Patents: Means for Offensive or Intellectual Property Defense?

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Whether you are a beginner, average or power user, chances are you don’t really know much about the intellectual property, let it be hardware or software, residing in your smartphone or tablet. It’s ok! You shouldn’t really care at the end of the day because companies can rely on authorities as well as their own lawyers to protect them. Hardware and software makers have been signing agreements, licensing and cross licensing patents since the early days but only recently did the war become so fierce. It is just normal for any (person and) company to try and protect its own intellectual property by registering, licensing (if) or preventing unauthorized usage. But nowadays it seems like there’s too much suing going on!

Patents are a very powerful concept which goes hand in hand with intellectual property. While intellectual property is a creation of the mind — including and not limited to an invention, with properly recognized rights — patents represent the exclusive rights granted to an inventor (or a third person acting as an assignee) by an authority, in exchange for the public disclosure of an invention. In plain English: when you create intellectual property by inventing something you are granted exclusive rights once you wish to make it public (and do all of us a favor so that we can benefit) by patenting it. The exclusive rights acquired after patenting allow the patent owner to prevent unauthorized usage, sale, distribution and other similar actions.

Patent

Nowadays, as a direct effect of a cutthroat competition, the lines became very blurry, at least for an untrained eye, between proper, ethical and legal intellectual property protection and unfair business practices which could include legal patent actions having the competition as the main target. In a world called Utopia things would be very clear and transparent: if someone would like to benefit from intellectual property the patent owner could license it and grant legal usage rights. But with the fierce competition companies might not want to license certain patents (and they’re not even obliged to do so). As a direct effect the other company has to find a way around the patent (or invent a different approach for the same goal) if the product is to ever reach the market.

But we’re not living in Utopia and patents aren’t in numbers one would be able to finger-count. In the technology world, the one which is the fastest moving among all, chances are that there’s already a patent out there for something you want to use. It’s those cases — when someone can come up with something revolutionary and new — that are the winners.

Hardware related patents (referring to touch screens, antennas, charging, wireless, etc.) as well as software related patents (for a certain app, a portion or a representation of a software, a way of accomplishing or displaying something, etc.) are equally important. None of us would like to be in a situation where we create unique intellectual property (like software developers or even artists for instance) and we see it popping up in a slightly modified form (or not) from someone else claiming it their own. Imagine a multi-billion dollar industry and you can truly understand the relevance of patents.

At the end of the day it’s not the value of the business that matters but the basic principles at the very foundation of our society. However, as in every case where a lot of money is involved, intellectual property and patents are a solid way of making that extra (million) buck.

patent troll

We’ve all heard the term “patent trolling”. It implies the existence of a “patent troll”, which can be a person or a business entity that owns patents (usually by purchasing and not because the process of invention followed by registration) and is acting to reinforce them against others, claimed to be infringing upon them. What makes the “patent troll” a real patent troll is the fact that this entity is after a pecuniary advantage, often with no relationship to the industry and hence no intentions of producing, selling, marketing, etc. the patented invention.

However, in a broader context, companies that are de facto patent owners (meaning their creation, their invention, their patent) are often regarded as “patent trolls” because of their aggressive way of protecting patents (which almost always implies attacking the other party). Take Apple for instance, who managed to sue Samsung over smartphones and tablets in at least ten countries across the world. The South Korean phone maker is not the only one being sued. Patents involved range from the simplest – design patents, product or service denomination or the “slide-to-unlock” concept and mechanism – to the most advanced and complicated designs and constructions – like multi-touch input.

Of course, these actions are protecting intellectual property from unauthorized usage but many could regard them as being a means to an end; while there’s no doubt that certain patents are more bullet-proof than others, many regard Apple’s actions as unfair business practices when it comes to the general design patents involved in Apple’s attempt to ban Samsung devices for alleged copying of the iPhone’s outer aspect. The situation is not as easy as it looks; while we can all be emotionally involved with one company or the other, it comes down to the court (or other authorities) to objectively judge if there’s anything “dirty” involved. Microsoft, who has been signing licensing agreements with various Android OEMs, is also often mislabeled as a “patent troll”. The truth of the matter is that Microsoft, because of its business model, is making a lot of money out of these (so far undisputed) licensing agreements on patents (which also seem undisputed, judging by the ratio of agreements signed versus court actions).

