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Welcome to Patent Soup

Hardly a week goes by without yet another story about some sort of patent fight involving Apple. Sometimes it’s a company that bought up a bunch of intellectual property portfolios and is hoping for lucrative pay days to make the investments worthwhile. They don’t actually produce products or services; they just collect royalties. But other actions involve claims from “real” companies that believe (or claim) that someone else is stealing what’s rightfully their’s.

I have not begun to consider the actions from Microsoft co-founder Paul Allen. Does he really need the money?

In the mobile phone industry, there are loads of interlocking patents covering various and sundry technologies that are owned by companies that include handset makers, chip makers, and even the carriers themselves, though they’re best at leveraging the inventions of others, and getting you to sign a service contract.

Apple is currently embroiled in a whole mess of confusing actions that include Nokia, Motorola and HTC. In each case, one accuses the other of stealing their property, mostly without granting the appropriate royalties.

Unfortunately, patent law, particularly in the U.S., is a mess. It appears to be all-too-easy to get approval, and some inventions are so general and wide in scope they can cover most anything, which makes it near impossible to avoid infringing on something.

These days, companies will often file patents as a defensive measure. If they don’t get there first, someone else might beat them to the punch, and thus they might end up paying big wads of cash to someone else should they decide to go ahead and produce the product or service that’s covered by that patent.

That explains why Apple will often file patents that don’t seem to apply to any known product. Indeed, the Apple watchers out there will watch those filings hoping for clues about some forthcoming iconic gadget that’ll soon be available in a store near you. However, it may well be that nothing will ever come of that invention, or it’ll manifest itself somewhere down the line in a totally unpredictable fashion. It doesn’t matter. Apple has to protect themselves from the wolves circling the corporate campus.

In an ideal world, I suppose patents would only be granted for truly original inventions that differ considerably from what came before. But it’s hard for overworked bureaucrats to know what a few pages of charts, design instructions and technicalities might actually represent. Sometimes it’s easier to just grant the patent than take the time, with a severe backlog of submissions, to figure out what it all means.

I won’t even attempt to decide whether Apple should win or lose against all those competitors with whom they’re embroiled in those mobile intellectual property disputes. It may well be that some actions are strategically taken to ward off others, or to delay shipment of someone’s competing product. It’s not always a clear-cut case of right versus wrong. Often, the gray areas are so muddy that jurors may have to toss coins to make sense of any of it.

In the end, most of these patent disputes end up with out-of-court settlements — they say, “let’s make a deal,” as some of the characters in legal dramas often do. Sometimes there’s no guilt admitted. One company agrees to pay the other a lump sum or royalties to resolve the dispute. There are no responsible parties, just payer and payee.

Sometimes one company will play a game of “chicken,” where they keep the case going by filing mountains of countersuits and paperwork, in the hope that the other party will eventually give up and go away. Even if one party loses, there are those inevitable appeals that can take a case through a number of courts at different levels in the justice system, not to mention consuming years of filings and loads of cash to the attorneys involved.

A telling example is TiVo Inc. versus EchoStar and Dish Network. In 1998, TiVo was granted a patent for its “multimedia time warping system.” This is the technology that set the standard for time shifting, allowing you to record one show, while viewing another. These days, most set top boxes actually can record two shows, while you watch a third.

TiVo won the original lawsuit in 2004, and EchoStar ended up paying them several hundred million dollars, but is still appealing the case. Unless there’s a final settlement somewhere along the line, there’s no telling how long it’s going to last, but the outcome could have severe repercussions on Dish Network, particularly for those who use their set top boxes to time shift TV shows and movies. That capability might have to be disabled. At the same time, the original action covered gear that’s long out of production, and newer models supposedly have a workaround that is designed to avoid possible infringement.

As you see, patent cases are confusing, confounding, but ultimately lucrative for both winning and losing counsel. Of course, those of you who live in countries where such protracted legal nastiness isn’t allowed are probably just shaking your heads about all of it.