THE BLOG
08/28/2011 02:14 pm ET | Updated Oct 28, 2011

Are Patents Stifling Innovation at Google? Maybe, Maybe Not

The FTC is investigating Google, and Google is mounting a massive public relations blitz in its own defense. Both are probably justified.

Not all the claims that Google offers in its own defense, or that its allies are offering, are justified. I have attempted to assess the unreasonable parts of the defense of Google, without presuming any guilt on Google's part. The defense offered so far is incomplete, and I have detailed why I believe that the FTC investigation should continue.

I have started to suggest topics worthy of detailed investigation, and specific areas where the FTC should seek to gather data. I began with an investigation of the "one click away defense," which argues that both consumers and companies are merely one click away from choosing another search engine. There is specific information that would help assess the extent to which consumers act is if that is true, the extent to which it is true, and the extent to which Google has sought to support or interfere with "one click away" freedom. The FTC should surely pursue this as part of their ongoing investigation.

A second important claim made by Google and its supporters is that is that Google is a major technology innovator, and Google's innovations are being stifled by patents, royalties, and regulations. According to this argument, an attack on Google is an attack on innovation, which presumably will reduce the range and quality of products available to consumers and increase the prices that consumers pay.

Rather than continue to debate this in blogs, it would be useful to get the information needed to assess which successful Google products are based on innovation done by Google and which are based on the innovations of other firms. This would help determine if Google is principally an innovator or not. Again, rather than debate in blogs, it would be useful to determine which intended Google products were blocked by patent protection. This would help determine if Google would have been an innovator, or a more successful innovator, but for interference from patents, royalties, and regulations.

The following questions should be specifically addressed by the FTC:

  1. Which Google products were truly innovative, and were based upon Google's own research. The technology of search? The business model of search? Chrome? Android? Office? Gmail? YouTube?
  2. Which planned Google products were blocked because Google could not get patent rights or royalties? Which innovations were blocked because Google could not get access to online content from newspapers, online review sites, or other content protected by copyrights?
  3. Which planned Google products were blocked because Google could not afford the licensing fees and royalties required for use of the patents other companies? Which planned Google products were blocked because Google could not afford to pay for the use of online content from newspapers, online review sites, or other content protected by copyrights?
  4. Which successful Google products are based in some sense on violating patents or copyrights? How accurate are the claims that Google retaliates against the owners of protected material when the owners attempt to exercise their rights of ownership, as alleged by online review sites and newspapers?
  5. To the extent that Google is seen as being stifled on any true innovation because it refuses to pay royalties for the use of patents, to what extent are these indeed bogus patents owned by trolls, as Google as suggested, and to what extent are they legitimate patents owned by legitimate high tech competitors?
  6. And to the extent that there may be any products where Google just decided to "roll the dice" and boldly press on without paying royalties or worrying about other parties' patents, to what extent was senior management aware of or involved in these decisions? That is, "who knew what, and when did they know it?"

This would help us determine if Google is being stifled by unfair competition and unfair restrictions on access to content and intellectual property. Alternatively, it would help us determine if Google is competing unfairly, abusing the intellectual property of others, and potentially stifling innovation through this own unfair competition. Of course, there is always the possibility that patents have not significantly altered Google's competitive strategy or their competitive success, and that the ongoing campaign of complaints about patents, led by Google's Mr. Drummond and Mr. Walker, has been little more than a deliberate distraction. But more later on why that distraction might make good business sense for Google.