Patent wars plague Internet Age

Apr 15, 2012 by Glenn Chapman
A man shows the smartphone photo sharing application Instagram on an Iphone on April 10, 2012. The Internet Age is becoming known for patent litigation as rivalries spread from marketplaces to courtrooms.

The Internet Age is becoming as known for patent litigation as it is for online innovation.

From the makers of to creators of smartphones and designers of videogames, rivalries have spread from marketplaces to courtrooms with combatants warring over rights to use technology.

"For many years, there was basically a stalemate in the patents arms race with an understanding that companies wouldn't sue each other," said Colleen Chien, a law professor at Santa Clara University in Silicon Valley.

"That was disrupted by a new business model of patent assertion," she continued. "It has become acceptable to violate the gentlemen's agreement of not suing and now it is the new norm."

The break in the unofficial truce was inspired in part by "patent trolls," entities that buy or file patents with the sole intent of some day suing entrepreneurs who use the ideas.

Ranks of patent trolls are growing, as is the number of large companies turning to not just to cash-in but to gain or protect market terrain, according to Chien.

"What do you call an AOL or a dying company that turns to patent lawsuits?" she asked rhetorically. "Do they become corporate trolls?"

Struggling Yahoo! last month filed a lawsuit against Facebook accusing the social networking star of infringing on 10 of its patents.

The suit claimed that "Facebook's entire social network model, which allows users to create profiles and connect with, among other things, persons and businesses, is based on Yahoo!'s patented technology."

Facebook returned fire with a accusing Sunnyvale, California-based Yahoo! of being the one infringing on patents, and not the other way around.

Even business software giant Oracle has weighed in. A trial will get underway on Monday in a patent case Oracle filed against based on software used in Android operating systems.

As patent suits proliferate, with ample war chests are spending small fortunes to arm themselves with portfolios purchased from technology companies selling off intellectual assets.

AOL this week announced plans to sell more than 800 patents to Microsoft in a $1.056 billion deal giving the faded Internet star a needed cash injection.

Microsoft general counsel Brad Smith said that the software giant is getting "a valuable portfolio that we have been following for years."

Facebook in March confirmed that it bought 750 software and networking patents from IBM to beef up it arsenal on an increasingly lawsuit-strewn technology battlefield.

Customers try the latest Ipad 2 at the Apple store on Fifth Avenue in New York. The Internet Age is becoming known for patent litigation as rivalries spread from marketplaces to courtrooms.

Early this year, Google bought 188 patents and 29 patent applications related to mobile phones from IBM but did not disclose how much it paid.

Last year, IBM sold Google 2,000 or so patents ranging from mobile software to computer hardware and processors.

Google has been strengthening its patent portfolio as the fight for dominance in the booming smartphone and tablet computer markets increasingly involves patent lawsuits - with Apple a prime litigator.

The Mountain View, California, technology titan behind Android mobile device software last year transferred patents to smartphone giant HTC Corp. to help the Taiwan-based company in an intellectual property clash with iPhone maker Apple.

Apple has accused HTC and other smartphone makers using Google's Android mobile operating system of infringing on Apple-held patents.

Some of the patents that HTC got from Google had belonged to Motorola Mobility, which Google is buying for $12.5 billion in cash in a quest for precious patents.

"Our acquisition of Motorola will increase competition by strengthening Google's patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies," Google chief executive Larry Page said when the Motorola Mobility buy was announced.

Motorola Mobility chief executive Sanjay Jha told financial analysts the US maker of smartphones and touchscreen tablet computers has over 17,000 issued patents and another 7,500 pending.

Meanwhile, Apple and Microsoft allied in a consortium that outbid Google to buy thousands of patents from bankrupt Nortel Corp. in what was branded the largest transfer of intellectual property of the Internet Age.

"The reality is, there is more and more liability in making a product," Chien said. "Companies like Google and Facebook with few patents but big roles in the marketplace have the most to lose."

Patent suits in hot Internet markets are not necessarily bad news for consumers, provided that companies cashing in use windfalls to develop even more innovative products, according to Chien.

Managing patents could also become a potential source of competitive advantage for startups.

"The example shows that you can go out and buy patent protection," Chien said. "It is only when you are making money that you become interesting as a target, and when you are making money you can afford to buy ."

