Yet another case study that shows how IP[1] laws are used by incumbent players to stifle innovators. Even trademark laws, which in principle are the least onerous type of IP, lead to million dollar lawsuits in practice (and apparently that's in a less expensive jurisdiction). Also, this story seems to agree with other anecdotes I've heard about the dangers of rejecting acquisition offers from large competitors; there is a high risk of them cloning your product/strategy or using the legal system as a weapon (in this case, it appears both tactics were used).
This is a street with two ends, and it looks different depending on your point of view.
And yes all IP laws (copyright, trademarks etc) exist to both stifle and encourage innovation.
To be clear, _copying_is not innovation. And trademarks are the easiest to innovate in such that you don't infringe. For example Lindows was a clear case of "not innovating" and MS protected their trademark. Personally I don't believe you can trademark a common word (match) but when you enter a space its not terribly clever to use a compeditor name as part of your name.
Regarding acquisition, of course product cloning is an alternative. Little guys clone big guys, big guys clone little guys, everyone clones everyone all the time.
And yes the legal system can be used as a weapon, by big and small against big and small.
To this you can add theft of trade secrets disclosed while having talks and a bunch of other risks when in the process of acquisition. If you're going down this route specialist advice is recommended.
> For example Lindows was a clear case of "not innovating" and MS protected their trademark. Personally I don't believe you can trademark a common word
If you don't believe in trademarking a common word, the Windows trademark wouldn't be valid and Lindows would not be infringing.
I've always found the idea "ip laws encourage innovation" to be tenuous; if only because we have very few case studies of societies where ip laws aren't as strong as they are today (so, in scientific method terms, there is no control group). If anything, China may be one of these case studies, and while its certainly a highly debatable topic, I think its reasonable to say that they're doing alright (certainly not by western IP laws standards, but that's the point).
More broadly & theoretically: Nothing is necessary to encourage innovation. Innovation Happens; its a by-product of both human nature and capitalistic economic systems. Creativity-based IP (ex: developing a cool new video game character) is most often a by-product of necessity in human nature to express ones inner creativity. Technology-based IP (ex: developing a new drug) is most often a by-product of necessity in market-based economic systems; if enough people exist to buy it, it will be developed.
Secrecy, as it exists today within a non-legal context, would still exist without any IP protection, and is generally adequate to reach first-to-market. In addition to domain expertise, of course.
Caveat: there's a delineation between, for lack of a better term, "product-based distribution rights" versus much more ephemeral intellectual property. For example, Disney produces Iron Man the movie, versus Iron Man the character. One is a product; the other is pure intellectual property. Or: Remdesivir the pill, versus the Remdesivir formulation and chemical structure. It makes far more sense to me that Iron Man the movie should still have access to strong legal protection, in the form of stopping unwanted distribution; but that is separate from controlling access to Iron Man the character.
Caveat: ip laws are oftentimes leveraged in a consumer protection angle (especially trademarks). Again, this feels like a situation where we started with ip laws, then said "oh thank goodness we can use these laws to protect consumers", rather than starting with the generally laudable goal of protecting consumers then working backward to arrive at laws which can do that. In other words, the argument is always "you're using the word 'match' in your company name, you're deceiving consumers" and not "you're deceiving consumers, and here's a list of reasons why, one of which is the usage of 'match' in your name". Copying a name is evidence of an offense; not an offense itself.
The issue is: Copying can be innovative. Everyone stands on the shoulders of giants, and innovation comes in many forms. There is innovation in the original creation; but original creation is not alone an application of intellectual property to benefit humanity in an equitable & accessible way. Quite literally, its the same argument as the old "ideas are a dime a dozen; its the execution that matters"; because it really is. Inventing a life-saving drug should not be rewarded; being able to produce it at massive scale, for an affordable price, should be rewarded. And free market economic systems (with FDA-like quality control, of course) do that really well.
Ideally, the same company can do both; and stepping back ip laws would actually add pressure to accomplish just that.
Final argument against: Some intellectual creations are just really expensive to produce, and may never be produced if an ROI can't be guaranteed with ip laws. There are two issues with this argument:
First: What if it isn't actually legitimately expensive to produce? IP laws are baked in to everything at this point; companies know they can charge whatever they want for some product, because they have intellectual property protection; and that means they can inflate their inefficiencies in producing it. Its similar reasoning to student loan bankruptcy protection being a reason why higher education has gotten so expensive in the US; why not be inefficient? Removing ip protection could actually increase efficiency by forcing companies to optimize research & delivery (or more accurately; inefficient companies who can no longer hide behind the shield of ip protection will be replaced by more efficient organizations who can produce the same thing cheaper).
Second: Ok; Something is legitimately insanely expensive to produce. The only great example anyone ever provides in this category is drugs. And its a good example; novel drugs can be really expensive to produce, test, etc. So, the company wants an ROI; and that means philosophically holding a gun to a patient's head and saying "you're gonna die without this, now buy it". This is not ok; and it should be somewhere that public funding steps in.
The point of this rant is not to assert change that any western country needs to implement; because we never will. More-so just an intellectual argument.
>I've always found the idea "ip laws encourage innovation" to be tenuous; if only because we have very few case studies of societies where ip laws aren't as strong as they are today (so, in scientific method terms, there is no control group). If anything, China may be one of these case studies, and while its certainly a highly debatable topic, I think its reasonable to say that they're doing alright (certainly not by western IP laws standards, but that's the point).
Actually we have a pretty good case study. Patent laws for pharmaceuticals. Before much of the world-wide "harmonisation" of patent law, different countries allowed for very different patentability of pharmaceutical "recipes". In all of Europe and Switzerland up to the 1930s (or possibly even later) therapeutical agents were excluded from patenting (although companies tried to get around this in various ways), in the US on the other hand no such provision existed. However, the vast majority of innovation/inventions came from Europe, also the investment in R&D was much higher in Europe than in the US.
All this to support your assertion that the idea that "ip laws encourage innovation" is tenuous.
While we don't have great controlled experiments, we do have some historical data to view. Here are some of my suggestions;
The Soviet Union had no way for individuals to benefit from innovation. So in most spheres they lagged the West in technological advancement. One area which did have rewards (in standard of living), rocketry, they were ahead.
During WW2 many private companies developed weapons etc for private gain. Especially in the air. While there were talented designers in the USSR, again, overall they lagged behind. I'm not saying none - there were other rewards in play - but as a proportion of population, progress overall seems slow.
If I had to hypothesise I'd say than IP laws encourage innovation via competition, whereas non-IP areas focus on innovation through cooperation - for societal not individual benefit.
"incumbent players" typically the person who uses something that can be trademarked first, wins. Match has been around forever. I don't see how this other company got a trademark. And yes it is confusing.
As far as being cloned, yeah I'm not surprised. If they can't aquire you, they will try to clone you. That is how competition works. IP laws help prevent that.
[1] I read this as "intellectual protectionism".