263patent

Then there are those patents which are key to the operation of a device, such as the famous “‘263” patent, described by Apple as follows: “The ‘263 patent relates generally to providing programming abstraction layers for real-time processing applications. The ‘263 patent discloses the use of real-time application programming interfaces (APIs) interposed between application software or driver software and the real-time processing subsystem. These APIs provide an abstraction for the real-time processing subsystem (e.g., a digital signal processor) from the higher-level software that utilizes the real-time processing subsystem, allowing changes to the real-time processing subsystem without requiring changes to the higher-level software“. A judge recently sided with Apple in the interpretation of the aforementioned patent which could easily make a jury reach a verdict of Android infringing on it.

There are key patents which refer to network operations, such as the 350+ patents “declared essential by Nokia to second, third and fourth-generation communications standards”, including GSM UMTS/WCDMA and LTE, sold by the Finnish company to Sisvel, under FRAND terms (more on that later).

Some patents are important when considering ways for a device to achieve something. We can mention “method and apparatus in a wireless messaging system for facilitating an exchange of address information”, “system for communicating user-selected criteria filter prepared at wireless client to communication server for filtering data transferred from host to said wireless client”, “method and apparatus for communicating summarized data”, and “multiple pager status synchronization system and method”. Motorola tried (and succeeded in the end) to win an injunction against Apple’s iCloud (and MobileMe) in Germany based on these patents.

Gavel

In most cases companies seek justice in courtrooms whenever they fail to sign an amicable patent licensing agreement (because of various reasons). The main players are basically the same, big companies, market leaders that managed, throughout the years and with a lot of money and effort involved, to build a solid patent portfolio. These players rarely change and it’s getting close to impossible keeping track of all the lawsuits they’re involved in.

But unfair business practices don’t only refer to patents and intellectual property related lawsuits but also to exaggerated licensing terms proposed, contrary to FRAND. Fair, reasonable, and non-discriminatory terms need to be cumulatively obeyed by a company that is seeking to license out. They come as an obligation that is often required by standard-setting organizations for members that participate in the standard-setting process. Recently uncovered documents unveil that Motorola might be asking for 2.25% out of Apple’s sales for licensing some of its patents. While the patent holder can ask for any amount, it has to be FRAND and Apple’s lawyers are trying to convince courts that the amounts are exaggerated.

There are exhaustive patent and intellectual property aspects, often beyond basic comprehension of anyone who is not specialized in IP law, let it be national or international. At the end of the day, it comes down to defending intellectual property as a creation of the mind. While some cases might sound hilarious at first we should not go down a road where we laugh these otherwise legal attempts off.

The world we live in (the one where smartphones, tablets, displays, antennas, batteries, operating systems, applications, network operation, software and hardware dominate) is a very complex – and very dynamic – one. Add a couple of billion dollars in the equation and you have a recipe for a long and complicated lawsuit (and existence). However, at the end of the day, the users are the ones who benefit. IP and patents, intellectual creation in general, drives evolution. Companies are constantly seeking new ways of achieving development, improvement, innovation. These efforts, as well as their fruits, need to be protected and, if a cordial licensing solution can’t be achieved, it is the law’s and the lawmaker’s duty to defend them.

Patent troll image: Bob MacNeil

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About The Author
Anton D. Nagy
Anton is the Editor-in-Chief of Pocketnow. As publication leader, he aims to bring Pocketnow even closer to you. His vision is mainly focused on, and oriented towards, the audience. Anton’s ambition, adopted by the entire team, is to transform Pocketnow into a reference media outlet.