Amazon’s Groceries, Mega-Cap Convergence and IPR

C’mon man! Amazon has metastasized into groceries! Here’s what’s happening: the Mega-caps are converging.

Your Google IoT control device realizes you have just closed Windows on your Mac. After checking with your fridge, she tells your Apple watch to order-out a home-delivered meal for a pre-planned dinner with a Facebook friend you mutually calendared in Microsoft’s cloud to coincide with his visit to your area. Ranked lists of meals you each have “liked” on Facebook are separately crossed-checked in Microsoft’s cloud are sent to each other’s devices. When the excellent match is found, it orders both your meals from Amazon, prepays with Apple Pay, and schedules delivery to your door by a drone one hour after your friend arrives in his self-driving Google car. During dinner, your IoT devices are busy receiving Amazon and Apple offers for discounts on a movie to be aired during the next 5 hours. Meanwhile, Google offers your friend a self-driving automobile pick-up ten minutes after dessert. You get the idea. You can sense the future of our world is just over the horizon. The mega-caps will one day control the entire consumer landscape. Their anti-patent onslaught is a symptom.

Alphabet, Amazon, Apple, Facebook and Microsoft are now America’s five largest firms by market cap. Their market power is already overpowering. Their incumbency is threatened only by each other. Their combined profit last year was $93 bn. While they were controlling Congress during the last decade, they swallowed whole 519 smaller firms. They undoubtedly smothered countless others by efficiently infringing their patented IP or by attrition if any dared to sue. Working with SCOTUS and Congress as allies they are preserving market monopsony by crushing or absorbing disruptive technology and pushing patent reform to beef up profits by beating down product component costs. But their DC alliance is uneasy. They are swirling into the converging vortex of multiple diverse product control within the marketplace. When they meet, some cannot survive. Thus, each must soon decide when and how to kill or capture the others while today’s business-friendly administration is in power.

Meanwhile as reported in today’s WSJ “Once-Flush Startups Struggle to Stay Alive.” Venture capital for US startups has declined by 30 % in 2016. In the two preceding years, 5000 U S tech startup firms raised about $75 bn., with 294 of them obtaining at least $50 mil. But since three-fourths of those have neither been acquired nor raised and capital.

These investment facts that matter. They tell us IPR is harming early stage investment. They are neither “patent/troll” narratives conjured to stampede an under-informed Congress nor are they AMICI blather intended to mislead SCOTUS into worrying about patent trolls instead of their political and market power. What matters is the growing scarcity if capital for disruptive early stage innovation for those who need it most. Only so-called “unicorns ” can afford to risk a fight with the reigning five. Time is running out. Director Lee’s recently announced review of IPR “records” and PTO’s dialogue with IPR “users” in her misdirected search for IPR “fairness etc.” will not reveal this reality. Investment trends are real, and they are relevant to patent policy. PTAB’s contribution to our economy is not worth its cost. Congress should declare IPR’s victory over “bad patents” and repeal it.

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