technology companies continue to innovate they are really building upon the shoulders of acquisitions – whether it be the acquisition of companies or technologies. Innovation by M&A is common for large incumbents. Facebook did try to buy Snap. But Snap said no so now Facebook just copies Snap in order to keep bumping up their user and data numbers.
As for the excuses, the Wall Street Journal explains in the aforementioned article that the Silicon Valley culture has long regarded copying as a good thing and necessary for rapid growth, first to market, first mover advantage, network effects, world domination, liquidity for early investors and Founders, etc. What complete and total garbage. When you live in a culture that tolerates and even promotes copying that is, in fact, what you get. When everyone copies everyone that means no one is innovating. Many studies and articles in recent years have highlighted how we have a net loss of startups over the past 30 years and that companies are no longer innovating. Perhaps Apple has received the brunt of this criticism as nothing really breakthrough has occurred since the untimely death of Steve Jobs and much of Apple’s activity seems to be about suing partners like Samsung for copying!
The tech elite have mortgaged their own future by lobbying in Congress and arguing in the Courts for the dismantling of the patent system. They have crushed independent inventors and made it increasingly difficult, if not impossible, for fledgling tech startups to get off the ground. That means less job creation since startups create the jobs, but it also means a lot less innovation, and with that the result will be much less to copy, which will further result in stagnant innovation.
Ironic that the giants lobbied Trump earlier this year to make sure that the United States Trade Representative chief protected their patents. Now that Trump is going after China for IP theft it will be interesting to see China point out how these same tech companies have hollowed out America. The U.S. Chamber of Commerce, hardly a fan of litigation, reported this year in its annual Global IP Index that America has dropped from #1 to #10 in terms of patents thanks to the Patent Trial and Appeal Board (PTAB) and Alice. Joe Matal, temporary leader of the USPTO, said at the recent quarterly PPAC meeting that the U.S. used to issue patents in software but now other countries are doing it. In fact, Europe is now where innovators go to obtain software patent protection, not the U.S.
Reed Hastings, a Facebook board member, has called for Peter Thiel, another Facebook board member to resign because Thiel exercised poor corporate governance judgment by backing Trump. Hastings, founder and CEO of Netflix, is betting his shareholder’s future on paying for the creation of original content, competing head to head with the likes of Disney. How can Hastings justify sitting on the Board of Facebook as a content creator when Facebook has a culture of copying? If Thiel exercised poor judgment backing Trump, what is Hastings doing by tolerating a culture of copying at Facebook?
Facebook, like other tech giants that fund the infringer lobby, dearly want Trump to protect them from China’s policies on IP, data localization, cybersecurity and antitrust. Yet their lobbying against patents in the U.S. deliveries a great political and economic gift to China. Shouldn’t Hastings take a page from the Netflix book and take Facebook out of the copying business? Or will it be Thiel? Hard to see him switching sides and embracing patents given his libertarian roots and statements against patents.
Perhaps an entrepreneurial activist shareholder will be able to profit from the hypocrisy and cognitive dissonance of these billionaires.
Join the Discussion
25 comments so far.
Tesia ThomasAugust 18, 2017 08:16 pm
We also need to change securities laws.
CEOs have to think about shareholders before even themselves.
What we think is an ethical dilemma is actually a CEO doing his/her legal duty.
I don’t agree with Crony capitalism from Google, FB, Tesla, whoever but I do know that we inventors could all be changed the same way if we want to remain the CEOs of our own companies.
PTAB maximizes value to the Evil Eight’s shareholders. It eliminates competition. The companies are doing their jobs really well.
And that’s what really needs to be changed.
Ned HellerAugust 18, 2017 03:58 pm
angry dude, all that happened before my tenure.
However, the attitude seems to have been is that if we Seagate share our designs with you, you should share your designs with us. Thus if the vendor got all proprietary, they ceased to be a vendor.
When one, however, has an entirely new product being sold to the end user, IP protection is essential.
angry dudeAugust 18, 2017 02:45 pm
Gene Quinn @19
Or perhaps inventor has to work for US government or government corporate contractor to pay his/her bills – same government that destroyed his/her invention by catering to infringer lobby
Then inventor can’t tell the real story under his/her real name and has to use fake name to openly criticize the government in this forum
Same with frustrated USPTO examiners posting here
Tesia ThomasAugust 18, 2017 02:09 pm
Oh, actually. I know the answer. Defamation suits.
BemusedAugust 18, 2017 01:55 pm
I remember the first Democratic primary debate where Bernie Sanders said exactly the same thing: Repeal Citizens United because it perverted the one person/one vote concept so important to a Democratic process. As an aside, that was one of the few points on which I and Bernie (or for that matter the Democratic party) were/are in agreement on.
Imagine, for example, if Google could only contribute the same dollar amount to Representative Issa as say inventor Josh Malone. Get a few Josh Malones together to contribute to Issa (or better yet Issa’s opponent) and see if he suddenly stops being a shill for the efficient infringer lobby.
