ACN v. GW: Why I Hope Guidewire Wins Against Accenture

Let me first say that the one exception to my wish is that if Guidewire has in fact infringed on Accenture’s patent or other property rights. If that’s the case, I hope Guidewire loses. I just don’t think there has been any infringement, nor do I know anyone else in the industry who thinks there has either. Do we bystanders have any way of knowing that for sure? No, and that’s why I state this potential exception.
Having stated my exception, let me also say that I do not favor Guidewire as a company over Accenture. I respect and admire both companies and I hope they both continue to enjoy success in the marketplace. And to sound a personal note, I know and greatly admire Vic Guyan, the Accenture partner who was largely responsible for their claims system and whose name is on the US Patent and Trademark Office paperwork as the lead Accenture person (see the front page of www.InnovationInInsurance.com for the link to the USPTO file). Although Vic is now retired and I seldom interact with him, I treasure my friendship with him. Vic is widely known for his keen intellect and his solid integrity. He has every right to a patent for his outstanding work, and Accenture has every right to protect it.

Why then do I – and many other people – hope that Guidewire wins? Because we 1) find it illogical that Guidewire would attempt to copy the Accenture work, and 2) an Accenture victory would supress innovation in our industry because firms – - especially smaller ones – would be discouraged from developing new systems where any larger firm held a patent. Let’s take these reasons one at a time.

First, it’s illogical that Guidewire would have copied Accenture’s invention. There would be no need to do so. Moreover, it would have stifled the creativity of the developers. There is so much need for automation of insurance business processes that you simply map the process, design the system, and start coding. Consulting someone else’s work just slows you down. My fear would be that someone versed in patent law but not in insurance claims would look at the two systems, see similarities, and conclude one was copying the other. However, the far more likely reason for the similarities would be that claims processes are claims processes and if you’re going to automate them with information technology there are common best practices. Put two teams of developers in separate rooms, tell them each to develop a claims, or some other insurance, system using state-of-the-art technology and the systems are going to look alike to some degree. I have no doubt that there are similarities between Accenture’s system and Guidewire’s; I just doubt that those similarities are the result of imitation.

Second, an Accenture victory would discourage innovation. We’d have a situation where large well-heeled companies would obtain patents and that would make those domains off-limits to conpanies with more limited resources. The way you usually protect yourself in court against an accusation of intellectual property theft is with “prior art.” But if you develop your system at the same time as, or after, the larger firm, you can’t have any art that is prior. Innovation is not the sole province of start-ups, but start-ups HAVE to innovate to become viable. If we discourage them from innovating, we discourage them altogether. It’s not healthy for the industry that rich companies get to cordon off whole areas – such as claims – because they have enough cash to procure patent exclusivity because the Patent Office doesn’t know enough about insurance to distinguish between a fundamental of insurance process and a unique way to automate it.

In summary, I believe innovation in our industry will be encouraged by a Guidewire victory and discouraged by an Accenture victory. We don’t need any company to have a monopoly on new claims systems…or any other insurance systems.

Tags: Accenture, Guidewire, insurance innovation, insurance software insurance technology