zlacker

When you make it easy to copy innovative designs, companies can really only compete on lower manufacturing costs and more advertising.[1] That's why engineering firms pushed for stronger IP protections through the WTO in the 1990's: Chinese and Korean companies were copying the designs of Cisco, etc, and undercutting them on prices because they didn't have any R&D expenses.

[1] At least when you're talking about physical products that are sold in one-off transactions for money. If you can leverage network effects or lock-in effects, or hide your innovations behind arms-length protocols, like many internet-based companies do, you're not as vulnerable to copycats.

>>rayine+(OP)
That's all true, but it still doesn't follow that patents themselves prevent competition on cost. For example, if a non-practicing patent holder licensed their patent to all interested parties, then the licensees must also compete on cost. So far as I can tell, patents were explicitly designed to allow that scenario, among others.

>>rayine+(OP)
There are more ways than that to compete when selling products that are tantamount to commodity.

With Cisco they have a head start on quality or at least the perception of quality, their products are tried and tested. There is also brand value, Cisco is the real deal, it looks dead posh in the rack for 'nobody got sacked for buying IBM' reasons. They also have supply chain advantages, e.g. a dealer network and short lead times for those dealers to get out of stock items. There is also the matter of warranty/returns.

Sure, another company can put together the customer service aspect, however, manufacturing is a very small part of the retail price of a product and it is normally the wider customer service aspects plus brand identity (which includes advertising/marketing) that makes a product succeed in the marketplace.

>>jcl+v3
The licenser is afforded the freedom to sell licenses at whatever price they choose, because they have a monopoly on the IP which is being licensed.

>>rayine+(OP)
The cisco story was about huawei pirating their software. That's copyright infringement, not patent abuse.

Copyright protection is all you need in the software space to differentiate from your competitors, because in software development the execution is a lot more important than the idea. Well executed versions of old ideas can blow away the competition. See e.g. the iphone, which did less than earlier smartphones, but did it much better. Note also that it wasn't the patents that prevented competitors from catching up, because they ended up ignoring them anyway and still took half a decade to make a competing product despite having access to the same hardware from the beginning.