The Indistinguishable Threat

In software development, patents intended to protect innovation have morphed into strategic assets within a high-stakes game theory dilemma. As Jason Willems observes, offensive and defensive patent portfolios appear identical externally—a patent filed purely for self-defense looks no different from one amassed for litigation. This ambiguity triggers an unavoidable escalation loop where companies must accumulate patents simply because competitors do.

"Actions taken for protection are indistinguishable from actions taken for aggression. Once that condition holds, escalation is difficult to avoid," notes Willems.

The Escalation Engine

The vulnerability varies by company size but universally incentivizes accumulation:
- Startups: Face existential risk from a single lawsuit; even successful defense incurs crippling costs.
- Scale-ups: Litigation frequency increases with growth, demanding patents as deterrence.
- Tech Giants: Engage in tit-for-tat filing sprints, interpreting rivals' patents as potential threats. When one accelerates filings, competitors assume offensive intent and respond in kind—regardless of actual motives.

This dynamic propagates across the ecosystem. Firms without portfolios recognize their exposure and join the race. Patent volume balloons independently of innovation, as obvious concepts get claimed simply to mitigate risk. Non-practicing entities ("patent trolls") exploit this environment, launching broad lawsuits against defenseless targets.

Partial Fixes, Persistent Flaws

Three workarounds exist but fail to resolve the core dilemma:
1. Defensive patent pledges: Mutual non-aggression pacts between large firms reduce direct litigation but don’t curb accumulation incentives.
2. Open standards coalitions: Initiatives like AV1 video codecs protect participants when major patent holders collaborate. However, they require unlikely industry-wide alignment and leave legacy systems exposed.
3. Cross-licensing agreements: Function like arms-control treaties between specific companies but exclude outsiders and perpetuate filing incentives.

None address the system's foundational flaw: In software, where ideas spread rapidly and overlap unintentionally, patents create a security dilemma where defense mimics offense. The result is a decoupling of patent volume from genuine progress—a system that protects portfolios more than innovators. For developers, this means navigating minefields of overlapping claims while building products, where today's "novel" feature might already be someone else's legal ammunition.

Source: Jason Willems (http://www.jasonwillems.com/technology/business/2025/12/05/Patent-Game-Theory/)