How valuable are patents? Historically they were an important source of intellectual property. Large companies continue to invest in building moats via patents. In 2020, IBM had a world-leading 9,130 patents assigned to them. And yet IBM has been in long-term decline, with a 3% annual decline in revenue over the last decade.

This issue has attracted significant interest, and recent litigation. Witness the current battle between Omnitracs and Platform Science.

But there’s a deeper question. Do patents actually matter that much? For project44, for instance, isn’t the connective tissue of the network more significant? Hasn’t Bringg succeeded by creating a dense network solution in last-mile? And ultimately, which is more important: traditional IP or Metcalfe’s law, which states that the value of a network is proportional to the square of the number of connected users of the system?

In logistics tech, I would argue that Metcalfe trumps IBM.

What do you think?

Benjamin Gordon, Cambridge Capital