Steve Jobs Demonstrates Everything That's Wrong With Our Patent System

Well, not quite everything. But it's hard to imagine a blunter demonstration of how in Silicon Valley, patents are now little more than munitions for warring tech giants than this newly public email exchange between Jobs and former Palm CEO Edward Colligan.

The back and forth was revealed in an affidavit (embedded below) that Colligan submitted in a  lawsuit that accuses Apple and several other companies of striking an illegal bargain not to recruit or hire each other's employees -- a giant no-no under antitrust law. Colligan claims that Jobs called him in late 2007 and attempted to bully him into a no-poaching deal by threatening to rain down patent suits if Palm refused to go along with the scheme.

In a lengthy email contained in the court filing, Colligan more or less politely tells Jobs to shove it. "I want to be clear that we are not intimidated by your threat," he writes. "Palm has a very robust portfolio of patents, having been in the handheld and smartphone businesses since the early 90's....If you choose the litigation route, we can respond with our own claims based on these patent assets, but I don't think litigation is the answer. We will both just end up paying a lot of lawyers a lot money."

Jobs then responds with a bit of chest puffing: "I'm sure you realize the asymmetry in the financial resources of our respective companies when you say: "We will both just end up paying a lot of lawyers a lot of money.'" He goes on to belittle the massive patent trove Palm purchased when it acquired former Siemens handset maker BenQ as "not great," and notes that Apple had taken a pass on the assets. "My advice is to take a look at your patent portfolio before you make a final decision here," he finishes.

This isn't even the equivalent of negotiating with a gun on the table -- it's less subtle than that. Jobs wants to push another competitor (and back then, Palm was a competitor) into an ostensibly illegal agreement, and so he threatens to wage an expensive court battle. Over what? Who knows. Both companies have an arsenal of vaguely worded patents, and could probably find something to sue over if they looked hard enough through their files. The fact that Jobs didn't follow through on the threat isn't what's important here: It's that he felt it was credible in the first place.