The recent court decision in the patent infringement case brought by Apple against Samsung—in which Apple was declared victorious and tentatively awarded over $1 billion in damages—once again brings to the fore the entire matter of patents and patent law, particularly with respect to technology. The Data Center Journal has broadly covered this topic on several occasions this year (“Aftermath of SOPA and PIPA: Let’s Talk IP” and “Technology Patent Wars”), noting primarily the need to reevaluate not only intellectual property laws but the underlying philosophy as well. The Apple vs. Samsung case provides another timely opportunity.
Apple Awarded Victory, but Who Really Wins?
The $1.05 billion decision against Samsung for infringing on a number of Apple patents is huge, even for a technology giant like Samsung. A Wall Street Journal graphic provides a patent-by-patent overview of the jury’s decision. Perhaps the most striking detail is the nature of some of the patents (which are, no doubt, boiled down to a few words for conciseness): “rounded square icons on interface,” “enlarging documents by tapping the screen,” “distinguishes between single-touch and multi-touch gestures,” “ornamental design of the iPhone (white color)” and so on. Are any of these concepts or design elements really innovative? And what is the benefit of allowing, say, only Apple to produce rectangular smartphones with rounded corners? Should a company like Apple even be permitted to lay an exclusive claim to such things?
With the huge number of patents both in the works and on the books—particularly in the software/technology space—and with the specious nature of many of these patents (don’t design a rectangular smartphone with rounded corners, as you might inadvertently imitate the “look and feel” of the iPhone), the legal roadblocks to productivity are constantly growing. To make matters worse, the commoditization of patents has led to a proliferation of so-called patent trolls: companies whose sole business (or a significant portion thereof) is suing other companies for patent infringement. Patent trolls buy or otherwise acquire patent rights, but not for the purpose of developing new products: they make money by going after other companies with threats of legal action. CNet recently profiled one company that is infamous for its patent trolling (“Inside Intellectual Ventures, the most hated company in tech”). Of course, even companies that do develop products are not above patent trolling, as the numerous ongoing court cases in this area demonstrate.
Do Patents Stimulate or Stifle Innovation?
One of the main arguments for maintaining a system of patent laws is that it encourages innovation: individuals or companies that invest large amounts of time and effort to come up with an idea should be able to reap some reward for doing so, thereby encouraging more such efforts. Conceptually, all other things being equal, this seems to make sense.
Now consider the current situation, patent trolls and all. The U.S. Patent and Trademark Office is buried in a backlog of patent applications (somewhere in the neighborhood of 600,000), many of which will be approved to expand the already huge number of existing patents in software and technology alone. An inventor or company designing a product must now navigate a maze of legal landmines—one wrong move could land that individual or group in court, fighting claims of copying someone’s idea. An original smartphone design may well be impossible at this point, given the demands of consumers: such a device could contain hundreds of patented components or software modules, if not more.
So, what’s it to be? Patents seem to be a good idea to encourage innovation, but with even the tiniest details now subject to ownership by various companies, innovation has become heavily burdened by the maze of patents. Furthermore, in many cases, just the threat of legal action is enough to stifle innovation. Small companies are often at a disadvantage to larger ones even in questionable infringement cases; large companies are often better equipped to fund legal representation, whereas legal fees may be too high for smaller companies to even consider.
Is Patent Reform Even Possible?
A first-blush assessment of the situation would seem to indicate that reform is the best option. Patents seem to be beneficial to innovation, yet too many can choke innovation. So, one middle-of-the-road option is reform. Eliminate inconsequential patents and those that arise from “aha!” moments (i.e., patents on ideas that any moderately intelligent individual could come up with after a minute or two of thought). The difficulty, however, is determining standards for what counts as consequential, thus opening yet another potential can of worms. Even so, were such standards created, the number of patents could well remain at a stiflingly high level.
Many of the problems arising from the current patent system seem to ultimately be the result of muddled thinking on the subject. A number of questions should be addressed to the end of clarifying the foundation of patent law. Here are a few.
- Ideas are far different from physical objects, so why should ownership of them be treated in the same way? Stealing your car and designing my garden to be just like yours are two entirely different things.
- Can and should ownership of an idea be bought and sold like physical objects? Patents and other intellectual property are fundamentally based on the notion of “I got here first.” Can these kinds of “rights” really ever be transferred? This type of question gets to the heart of the problem of patent trolling.
- Are patents granted to protect rights, benefit consumers or spur innovation? The actual motivation for maintaining the patent system seems to vary depending on the situation. Sometimes it’s for consumer benefit, sometimes to protect innovation and sometimes just plain because it’s the moral thing to do. But which of these reasons, or in what combination, is the true platform on which patents should be understood?
- What would truly be the result of a complete elimination of all patents? The practical problems traditionally associated with a lack of patent protection may well be matched, if not outweighed by the ongoing patent wars. Would it really be that bad to just get rid of the patent system altogether?
These are not necessarily simple questions with simple answers. Part of the difficulty in answering them is the need to determine whether principle or pragmatism is the underlying platform on which the answers will rest. A principled stand is likely to either embrace patents wholesale—including patent trolls and all the other quirks of such a system—or reject patents entirely. A pragmatic stand is likely to fall somewhere between these extremes, but it faces the difficulty of determining whose interests should prevail: consumers, companies, patent trolls, innovators or someone else entirely.
Unfortunately, given the money involved, elimination of the patent system is highly unlikely anytime soon—seeing the results of such a change would certainly be interesting, however. In the meantime, attempts at reform may be the order of the day. Whether such attempts will ameliorate the epidemic of companies suing each other over alleged patent infringement remains to be seen, but it seems highly unlikely. That doesn’t mean, however, that everyone—consumers, business owners, inventors and even politicians—can’t start discussing the principles behind patents. A clearer understanding of why we even have a patent system could enable more meaningful and helpful reforms, or possibly lead to a consensus that the patent system should be replaced or eliminated altogether.
Photo courtesy of Comrade Foot