Innovation and Patents: Pros and Cons for Procurement

Are patents good or bad for the end consumer?  OK, that’s pretty broad…how about this specific example concerning Virgin Atlantic and Delta Air Lines:

Virgin recently filed this patent infringement case against Delta over Delta’s use of a herringbone-style seating configuration in its BusinessFirst cabin. Virgin Complaint Against Delta

At issue is Virgin’s patent, granted by the U.S. Patent Office two years ago.

The implications for travel buyers are interesting.  Virgin came up with a clever way of arranging its seats in the business class cabin.  The advantages include easier access to the aisle, and more seats in the cabin for Virgin.

Airlines invest significant sums in their seating designs, and clearly hope to gain competitive advantages by doing so.  In this case, Virgin, by virtue of its patent, has the right to exclude other airlines from copying the features covered (claimed) in its patent. Less competition means some combination of more traffic and higher prices for Virgin.

Let’s set aside the issue of whether or not Delta is infringing this patent.  The facts are not clear, and Delta likely believes that either the Virgin patent should be invalidated, and/or there is no infringement. Best guess is this will be  settled in court within two years.

More importantly, what do all you travel buyers and suppliers have to say about the pros and cons of a supplier who has patents covering elements of its offerings?

Should innovation be rewarded with this form of protection, essentially as a way to create more incentive to risk R&D funds?  Or do the implications of paying higher prices for what amounts to a monopoly on a product turn you off? Vote here and let’s see what you all think.

Want articles like these delivered to you by e-mail?  Sign up here.  It’s free, and you can unsubscribe at any time.

This entry was posted in Airlines, Innovation, Travel Procurement, Travel Suppliers and tagged , , , , , , . Bookmark the permalink.

One Response to Innovation and Patents: Pros and Cons for Procurement

  1. Michael Garvin says:

    If the airline truly has come up with an innovation – and it otherwise meets the legal requirements for a patent – allowing it to obtain a patent is unquestionably good for the buyers. If the innovation is attractive to buyers, it’s fair to charge for it. But if the airline can’t protect the innovation from competitors, buyers won’t pay for it, so the airline won’t invest to develop the innovation and it will never be available to the buyers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s