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  • Do Patent Lawsuits Make Tech Gear More Expensive?

    December 9th, 2011

    So almost every day, you hear about the status of one of those ongoing lawsuits in the tech industry. These days it’s Apple versus someone-or-other or one of those someone-or-others versus Apple. The legal skirmishes are largely focused on the iPhone, iOS and the iPad, with Apple insisting that their intellectual property is being violated by the knockoff du jour.

    At the same time, you have to wonder how companies with supposedly smart engineers and lawyers manage to commit so many supposedly egregious offenses. Surely they’ve had the time to compare their new products with those of other companies, and there should be an in-house computer database of patents so they can see the areas in which they might conflict.

    On the other hand, it may well be that there are so many patents in force that it’s nearly impossible to ever know which ones you’re violated. You roll the dice, hoping your product or service will escape notice, well maybe.

    But it seems to me, and I’m not a patent attorney, that some are so simple and so obvious that it makes no sense for patent agencies to grand exclusivity. Take, for example, Amazon’s famous 1-Click ordering system. On the surface, it comes across as supremely logical. Click once after adding an item to your shopping cart, and the order is placed. Behind the scenes, Amazon and other vendors who use the system are charging your credit card or initiating a transfer from your bank account, and using your specified shipping address with which to send your merchandise, if you aren’t just ordering a service, such as a streaming video or MP3.

    The logistics of performing a 1-Click transaction are said to be fairly easy, involving cookies and other traditional Web tools. So the question arises: What raises this feature to the level of a technology that’s sufficiently innovative to grant someone a patent?

    Of course, other companies have opted to pay the piper rather than fight. Even Apple licensed 1-Click to handle their online transactions. Of course that happened in 2000, when Apple wasn’t exactly a financial powerhouse, so maybe they felt it would be cheaper to just send Amazon a check.

    So what was the United States Patent and Trademark Office thinking when they decided that 1-Click was something special, something unique, something that deserved a patent?

    But that’s not the only example of what strikes me as foolishness. Consider TiVO and their almost endless lawsuits against Dish Network, which was eventually resolved to the former’s favor. The feature? The ability to record one TV show (or Pay-Per-View movie) while watching another. It seems so eminently sensible that it’s hard to imagine any one company getting exclusivity. However, it may also be true that the underlying process proved difficult to perfect, and thus TiVO deserved that patent. Certainly most of their income these days comes from licensing rather than the sale of those DVRs, so it all makes sense, I suppose.

    However, some intellectual property claims do seem a tad curious. It seems to me that Apple might be going overboard in attacking competing companies, particularly Samsung. Consider the shape of a smartphone or an iPad. The argument is that, viewed from a distance, Samsung’s tablet and an iPad seem almost the same. Perhaps. But now look at ten 50-inch flat panel TVs from a distance where the manufacturer’s labels aren’t readily discernible. How different do they look, really? The same can be said for any number of generic PCs.

    But a TV isn’t necessarily an equivalent example, since many of these products actually use identical internal parts. The LCD and plasma panels installed inside TVs from many companies are really sourced from only a few. Other internal parts may also be generic, although each manufacturer may build unique silicon to cover signal processing, menu displays and other features that are meant to stand out from the crowd. No doubt there are patents covering many of these features.

    When it comes to the PC box, however, most parts are the same, from processors, to graphics chips, hard drives, solid state drives, and optical drives. To compete with the MacBook Air, Intel has created and is licensing an Ultrabook reference design. A PC maker only has to essentially duplicate the blueprint using the same or similar components, put their own branding on that box and call it their own. That, alas, is true for most PCs these days.

    What bothers me about the whole thing, however, is how much time and money is wasted defending intellectual property. Apple is clearly investing many millions to defend their intellectual property. And while they deserve to protect their patents, you have to wonder if the agencies who grant those patents might do well to consider raising the bar. To be protected, an invention has to be unique, not just a minor variation of what came before, or something that, on the surface and below the surface, is so simple it hardly makes sense to grant ownership of that design to a single individual or company.



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    6 Responses to “Do Patent Lawsuits Make Tech Gear More Expensive?”

    1. jfutral says:

      I wish patents, especially current technology patents, could be written in a way that makes what is being patented clearer. I keep reading these articles, primarily giving weight to FOSS (since he seems to be the most impartial and without the click-bait rhetoric considering rulings are rarely ever as cut and dried as many “headlines” make it sound), and most of the time not only is the patent unclear, but how the accused used the patent is never explained clearly.

      It doesn’t help that patents are never as simple as one would think. Take your 1-Click example. There were many parts to that patent and (according to Wiki) many of them were eventually rejected.

      It also probably doesn’t help, today more than ever, that each country or region has its own system. For instance, (again according to Wiki) the 1-Click patent has not been granted in Europe.

      I still argue that ‘obvious’ is subjective and something is often only obvious in hindsight, which makes me ask if it is actually all that obvious to begin with. Sure we say 1-Click is obvious now that someone came up with it.

      Joe

      • AdamChew says:

        There is nothing magical about 1-click, isn’t it obvious to click a notation to enable it so what makes it an innovation.

        It should never be allowed to be patented.

        It s time to make conditions for a patent to be valid and not allowed patent trolls to exist.

        Yes 1-click should not and never be patented.

    2. Kaleberg says:

      The best source of ideas for new patents is the old technical literature. A lot of ideas that were completely obvious back in 1965 or 1975 are now novel and state of the art. (The Amazon one-click patent was just the old Stanford AI Lab Prancing Pony beer and peking ravioli vending machine with a virtual button instead of an electromechanical one. The TiVo patent was an unavoidable artifact of the sound management system built for the old Spatial Data Management System.)

    3. dfs says:

      The simple answer to Gene’s question is, “yes, of course patent suits make tech grear more expensive.” Lawsuits, even those of the most frivolous kind, cost money to litigate, and who else but the consumer and maybe also the stockholder are ultimately stuck with the bill?

      • jfutral says:

        @dfs, Seems the stockholder would be more directly “stuck” with the bill, since this is probably considered an operations expense rather than cost of goods. The cost per unit gets amortized down as sales increase. Licenses of patents would be more of a direct cost of the tech gear to the consumer.

        Joe

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