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Saturday, August 12, 2006

Editorial - Trying times ComputerWorld July 1990

Editorial

Trying Times

In the War of the Roses , Danny DeVito's character asks "What do you call 5,000 lawyer's at the bottom of the Atlantic Ocean ?"

Answer . A good start.

Ok. Ok. So lawyers are an easy target, but the joke seems appropriate these days, given how a lot of us must be feeling about the industry.

Consider that three of the biggest news stories of the past three weeks have concerned a contentious patent dispute between Motorola and Hitachi, a decision in the four-year Lotus "look and feel" ordeal and a bitter lawsuit between the two Stardent executives and the company's major investor .

That's in addition to the myriad pending copyright lawsuits that have been filed during the last two years , the counteless class-action suits that are filed by shareholders every time a company's earnings surprise investors , users suing vendors for failing to solve their problems, vendors suing developers for planting logic bombs in programs, vendors suing vendors for theft of trade secrets and so on.

What's going on here ? This little industry has become a $ 260 billion machine and that's that. And in the process , it's litigating itself to death.

Not too long ago, the high tech headlines were dominated by stories about technical breakthroughs and the ever-expanding markets for computer technology. Sure , there was the stray antitrust suit here and there , but there was still plenty of money to memmade and more niches to fill than there were niche-fillers to go around.

Look around today. There are darned few niches left around ( when was the last timeyou saw a personal computer software package that truly defied classification ?); the big guys are holding on jealously to the positions they've got; and industries in decline are now looking to their legal departments for revenue that their research and development departments can't give them.

Texas Insturements , for example , has practically made a business out of suing chip competitors for patent infringement . IBM dusted off every PC patent it could find two years ago and used them to extract fees from clone makers. Lotus's attempt to vigorously protect its intellectual rights says as much about its inability to produce new breakthrough products as it does about the value of its interface. Apple's $ 5 billion weight rides squarely on the look and feel of the Macintosh , and it won't let Microsoft forget it .

Lawsuit mania is nothing new to American business. Practically every industry has gone through a similar phase as the competution shakes out , and the big players stake out their turf.
Unfortunately for U.S. companies , this latest round comes just as Japan is making highly visible progress in its campaign to become a high tech innovator. Meanwhile , the largest U.S. companies are diverting R & D dollars into their legal budgets . Creativity often suffers when laywers get involved.

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