On Intellectual Property: Microsoft and the iPod Patent
Score another one for the Redmond giant.It was disclosed last week that as soon as sales of the Apple iPod took off, Microsoft's intellectual property team filed for its patent.
As a Microsoft employee said: "Our policy is to allow others to license our patents so they can use our innovative methods in their products."
Boy, is Apple CEO Steve Jobs going to be pissed.
Microsoft is where it is today precisely because it innovates.
But we're not talking pure product invention, here.
MSFT innovates in un-traditional and cutthroat ways, namely through Darwinian appropriations of intellectual property.
Gates and Co realize that the winners of the Information Age are not necessarily the creators, but the owners.
With almost offensive and obscene ammounts of cash on hand, Microsoft feels secure in knowing that whatever it doesn't create, it'll just buy.
Capitalism isn't driven by innovation; the motor of the Capitalistic Age is ownership, plain and simple.
The Software (mind-blowing economies of scale followed by domineering market share) and Drug Industries (characterized by patent wars and lavish margins), for example.
Both industries are propelled, more than anything else, by property rights.
Hence, as De Soto -- in his magnificent and underappreciated gem The Mystery of Capital -- notes, capitalism succeeds vis-a-vis titles, deeds, and myriad other manifestations of ownership.
Without proof of ownership, you're left with only dead capital.
While one may argue that "Gates and Co. are no innovators," by popularizing the innovations of other, smaller firms, Microsoft proves its brilliance, however callous it may seem.
Gates did it with the licensing of MS-DOS many years ago and now his army is once again trying to do the same, only this time with that digital must-have, the ever ubiquitous iPod.
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