Semiconductor IP News and Trends Blog

IP Bubble Raises the Lawyer-to-Engineer Ratio

The high-stakes game of IP acquisition has some observers wondering if the lawyer-to-engineer ratio has reached a new high. That would be bad news for an economy based on innovation.

It is being called a “Patent Bubble.” Large individual companies and conglomerates are buying up major amounts of patents and semiconductor intellectual property. The latest so-called “mind” grab has been Google’s recent acquisition of more than 1,000 patents from IBM. Google’s actions follow in the wake of the company’s failed bid to acquire Nortel Network’s patents. (see, “What is the Freshness Date on Nortel’s IP Patents?)

What is the relationship between the number of patents granted by the Patent Office and technical innovation?

It used to be that strategic acquisition of patents – including semiconductor IP – enabled technology innovation in new areas. But today, many argue that patent acquisition is merely a protective move against growing corporate litigation. Apparently, IP is considered the best defensive against ever increasing patent trolls.

The problem seems to be two-fold. First, many patents are vaguely written. Second, politicians seem to believe that patent generation is a key measure (or even source) of job-creating innovation. This type of reasoning may explain why they become politicians instead of engineers.

Cartoonist Scott Adam’s recently blogged about the lawyer-to-engineer ratio, suggesting that this ratio was the best indicator of the long term economic health of a country. I agree. Engineers create, while lawyers (at best) protect. At worst, the latter creates a hostile environment for creating new products. The lower the L-to-E ratio, then the greater the probability of innovation. A higher L-to-E ratio means an increased risk of litigation.

In these economic times, it’s easy to do the math – unless you’re a politician.