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User comments : 13

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Voleure
4.2 / 5 (10) Apr 15, 2012
"It is only when you are making money that you become interesting as a target, and when you are making money you can afford to buy patents."

Originally patents were laid out to increase innovation by allowing even a lowly inventor to benefit from their creation. They were given protection, at a modest fee, from large firms poaching their innovation. Now here we are with only big players able to afford and defend patents and the small players crushed out of the game. I can't see this state of affairs increasing innovation.

Voleure
Vendicar_Decarian
0.8 / 5 (40) Apr 15, 2012
Apple claimed ownership rights to the image of a garbage can.

Filthy, ignorant, worthless, money grubbers.

Nuff said.
Silentsam
5 / 5 (2) Apr 15, 2012
They need to start throwing out all these patent and copyright cases. They all hold back innovation and creativity.

There should be some regulation that prevents large entities from using patents or copyrights. maybe something about only having small entities get them, and then lose rights after having a $1mil profit or something.
OverweightAmerican
4.2 / 5 (5) Apr 15, 2012
Time to stop this madness. We need to petition the legislators to exempt the software industry from patent legislation.

In most cases copyright can protect software innovators sufficiently.
Vendicar_Decarian
not rated yet Apr 15, 2012
And in addition to the above, define genetic alteration to be programming.

Telekinetic
5 / 5 (1) Apr 15, 2012
I think the Chinese started this free-for-all. Since they have a penchant for sheer appropriation of tech designs, the Western world figured if you can't beat 'em... Patents are crucial to the general order of commerce, and I've been burned more than once because I didn't have one. The bottom line is that no one can be trusted in "business", which is often a form of blackmail or extortion wearing a necktie.
howarddavis3
not rated yet Apr 15, 2012
Overweight American wrote: "Time to stop this madness. We need to petition the legislators to exempt the software industry from patent legislation." Why?

"In most cases copyright can protect software innovators sufficiently."

Especially if they are not very creative. But if you invent something unique and just get a copyright on it, there is no real protection for the concepts embodied in the software and they can be used by anyone without fear of infringement.
Vendicar_Decarian
not rated yet Apr 15, 2012
"But if you invent something unique" - Howardtheduck

Like a garbage can.

Or a menu for selecting text based emoticons...

alfie_null
5 / 5 (2) Apr 16, 2012
Corporations (and in a larger scope, our society) spends increasing resources on this activity. Collaterally, young adults decide to pursue law as a career rather than engaging in activities that create or produce things. When we run out of inventors, who will be left to sue?
wiyosaya
3 / 5 (2) Apr 16, 2012
"...
Originally patents were laid out to increase innovation by allowing even a lowly inventor to benefit from their creation. They were given protection, at a modest fee, from large firms poaching their innovation. Now here we are with only big players able to afford and defend patents and the small players crushed out of the game. I can't see this state of affairs increasing innovation.

Voleure

IMHO - it is even worse than this with the "revised" patent law in the US that gives the first to patent rights to the invention. This essentially means that if you are a small inventor, you risk losing your patent rights to anyone you disclose the invention to.
stealthc
not rated yet Apr 16, 2012
All of the solutions to humanity's problems, are patented, and so if you want a solution, there's that little issue of freedom which happens to be the price you must pay to solve the problem. The solution should be clear, abolish patents.
DaFranker
1 / 5 (1) Apr 16, 2012
All of the solutions to humanity's problems, are patented, and so if you want a solution, there's that little issue of freedom which happens to be the price you must pay to solve the problem. The solution should be clear, abolish patents.


Outright abolishing patents has the documented problem that to a prospective "inventor", there is no incentive to invent as there's no guarantee that you'll be able to profit from it and high chances that others will simply use your idea right away without you gaining anything. Americans simply cannot accept this, so this is not an option to them.

A more realistic solution would be to implement a retroactive compensation policy, where those who use and profit from an idea compensate the "inventor" proportionally, yet abolish the concept that patents forbids others from even using patented ideas at all. This would fit the free market model more, as one who pays no compensation obviously already has a competitive advantage.
dschlink
not rated yet Apr 16, 2012
I am quite willing to sue the companies that steal my IP for their own profits, while blocking my entry into the marketplace with exclusive contracts.

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