Perhaps one of the ways back to patent sanity is through a collateral attack, i.e. taking away the economic might (which translates to political capital) of big tech by repealing that abomination called Citizens United.
Tesia ThomasAugust 18, 2017 11:24 am
“The frustrating thing for me, however, is whenever I hear a story that would pull at the heart-strings the inventor won’t tell it because they have an attorney who convinces them they need to keep their mouth shut. ”
Yeah. Why do attorneys do that?
I never understood. Is it that they could say something that harms their case?
Also, some inventors are bound by ITAR and “classified” provisions to such an extent that mentioning the invention in public could land them in prison.
Gene QuinnAugust 18, 2017 11:13 am
No offense taken. I know exactly what you are saying. We are in an echo chamber here (largely) and at times it feels like we are shoveling water back into the ocean.
The way that inventors always equalized the battle was by winning the hearts and minds of the public, who had a romanticized view of inventors and innovation. The efficient infringer lobby has co-opted the definition of “innovation” to mean taking what is not yours but putting a product into the market and many have bought it, both in the public and in Congress and the Courts.
We need to get back to the hearts and minds campaign. The frustrating thing for me, however, is whenever I hear a story that would pull at the heart-strings the inventor won’t tell it because they have an attorney who convinces them they need to keep their mouth shut. Over and over again that is the story. So there are no good inventor stories, no real horror stories about how the efficient infringers are destroying the small guys/gals. Until that changes the fight will be constantly uphill.
Perhaps with Facebook stealing from Snap that is something the younger generation can get their heads around, particularly if Snap were to ultimately vanish as a result. Not that I’m wishing for that, but I fear we are at a place where catastrophe needs to happen and be there for all to see before a hearts and minds campaign has any real chance.
Tesia ThomasAugust 18, 2017 11:10 am
Can we just make this form of corporation lobbying illegal?
AnonAugust 18, 2017 10:47 am
You alight on one of the drawbacks – and therein a possible step:
Repeal Citizens United and put some proper constraints on the juristic person of corporations – especially transnational corporations who owe NO true allegiance to any one sovereign (and who thus cannot be ad beholding as a true citizen would be to a sovereign).
BemusedAugust 18, 2017 10:15 am
Google, Facebook, et al: capitalism at its worst (or best depending upon how cutthroat you are). From a purely selfish, corporate perspective there’s nothing wrong in big tech copying others folks inventions and eviscerating the US patent system (with the oh-so-eager help of our elected swine, er, representatives). From a purely moral, ethical perspective it sucks.
But how to change this dynamic is the real issue in my mind (with all due respect to Gene who does an outstanding job in providing a platform for the rebellion). And what can a loosely knit group of independent (read financially restricted) inventors do against the nearly unlimited war chests of the efficient infringer lobby?
angry dudeAugust 17, 2017 09:52 pm
Ned [email protected]
Wonderful business advice, dude
The Founding Fathers must be proud of folks like you inhabiting this country
Tesia ThomasAugust 17, 2017 08:32 pm
“Patent infringement? What me worry? That was just a nit that could be handled.”
Yes, via Seagate’s Crony capitalism. Didn’t they set the standard so infringement was harder to prove?
The precursor to AIA’s IPR I’m sure.
I’m also sure whoever is dumb enough to use Tesla’s technology without a written license/agreement will pay something in the end. Especially if their car company becomes a great competitor.
Ned HellerAugust 17, 2017 07:36 pm
Seagate used to pioneer new designs, but then allow chip and component makers to sell them to other companies. The idea was that Seagate would get the component makers to given them substantial discounts on pricing in exchange. This resulted in other companies using Seagate’s designs, and it gave Seagate a small lead on the timing of new product introductions where profits were greatest. This was so-called cost to market strategy.
Seagate also gave proprietary component designs of third parties to the competitors of third parties in order to get second sources and to cut pricing. Patent infringement? What me worry? That was just a nit that could be handled.
Tesia ThomasAugust 17, 2017 06:24 pm
You’re just a fool if you really think Elon Musk is actually going to give any tech away free and clear.
I bet you any money that when/if someone challenges Tesla cars in the marketplace and nearly displaces the company, then he’ll sue for patent infringement.
Elon Musk is not 100% altruistic. No one is.
Everything he does benefits him and his businesses. And that’s not a bad thing. The Crony capitalism and anti-patent stance from these companies who patent the most is the only bad thing.
Dig deeper than the surface BS.
Just note: I like Elon, Sergey, Larry, Jobs, etc. They have great stories.
I just think they’re all sell outs now. I mean, they owe their shareholders.
More money. Less integrity.
They are quite literally ruining the laws they depended on when they were at the small stage.
Again, these companies file the most IP. Yet, somehow they hate IP…????
