I’m all in favor of strong competition in the market and I really love when that comes in the form of constantly improving products and services for consumers; doubly so if that also means lower overall prices in the market. For in-flight connectivity that seems very much to be the case as all the major players are innovating and increased competition, modernization of systems and increased consumption are all combining to reduce costs. In many ways we’re seeing very positive news in the space.
The flip side of the innovation, however, is intellectual property rights. Companies don’t want to invest millions upon millions of dollars to develop a system or technology and then see a competitor profit from the work. And, thanks to the US Patent & Trademark Office, there can be some protection offered for that R&D work. Gogo has added a line-item to their SEC filings to account for the value of their patent portfolio (initially a $500k valuation) recently and both Gogo and LiveTV have seen several patents granted recently plus several more IFEC-related patent applications are under consideration. It seems that not only are they battling for customers and higher speed services, but also for the rights to sell such services with specific configurations.
Will these patents ultimately derail the great progress we’ve seen of late? That would be a shame should it come to pass. I’m not suggesting that nothing should be patented or that the inventors should not receive legal protections, but I’m also selfish when it comes to wanting things to happen in my favor as a customer. Those don’t always line up so well.
Read more about the recent patent filings in the stories I’ve written for Runway Girl Network:
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Most patent owners will happily license their technology. Just because a competitor owns a patent doesn’t mean another party can’t practice it. It’s a rare case that a company will decide not to release a product unless they can’t get a license… (if they know they need the license and don’t get it, the risk is literally 3X). IP has value, it would be failing gogo’s fiduciary responsibility to their inventors and shareholders to not account for it.
I know that patent licensing happens and also that declaring the value is appropriate for Gogo. At the same time, I do wonder if Gogo would be willing to license the process of getting the app downloaded while in-flight if Row44 or LiveTV wants it. What’s the value proposition to Gogo to allow that, other than cash, which might not be as valuable as making their service more passenger-friendly (in the real sense of the term, not the United version). I also see lots of prior-art available on that one so I don’t think they’ll be too successful but I’m not a patent clerk so I’m not so sure.
I disagree.
Like you’ve mentioned, the developer presumably wouldn’t have invested in the product if it knew another could easily: reverse-engineer, sell at a lower price, and force the original inventor out of business. No one would invest in that.
Inventors/investors invest becuase they’ll be protected from free-riding, and also the opportunity to reap supranormal profits from exclusive rights.
To say, ex post, that the investor/inventor should give up their IP rights is somewhat analogous to signing up for a 50k credit card offer, and then after finishing the spend (and whatever req’s), being notified you’ll only receive 20k.
All of us would be upset at that.
fair questions –
re why gogo would license that – using the example of microsoft / andriod, every android phone sold results in something around $20 paid to MS. they make a ton every time their competitor sells a product (possibly equivalent to the fully loaded margin on /their/ products). i’m sure gogo could get to a place where they’re happy… and odds are there are patents the row44 folks own that gogo would need to have access to, so it’s not a one way street in most cases.
re prior art, that’s a much trickier thing given that there is legal meaning to the term and the claims are what matters – if the phrasing is that ‘app downloaded over wireless network to access subscription or pay as you go service’ yea there’s probably an att/starbucks example one could point to – but if the claim continues and says ‘…service is tied to sattelite or cellular communication’ then that’s different. just using that as an example, i have no idea what the landscape looks like.
The USPO are atrocious – they grant a patent for anything and are nowhere near as rigorous at vetting applications as patent offices elsewhere – sadly this just means years of litigation with stifling of innovation by companies that don’t actually make any products but just exploit patents. Nice work for the lawyers I guess 😉