Google and Apple spend more on patents than on R&D

October 8, 2012
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In 2011 Google and Apple both spent more money on patents than they did on research and development. Acquiring patents and patent litigation in the smartphone industry amounted to $20 billion in the last two years, according to Stanford University analysis. The issue is covered in detail in an excellent article from The New York Times yesterday.

Isn’t that just a depressing thought? Even the most ardent defender of the patent system currently in use would be hard-pressed to put a positive spin on that news. Our tech giants are spending more money fighting each other for dominance of the market than they are spending on trying to develop the next big thing.

We’ve always been pretty clear about the fact that Apple is forcing this patent war on its competitors in order to stifle competition. Facing court action on multiple fronts, Android device manufacturers have had little choice but to retaliate. Google CEO, Eric Schmidt was pretty clear about his position, “So ultimately Google stands for innovation as opposed to patent wars,” he said on a recent visit to South Korea. Even Apple CEO, Tim Cook, claimed he “hates litigation” and would “prefer to settle” in an investor conference call back in April. Apple’s actions since then tell a completely different story.

The escalation of the patent war has been plain for all to see. The highest profile case may have been Samsung’s defeat at the hands of Apple in a California court room, but even that case is far from over with appeals filed by both sides. The number of cases is escalating – there are literally thousands of patent cases worldwide every year. That’s a staggering amount of money being poured into the pockets of patent lawyers.

Companies are filing for patents on ideas, before they have an actual working method to produce something. What was originally a defensive strategy to protect future projects is increasingly being wielded as a weapon against competitors. The difficulties facing start-ups when they clash with a cash-rich company and its patent portfolio, or worse a patent troll, are insurmountable. The result is stifling innovation instead of encouraging it and, as usual, we, the consumers, have to suffer the consequences in terms of higher prices and limited features.

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