Cold War

There is no protection against the patents of your competitors other than a massive counterthreat. It's all about balance of terror, like in the Cold War.

In the nuclear arms race of the 1970's and 1980's, both the United States and the Soviet Union had the power to wipe each other out. But none of them ever used a nuclear weapon against the other because they knew that it would have resulted in the overkill, the end of the world.

Large patent arsenals are also like nuclear weapons. If an IBM and a Siemens were to fight each other over their countless patents, it's quite possible that neither of them would survive. Siemens holds so many patents that IBM can't ensure that none of its products "infringes" upon them, and vice versa. Each company could attack many of the other company's products with patent "infringement" allegations. The mere cost of the lawsuits would amount to billions, and customers would run away in spades. So like the Americans and the Soviets, they'd never pull the trigger.

Between the large corporations, there are formal and informal non-aggression pacts concerning patents. Formal means: They sign a "cross-licensing agreement", under which each party is officially allowed to use all of the other party's patents, or a so-called "covenant not to sue". Informal means: They don't sign anything but there is an understanding that they won't do any harm to each other.

Cross-licensing deals show the absurdity of the patent system. Large companies give each other, i.e. their biggest competitors, full access to their entire patent portfolios, but still pretend that patents were necessary to protect innovation. Real protection is not cross-licensed. Could you imagine a book publisher allowing his biggest competitor to publish all of his books? It would be suicide.

Click to read why patents are unjust and favour big business over innovative SMEs