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Could Copyrights Leave Patents out in the Cold?

Latest Crop of Farm Machinery Software is Planting the Seeds for Strong Copyright Growth

John Deere 9420 Tractor

In my business, I meet a lot of smart and creative people with great new ideas. Predictably, many plan to submit patent applications to protect their ideas and make LOTS of money.

But, I’ve noticed a recent trend that is worth consideration for some new ideas: Copyrights seem to be moving into the money-making spotlight. At the same time, there is less talk of patents as financial security.

How patents may be losing their luster

Two large companies recently announced that they’re loosening the strings on their patent rights somewhat:

• Elon Musk of Tesla fame stated that “these days they [patents] serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors.”
• Ford Motor Company’s intent was expressed in a commentary that it “believes sharing its patented technologies will promote faster development of future inventions as all automakers look toward greater opportunities.”

Regardless of Ford’s or Tesla’s written reasoning, both are almost certainly attempting to expand their own electric vehicles market to make more money. Nothing wrong with making money! That’s what companies should do and it’s quite likely some serious business strategy decisions went into each statement.

NASA has also weighed in about sharing patents, but it’s quite likely that their intent is their own market growth, since they’re a government agency. NASA states that their belief is that sharing its patented technologies will promote faster development of future inventions.

On top of all this, there has been a lot of negative press about patents in regards to lawsuits from Patent Trolls as well as some general fear/disrespect for patents in general.

How copyrights may be gaining appeal

John Deere, the tractor manufacturer best known for its trademark green color, is receiving a lot of attention about copyrights lately.

As you might have guessed, tractors have been around a really long time and there are several companies that are well known in this industry. So, in a saturated market, how would you choose to beef up (agricultural pun intended) the bottom line?

According to Fortune magazine, one row to hoe is software services. While feeding the bottom line, these services also add a lot of complexity to the products they’re improving and the lives of the people that use them.

A recent article in Wired points out how the do-it-yourself culture of farmers is getting interrupted. Modern farm equipment includes sophisticated information gathering, but farmers can’t pull down the data their equipment generates and they are unable to fix minor or major problems without the permission of John Deere.

The reason is software copyrights. Certainly password protection and other hardware barriers limit the ability of people to log into their tractor’s computer systems, but ultimately it is the copyright that says you are violating the law during any attempt to do so.

Is this example unusual? Not at all. Ford is asserting their copyrights, among other methods, in an attempt to control the activities of competing diagnostic reader Autel which “decrypted a list of parts used in Ford’s vehicles and included it in its own product.”

The problem for Ford is that Autel’s “aftermarket diagnostics tools [are] meant to help consumers identify problems with their vehicles without requiring them to visit a manufacturer-sanctioned automotive shop in order to do so.”

Perhaps the Internet of Things (IoT) will push copyrights ahead in importance for years to come.

My thoughts and predictions

Let’s wrap up this discussion of patents versus copyrights with some analysis.

I predict that companies in the agricultural and construction equipment segments will continue to move forward to refocus their profit margins on copyrights, especially as their products get even more laden with sensors and computerization.

Already, Caterpillar, known for the famous yellow color on its line of construction equipment, has been noted as “installing all kinds of cameras, sensors and satellite-based positioning control and guidance systems on its machines to help customers increase their productivity and efficiency and eliminate workplace accidents.”

While this data is very useful, it is potentially most valuable to the company as it promotes services and tries to stifle competition. I predict that the buyers of these products will start becoming more vocal about gaining access to any and all data that they have generated but may not be currently available to them.

Why are patents losing their luster while copyrights begin to shine for future business profits? A few ideas:

• Patents are more time-consuming and expensive to obtain and maintain than copyrights.
• “Software” patents are being more rigorously examined by the USPTO and, therefore, have become much harder to obtain since the “Alice” decision in 2014 by the U.S. Supreme Court.
• In the U.S., the term for patents is 20 years while the term for corporate copyrights is 120 years.
• Patent infringement is more difficult to detect while detecting copyright infringement in software can be much easier when the software has to connect with the company’s server for authentication, updates, or data storage.
• Software development seems to be getting a lot more attention than hardware in recent years. At least that’s my perception.

Are either of either of these trends real? If so, are they related? What are your thoughts?

 

With thanks to David Tuttle, Research Fellow in the Energy Institute at The University of Texas, for his contributions.

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Comments

  1. Erik Keldmann says

    February 10, 2016 at 8:57 am

    Att. Steve Pearson
    Having my name on several patents, which are issued over many years. Having experienced infringements, where the defence is more a quistion of, who can afford to buy the best patent attorney, than priority date, description and claims. With this experience, the existing copyright rules and the complexity of aquiring patent rights, we have an indication of that copyrights could be a good alternative.
    But as patent rights are a business weapon of the big Companies, one must always be aware of, that Freedom to Operate still is a very serious item, when we are dealing with Intellectual Property.
    Kind regards
    Erik Keldmann, Founder of LearnFromInnovators

    Reply
    • Steve Pearson says

      February 10, 2016 at 9:06 am

      Erik, I agree on all counts. I often remind both inventors and companies that they need to be careful with other people’s patent rights as this is frequently overlooked when developing new ideas.

      Reply
  2. Ashkan Alavi says

    February 17, 2016 at 10:31 am

    I think it is about time for this shift. Copyrights are automatic and sort of natural, yet almost useless in terms of monetization and very hard to protect. On the other hand, patents have been manufactured rights that is proven, time and time again, that have nothing to do with actual technology progress. In fact, as Elon Musk stated, I would say pharma aside, it has been more of a negative correlation between patents and innovation in the recent years. Thanks to the digitalization of the world, now it is easier to enrich the public domain and stop creation of weak patents and abuse of the system. The problem remains though how to monetize copyrights.

    Reply
  3. Steve Pearson says

    October 31, 2016 at 12:41 pm

    Here’s a quick update on the post:
    (10/31/16, Andrew Krok in CNET) Last year, the Librarian of Congress announced that tinkering with car software would no longer result in a violation of the Digital Millennium Copyright Act (DMCA). This exemption would take a year to kick in, and now, one year later, it’s time to start fiddling with those 1s and 0s.
    https://www.cnet.com/roadshow/news/modders-rejoice-its-legal-to-tweak-your-cars-software-now/

    Reply
  4. Steve Pearson says

    March 27, 2018 at 2:39 pm

    Here’s a news story that shows copyrights can have incredible value to companies: https://www.digitaltrends.com/mobile/google-loses-oracle-appeal-may-owe-billions/

    Reply

Trackbacks

  1. Is your company headed to Patent Prison? - The Pearson Strategy Group, LLC says:
    June 8, 2021 at 10:37 am

    […] Patents are likely the most expensive form of IP protection you can throw your money at, so shouldn’t you consider cheaper options just in case? If you think copyrights are worthless, you better check out my earlier post at https://pearsonstrategy.com/2016/01/could-copyrights-leave-patents-out-in-the-cold/. […]

    Reply

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