Apple’s recent US$ 1 billion damages award against Samsung was world news. In case you missed it, a California court found that Samsung had, in its Galaxy 10.1 smartphone, infringed various patents belonging to Apple. These patents related to various features that are to be found in Apple products, including the ‘bounce-back response’ which makes lists jump back, the ‘pinch-to-zoom’ feature which the user uses to magnify images, the feature which allows the user to zoom into text by tapping their finger, and the overall appearance of the iPhone (including the system of displaying text and icons), which is protected by way of design patents. A further hearing is scheduled later in the year to deal with the issue of a US sales ban on the Galaxy 10.1. Whatever the final outcome is, it’s likely that there will be an appeal.
Samsung has a separate patent infringement action pending against Apple, also in California. This relates to the alleged infringement of two so-called ‘standards patents’ and six so-called ‘features patents’ (with a standards patent it is possible to get a compulsory license, but with a features patents it is not). This case was initiated in April 2012 and it relates to innovations that Samsung claims were unlawfully used by Apple in the iPhone, iPad and iPod Touch products, and now also appear in the recently-released iPhone 5. These innovations relate to a method of synchronising photos, music and video files across several devices, and a method of capturing and sending video over the internet. The case will probably only be heard in 2014.
It won’t have escaped your attention that there is an extraordinary amount of patent litigation in the area of smartphones and tablets, and the operating systems that power them. Apple and Samsung have themselves been involved in litigation in other countries including South Korea, and companies like Motorola and Google have also appeared in the courts of various countries. It’s hardly surprising, given what’s at stake: the global smartphone market is apparently worth some US$ 219 billion. As a result, the major players have built up massive IP portfolios – patents for their technical innovations, and design registrations for the appearance of the products. Just how big are these portfolios? Well, Samsung is said to have some 30 000 patents in USA alone. A practice that has developed is that of ‘trolling’, which means acquiring patents for the sole purpose of enforcing them rather than using the technology. These IP portfolios are proof positive that in the electronics arena, IP is very much name of the game.
What all this litigation has done is sparked an interesting and perhaps much-needed debate about where patent law is going. A highly-respected US judge and academic by the name of Richard Posner, who was in fact the presiding judge in a patent infringement involving Apple and Motorola, has been arguing for some time that there is something very wrong with the system. The thrust of Posner’s argument is that the law needs to distinguish between different types of inventions. Posner feels that the 20-year term that is granted to patents is eminently justifiable in the case of pharmaceuticals, which he describes as ‘the poster child of the patent system’. He justifies this on a number of grounds. With pharmaceuticals there is a huge development cost, both in term of research and in terms of testing. The testing, in fact, frequently eats into the period of protection granted by the patent. And with pharmaceuticals, the products are normally around for decades.
But different considerations, argues Posner, apply in other industries, which often need and deserve less protection. Says Posner: ‘The standards for granting patents are too loose...My general sense... bolstered by an extensive academic literature, is that patent protection is on the whole excessive and that major reforms are necessary.' And most controversially: ‘Most industries could get along fine without patent protection.’
Whether or not communications devices is one such industry Posner doesn’t say. But he does make it clear that, in his view, smartphones and tablets are a far cry from pharmaceuticals. In the first place, argues Posner, the cost of invention is low. Second, improvements are made as a matter of routine. Third, the lifespan of the product is generally short. In fact, argues Posner, in this area being first to market is all the advantage you need. Says Posner: ‘Nowadays most software innovation is incremental, created by teams of software engineers at modest cost, and also ephemeral – most software innovations are quickly superseded...Software innovation tends to be piecemeal – not entire devices , but components, so that a software device (a cellphone, a tablet, a laptop etc.) may have tens of thousands of separate components (bits of software or bits of hardware), each one arguably patentable. The result is huge patent thickets, creating rich opportunities for trying to hamstring competitors by suing for infringement – and also infringing, and then challenging the validity of the patent when the patentee sues you.’
Posner makes some interesting points. However, from the technology companies’ point of view, spending large amounts of money on a new technology can be risky if that technology is expensive to develop and easy to copy. In this regard, patents provide a safe zone within which to make such investments,
In view of the above, whether or not Posner’s arguments will lead to any substantive changes to patent law remains to be seen. Given the power of the companies that dominate this area, I have my doubts.