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The era of patent wars

Rampant IP litigation stifles innovation

Business Standard 

In the past year, a tsunami of intellectual property (IP) lawsuits has meant that the battle for market share in the personal technology space has shifted to the courts. Apple and Samsung are perhaps the most high-profile opponents. The two companies are in face-offs across at least 10 national jurisdictions, where they have sued and counter-sued each other for diverse patent violations. At last count, there were over 30 cases involving these two companies. But there are other, equally large players. Facebook and Yahoo have sued and counter-sued each other. Microsoft and Motorola Mobility are adversaries. Motorola Mobility is also suing, and being counter-sued by, Apple. Kodak has sued Apple and HTC. Oracle has sued Google. Skyhook has sued Google. Microsoft has sued Barnes & Noble. S3 Graphics has sued Apple. Nor is this an exhaustive list. Many cases have co-litigants. There are other IP-related cases involving other majors, like Intel and Viacom. There are shifting alliances. Corporations are sometimes lined up on the same side and sometimes against each other.

There is also a trend of merger and consolidation, which further fogs analysis. Google, for example, is in the process of buying Motorola Mobility, and HTC is taking over S3. Some cases focus on obscure and arcane details. Other cases may appear frivolous to the layperson. Kodak, for example, claims its image preview and image transmission IP has been violated. Skyhook alleges Google’s muscle has driven Skyhook’s competing phone-location technology off the Android platform. Samsung and Apple have counter-claims about their respective methods of offering multiple mobile services and integrating web browsers with phones. Apple also has a patent on designing rounded corners and claims Samsung has violated that by “slavishly imitating” its design.

Obviously, anybody who does design a new feature, or a smarter and more efficient way to deliver an existing feature, would like to protect that. Patents are supposed to encourage research and development. An innovator who receives a patent hopes to receive future revenues while fending off those who could otherwise reverse-engineer the same innovation. But an indiscriminate grant of patents and the complexities of their global application also encourage patent trolling. One could argue that it is stretching common sense to award a patent for designing rounded (or spiky, or arbitrarily-shaped) corners. “Business method” patents such as Amazon’s famous “1-click” transaction have also been treated differently in various jurisdictions. Some sharp operators specialise in buying up obscure patents and then threatening litigation rather than running businesses. The calculation is: sooner than undergo litigation, many companies will just settle up. The rising tide of IP litigation could actually lead to an innovation roadblock. This would mean an unnatural, unhealthy concentration of IP firepower in the hands of existing businesses with large legal departments. New under-funded businesses don’t possess the resources to search for, and avoid the violation of, existing patents. It is also difficult for, say, an Indian company to search for, and apply to, different patent offices in different jurisdictions for patent grants. Somewhere, somehow, a balance needs to be found between patent protection and patent trolling, and it needs to be made to work globally.

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First Published: Thu, April 12 2012. 00:10 IST
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