The Industry of Bad Feelings

Some weeks ago I wrote a post, The Industry of Good Feelings, about Silicon Valley's unique esprit de corps – how it has long been the kind of place where industrial rivals say nice things about one another and even openly use one another's products.

At the end of that post, however, I noted that the spirit I described might be eroding. I wrote that I was worried intellectual property law "may be playing a role in making Silicon Valley less about hat tipping and more about fist clenching."

I'm now more concerned than ever.

Since I wrote that post, the $1 billion verdict that came down in Apple's lawsuit against Samsung for patent and trademark infringement. Vitriol flowed. Samsung/Android partisans generally accused those at Apple of being bullying cowards, while Apple-siders fingered Samsung/Android folks as cheap thieves. Those themes, dressed up in slightly nicer language, were even voiced by the litigants themselves in their official statements, with Apple saying "stealing isn’t right" and Samsung calling out Apple for "manipulat[ing]" patent law to get "a monopoly over rectangles with rounded corners."

That doesn't sound like an industry of good feelings.

In 2012, intellectual property lawsuits seem to be moving to the center of the Silicon Valley zeitgeist. Apple v. Samsung is just one. In March, Yahoo sued Facebook for patent infringement. And in May, Oracle went to trial, ultimately unsuccessfully, against Google, seeking billions of dollars for copyright and patent infringement.

All of it has led to rancor.

Consider the Yahoo v. Facebook lawsuit. Even though it ended quickly with the announcement of a new partnership between the two companies, it sent ripples of ill will through the valley.

David Sacks, founder of social-networking site Yammer, got so irked about Yahoo's claim that in March he tweeted, "Yammer will never hire another former Yahoo employee who doesn't leave in the next 60 days."

He later recanted – partially – telling Business Insider that he didn't want to "beat up on the rank and file." But he said he was serious about applying his employment ban to any board members, managers, and lawyers coming from Yahoo.

Theoretically, IP increases industrial productivity by fixing perceived problems in a purely competitive marketplace. An intellectual property entitlement is a license to sue, allowing a company to use the courts to keep would-be rivals at bay. As such, it's intended to be an inducement to technological progress.

Yet for decades, Silicon Valley got along fine without intellectual property playing a leading role. In great part, that was because of a lack of potency in intellectual property claims in the tech arena, particularly with respect to software. But that has changed. In recent years, patent, copyright, and trademark law have all grown markedly more plaintiff-friendly. Consequently, the law has been presenting Silicon Valley with the opportunity for increasingly powerful claims over ever more abstract subject matter.

One way to state the case for intellectual property laws is to say that good fences make for good neighbors. Fair enough. But razor-wire, trip guns, and landmines don't. And IP is increasingly like that, where a small misstep can bring on an onslaught of liability.

It's a situation that puts everyone on edge.

If litigation comes to dominate the tech industrial landscape, not only will it exact an economic price, it threatens to damage Silicon Valley culture as well.