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  • Haven’t We Had Enough Patent Lawsuits?

    July 20th, 2012

    I find it more and more difficult to read about the daily patent soap opera being played out around the world. First Apple wins this case, and loses another. A British judge recently instructed Apple to run ads stating that Samsung’s tablets didn’t copy the iPad. This decision evidently comes in the wake of a recent decision that Samsung didn’t infringe on any Apple patents. Of course, other judges in other countries ruled that they did.

    Now I have to tell you that this legal by-play is quite confusing. While some of the patents seem to contain fairly clear details about what’s covered, some of the inventions are extremely arcane. You have to think that a small company would be forced to hire expensive patent attorneys to make sure they aren’t infringing on someone’s intellectual property. But this isn’t easy to decide regardless, which is why we have this company suing that company, and there seems to be no end in sight.

    I read a published report the other day indicating that Apple and other companies spend more money on legal fees, and patent licenses, than on R&D. With Apple, it’s just a drop in the bucket regardless, but smaller companies could sink when they are inundated with such expenses.

    The most troubling issue is just figuring out which, out of thousands and thousands of patents, may cover what appears to be a new innovation from a company’s product developers. And since so much of it is subject to legal interpretation, you are lost in gray areas that, in the end, very likely discourages a lot of innovation. At the very least, companies are forced to file patents defensively, not because the invention will ever see the light of day in a real product, but because it might, and they don’t want to be caught flat-footed. Apple appears to do that quite often, witness the news about various patent filings that seldom show up in real products.

    Even then, you can see where even the largest companies are often on the losing end. Apple had to make a big settlement with Nokia over patent rights. In the early days of the iPod, Apple also had to write a big check to Creative Labs that covered patents supposedly infringed on with Apple’s best-selling music player.

    Now surely Apple didn’t intend to violate those patents, and I do not think they just took a chance hoping it would turn out all right. More than likely, teams of attorneys examined each and every element of the iPod’s design to determine whether existing patents were covered, and, if so, to prepare to license those patents. But they missed a few. With Nokia, it was very much about industry-standard patents and fair licensing fees.

    As some of you may know, many companies who build smartphones and tablets powered by Google’s Android OS have to pay through the piper to Microsoft for various and sundry licenses. Some suggest that Microsoft may earn more than Google from Android, which would be a curious situation. Indeed, if that’s the case, Android license payments may also deliver more revenue to Microsoft than licenses for Windows Phone. Now that IS weird!

    In his final years, the late Steve Jobs threatened to go thermonuclear over Google’s alleged infringement of Apple patents for Android. In defending themselves against Apple’s lawsuits, such companies as Samsung and HTC are, in a sense, serving as proxies for Google. One key reason that Google bought Motorola Mobility was not to acquire a failing mobile handset and tablet maker, but to get ahold of a large patent portfolio that also included a number of industry standard inventions.

    Now some suggest that maybe the patent authorities are being a far too lax in rewarding patents to applicants for inventions that, well, seem a little too generic or even obvious. Amazon, for example, owns the one-click ordering system. You have that same system in use at Apple’s online store and elsewhere, but in every case, those companies had to sign up with Amazon to license the rights.

    I don’t pretend to be a lawyer, and I don’t play one on radio and TV, but I have to wonder why Amazon won the one-click patent in the first place. The fundamentals seem far too generic that it’s hard to believe that any single company can claim to have been there first.

    There is now a new patent law in the U.S., the America Invents Act (or AIA), which is supposed to fix some of the problems. But there is a curious provision where a patent is granted not necessarily to the company who uses it first, but the company who files first. In other words, AIA moves from “first to invent” to “first inventor to file,” which surely is going to create a mad rush to file something, anything, as soon as possible, and let the patent agency sort things out.

    Unfortunately, it seems the “first inventor to file” provision favors large companies that will have teams of layers in readiness to rush applications as soon as the basics of a new invention are documented. A smaller company that doesn’t have a large legal staff at their beck and call may suffer, even though they were there first.

    Some suggest that such things as software shouldn’t even be granted patents. I do not, however, want to get into the whys and wherefores of that. However, it is clear to most of you, I am sure, that the current patent system, and even the revised version, will do little to stem the growing number of lawsuits. It’s troubling to think how many really smart inventions are never finished because of all the red tape. Is that what businesses and governments really want?

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