Tesia ThomasAugust 17, 2017 06:10 pm
YOU MEAN LIKE ALL THESE PATENTS?
THIS is merely concept, unpatentable: http://www.spacex.com/sites/spacex/files/hyperloop_alpha.pdf
Who are you? An SV shill? Use Google’s search engine and find the hypocrisy.
I’m so tired of rich people proclaiming to hate patents and destroying the law with their Crony capitalism. They need to remember where they came from. Elon, too.
Gene QuinnAugust 17, 2017 05:35 pm
I’m sure you think your extraordinarily ignorant comment is very clever.
Gene QuinnAugust 17, 2017 04:57 pm
“no one could actually steal their tech in the early days”
An employee could have. A partner they were working with could have. And a trade secret, as you suggest, would not be able to be used to prevent others from independently creating on their own.
“Patents were just for show to investors I guess, not for actually protecting their tech”
Not true back in the 1990s.
22f3ffsfsAugust 17, 2017 04:10 pm
“You know, why not just publish a paper on the tech instead of getting a patent.”
You mean, just like he did with hyperloop?
angry dudeAugust 17, 2017 03:39 pm
With Google’s early tech entirely on the server side and a very minimalistic webpage loaded in the browser no one could actually steal their tech in the early days
Patents were just for show to investors I guess, not for actually protecting their tech
Pagerank by itself is nothing – it is scaling up the platform to thousands of servers and billions for indexed pages that matters
And yes, Google paid a ridiculous sum for (mostly junk) Motorola’s patents but refused to pay even a small fraction of that money (per patent) for good patents offered to them through their patent palooza action
Confused PharmacistAugust 17, 2017 03:30 pm
Might wanna remove that facebook link at the top of this page and consider shutting down your ipwatchdog facebook page as a form of passive protest.
Tesia ThomasAugust 17, 2017 03:15 pm
Oh Gene, that wasn’t ignorance/dismissal. It was spite.
I think angry dude meant starting without awesome patents since the tech SV giants stole from me was much better than those.
I don’t really know what is going on in SV.
Some of the largest IP firms in the world are located there.
The employees of SV multinationals are likely told to file patents and invent profusely. But, no one cares too much about IP.
The bosses are probably just denigrating it to, “We get them so we don’t get sued.”
which means…LOL. If one publishes tech/ideas/concepts then absolutely no one can sue over that tech because it’s free of the art.
And, defensive publishing would be more in line with, “We hate IP and are all about execution.”
Gene QuinnAugust 17, 2017 03:09 pm
Regardless of your dismissal of the seminal Google patent (for reasons that are unclear) it is incorrect to say that Google started without patents. In fact, it is ridiculously wrong. If you actually do a timeline you will discover that the company filed 2 patent applications before they even acquired the domain name google.com, which is pretty telling.
Not sure why you want to dismiss Google’s early patents. Google has always been interested in patents, they continue to be a top 10 patenting company, and paid a ridiculous sum for Motorola’s patents.
Tesia ThomasAugust 17, 2017 02:52 pm
But even people from SV were waking up to the perils of copying with FB stealing all of Snap’s tech.
And, with Uber Google battling over self-driving cars.
Execution matters most huh? Hmm… well, VCs always ask about IP…
Google’s still filing patents for this exact reason. Facebook too.
Again, “It’s execution that matters.”
Meanwhile the largest companies are obtaining patents as fast as they can.
Tesia ThomasAugust 17, 2017 02:42 pm
Yep. Elon Musk is especially unnerving to me because media paints him as so amazing for letting people use his patents.
People don’t ask, “Why did he get them in the first place?”
You know, why not just publish a paper on the tech instead of getting a patent.
People don’t understand that patents are a way of excluding people from making something. So, technically, Musk could eventually sue everyone who uses his patents for IP infringement.
Right now he’s just not excluding anyone…because no one is really competing with him in a way that scares him into defending his IP.
Ugh. SV hypocrisy…in everything.
Also, Paypal had patents too.
angry dudeAugust 17, 2017 02:08 pm
The worst thing about all of this is that both Google and Facebook started without patents (forget “page rank” patent – it’s inconsequential) on the server side where much of functionality is hidden and can be well protected via trade secrets
Once those corps became multi-billion dollar monsters they mushroomed into other areas like smartphones (for google) or virtual reality (for both google and facebook)
It is in those areas which are on the client side that patent protection is critical to small truly innovative upstarts
So it’s unfair game – they accumulated huge sums of money first before foraging into those client side technologies like VR/AR
Same with Elon Musk – Paypal came before Tesla and SpaceX
Just like scotus used some bs e-commerce patent to thoroughly f#$% up the rest of us – me, Tesia with her mechanical zipper invention, Zond with their plasma tech etc etc etc
Do I have to run drug trafficking business for several years to accumulate enough money to have a fair chance of success with my patented tech ?