[Patents] A shareholders viewpoint

[Nick F. marmalade@libertysurf.co.uk]

Luuk,
       I agree with you totally that it is somewhat unjust that all the
patenting going on is destroying peoples businesses just because 
someone else got a monopoly on an idea - at least from a developers
viewpoint.

    (I write software too, so I get quite miffed when I have to
ditch it for legal reasons..)

    The thing is, there are a number of businesses which rely
on patents to provide some sort of stability within industries.
I notice that a lot of the software companies that are filing 
patents seem to be listed on the stock exchange. This is because
shareholders (banks, insurance firms, pension funds and other
financial institutions) tend to invest in companies that have a 
strong, preferably long term position within an industry so
that the share price has a better chance to increase in value.
If a business has a monopoly, it is less likely to go out
of business in the near future than one that does not.

What this means is that to attract investment, companies
often protect their businesses with patents. As Greg
will probably remind us later - shareholders see software
as just another industry to invest in.

Peter Lynch, one of the top US fund managers wrote the
following in "One Up On Wall Street" :

"There's also hidden value in owning a drug that nobody
else can make for seventeen years, and if the owner can
improve the drug slightly, then he gets to keep the patent for
another seventeen years."

(Im not sure that is entirely correct but you get the idea).

So you see, from a shareholders perspective, they don't
actually have to care about the state of an industry, or
who loses, just as long as their share price keeps going up...

Just my 2 cents.

Regards.

Nick