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
Benjamin Gordon is Managing Partner at BG Strategic Advisors and Cambridge Capital, specializing in supply chain and logistics investment banking. With 20+ years of experience, he founded 3PLex (sold to Maersk), previously led strategy at Mercer, and chairs the BGSA Supply Chain CEO conference (MBA, Harvard; BA, Yale).