This Month's Spectrum Summary:

(The following is an excerpt from the November 2007 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2007)

Problem Patents and Industry Fun:
Time to Mull the Significance of the Connection

This month we meet with consultants Patti Williams, Marco Boer and Mark Hanley to explore the connection between what looks like some significant patent issues and the overall state of the industry. We look briefly at several trends that signal a maturing industry. Some people, who have been energized by the excitement of pioneering young, fast-growing markets now may be finding these trends are taking away what we might term "fun." One of these trends is increased pressure on financial results. In the US there are more regulatory pressures such as the 2002 Sarbanes Oxley Act.

There is increasing domination by large corporations with a wave of acquisitions driven in part by slowing growth. In the near future, as a result, it is expected that we will see a number of top executives in the industry retiring, feeling the entrepreneurial spirit of their jobs has disappeared. There is still growth and new opportunities opening up, but it is felt that the industry has reached a crest in terms of growth. There may be a dip, but then a new cycle of growth. Already we see digital competing more directly in the dominant analog world, including screen and offset.

We next look at the patent picture and whether some recent problem patents could have any significant impact on the overall market. Specifically, there is first, the fact that the sheer number of patents being filed is out of control, especially in the US. Then, more troubling, are what appear to be U.S. patents on applications. One is the Masonite patent on digitally printed doors, and the other is a patent for digitally printed stairs. Neither of these involves anything we might describe as an "invention" or technology.

These cases are somewhat isolated to date, and opinions differ as to whether they could trigger a wave of fear that could inhibit market growth beyond these two applications. Also, it is mostly a possible problem in the US since Europe and other countries have quite different patent systems.

No one is yet into panic mode, we hope. But at some point that could change unless the potential problems are addressed. Our job, in part, is watching for danger signs that might contribute to a loss of what some experience as "fun." This, after all, might be seen as part of the energy that fuels the vitality of this or any industry.