Last week Horatio Gutierrez, Microsoft’s Deputy General Counsel, made some interesting comments regarding the intellectual property implications of cloud computing. One insight that I think is particularly profound is that the ability of patent holders to detect infringement is going to become much harder. That makes a lot of sense. After all, cloud computing is about the provision of IT-enabled capabilities as a service. Trying to determine if your patents are being infringed upon if they are components supporting a cloud service will very difficult.
Does that mean organizations committed to building, and exploiting patent portfolios are going to be chucking in the towel while saying to themselves, “oh well, this patent thing was good while it lasted.” Doubtful…very doubtful. In all likelihood they’ll be shifting their focus to those patents which will be easier to take advantage in a cloud computing environment. Gutierrez made exactly this point when he said:
IP to do with the user interface – the part of the service that’s actually exposed – will become more important, and will become the identity of the person providing the service. We need to go back to our toolbox of IP rights and dust off some.”
I think he’s right. And I think you – the enterprise IT organization – had better absorb this quickly. Why? Because if you think the cloud computing phenomenon is strictly about IT vendors delivering infrastructure, platform and software services to you, then you’d be missing a key part of its disruptive potential. Cloud computing enables every company – whether they’re IT providers or not – the ability to deliver their own IT-enabled capabilities. IT-enabled supply chain services, for example, might just as readily be consumed from supply chain management companies as they will be from SCM application providers that offer a cloud computing option.
The seemingly never-ending stream of patent infringement cases has largely been a sideshow for enterprise IT organizations. This has been saga played out between the IT vendors and only rarely becomes a problem outside that community. But the expanding desire of IT vendors to directly commercialize their IP portfolios will slowly start to erode the reticence they have had in pursuing organizations they currently deem as being their customers.
And here’s the thing – cloud computing, over time, will blur the lines of what it means to be an IT provider. And that means every organization becomes a potential patent infringement target for those companies with portfolios bulging with UI and design patents. The chances of stumbling into a UI-related infringement action will be very easy given both the range of overly-broad patents in this area and the serious lack of attention that most non-IT vendors pay to their own potential infringement in the realm of information technology.
Sadly this will likely drive more organizations to start building their own patent portfolios. After all, one of the most consistent motivations for organizations’ interest in creating, and growing a patent portfolio is to secure a meaningful defence against patent litigation.
The patent arms race will only continue.
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