Over on the Tech Liberation Front, the Show Me Institute’s Tim Lee is questioning my post on the role patents played in the development of Apple’s new iPhone. Unfortunately, it seems that Mr. Lee has been brainwashed by the mythology of the anti-software patent crowd. While I don’t have time to go through all the logical and historical inconsistencies of his post, the best place to begin is probably the rhetorical question that he poses near the end of his post:
Even if Nokia does a lot better than Microsoft and manages to clone the iPhone interface in, say, 2 years, that still means that they’ll be perpetually 2 years behind. Why would consumers buy a knockoff of the 2007 iPhone from Nokia when they can buy the 2009 version from Apple?
Why? Because consumers always do! The vast majority of consumers aren’t buying cutting edge technology, and Nokia’s phone will inevitably be cheaper (because reverse engineering is less expensive than inventing and less risky), integrate additional features, and be otherwise “good enough.” And “good enough,” often wins in the marketplace.
In case there is any doubt, let’s take a closer look at the Mac vs. Windows example, Mr. Lee presented here:
But cloning a breakthrough new user interface is actually quite difficult. Just ask Microsoft, which spent six years trying to clone the Macintosh interface in the late 1980s. Microsoft didn’t succeed in matching the functionality of the first Macs until at least Windows 3 in 1990, and arguably not until Windows 95. In the meantime, Apple had ample opportunities to reap big profits from its innovation.
Sure, the Mac OS was light years ahead of Windows 1.0, and it took Microsoft until Windows 3.1 or even Windows 95 to get to near feature parity. Did that translate into the immense marketshare and "big profits" for Apple Mr. Lee’s theory would predict? Funny enough, no it didn’t.
In fact, it took Apple nearly 7 years to sell its first 5 million Macs. On the other hand, Microsoft sold 10 million copies of Windows 3.0, “a usable, less expensive alternative to the Macintosh platform,” in less than 2 years!
Apple has long been stuck in the role of creating markets, while others come in later to dominate them. They spend millions in R&D innovating. They spend millions market testing each product. They take on all the risk that consumers might not even WANT a GUI-based operating system. In the end, their competitors take advantage of all their hard work and gobble up marketshare.
Apple tried using trade secrets and even copyrights to protect their innovations to no avail. In 1998, Apple sued Microsoft and HP to protect the “look and feel” of the Mac OS with copyright, but they failed in the courts. Many believe that if they had patented some of those concepts, Microsoft would not be the dominant player in computing today.
Based on Mr. Jobs’ presentation of the iPhone, it seems that Apple has learned from its mistakes in the past. Copyright and trade secrets are valuable IP protections, but patents are the only way to protect true, paradigm-shifting innovations.