Intellectual property protection in the manufacturing industry has become a battleground. But the industry has more important battles to fight.
The most recent conflagration is over RFID patents. Intermec Technologies Corp. and Symbol Technologies Inc., both of which hold numerous patents on this auto/ID technology, are suing each other, claiming infringement. This patent dispute has spilled over to the EPCglobal organization, the electronic product code standards organization that is attempting to set guidelines for the use of RFID products.
Meanwhile, another patent dispute continues to burn in the PLC area. In March, GE Fanuc became the latest company to settle infringement claims over the so-called 318 patent held by Solaia Technology, a firm whose business is collecting licensing fees based on that patent primarily from end users of PLC-based equipment. In late 2003, Opto 22, rather than continue to fight a draining battle over a Web server patent, settled a suit with Schneider Electric.
Rockwell Automation, like GE Fanuc did for a time, has been battling Solaia since 2001 over the 318 patent in order to protect its customers and to shield itself from indemnification claims. But many other companies, including many manufacturing firms, have paid up rather than face on-going legal struggles. The fight over the 318 patent became such a free for all that one of MA's competitors, Start magazine, was also sued when it published a crusading article about the patent battle.
Patent fights have also roiled the bar coding arena. Since the late '90s, Cognex Corp. has been fighting the Lemelson Foundation, the holder of bar code-related patents, over infringement claims against end users. Dozens have paid up, but Cognex continues to resist Lemelson's claims in court.
What we have here is not only a failure to communicate, but a failure, as an industry and as a nation, to focus on what really counts. U.S. manufacturing is fighting for its future. The National Association of Manufacturers estimates that the cost of litigation, health care and other benefits put U.S. companies at a 22% cost disadvantage compared with manufacturers in other countries. Internecine warfare over IP not only diverts energy and resources into unproductive exercises like long legal battles, it also distracts industry from focusing on the most important priority -- becoming more competitive in the global market.
Now, I'm not saying that companies don't have the right and the obligation to protect their creations from theft. But it's a different matter when patent protection becomes a for-profit business at any cost. And it's unproductive for the industry when companies can't amicably settle legitimate disputes. The U.S. has been a leader in the creation of intellectual property, and this leadership has provided one of the most important competitive advantages for industry. Patent warfare will only serve to undermine that advantage.
There may be something in the American character, underpinned by our political system, which makes litigiousness a perverse reaffirmation of the idea of independence. It's a characteristic we might just have to live with, but we would all be much better off if it could be managed more effectively. If the companies embroiled in these disputes could step back and focus on the big picture, it just might clear away one of the factors inhibiting competitiveness.
What's your view of IP protection? Write to me at Dbrousell@thomaspublishing.com.