In a Tokyo courtroom earlier today, Apple (NSDQ:AAPL) lost a patent suit against Samsung, as the judge ruled that the South Korean electronics manufacturer did not infringe on a patent concerning the synchronization of content. The Tokyo court also refused Apple's injunction request that would bar Samsung from offering eight models of Galaxy products in Japan.
That followed the decision last week in which a U.S. Court found Samsung guilty of infringement on five of seven Apple patents. Samsung has characterized the verdict as unfair to U.S. consumers and is appealing. On the same day, however, a South Korean court found that Samsung did not copy the look and feel of the iPhone on its own products. That court further ruled that Samsung infringed one of Apple's other patents, but also decreed that Apple illegally used the South Korean vendor's patented wireless technology.
Whether perception or reality, it seems that companies are increasingly turning to the courts, seeking compensation for alleged patent infringement. Matthew Braunel, a partner at Thompson Coburn in its Intellectual Property group, took time out to answer a few questions about such lawsuits, and whether innovation could be stifled as a result.
CRN: There are obvious reasons why we want to protect intellectual property. However, patent litigation seems way out of control, with companies suing each other and claiming patent infringement for 'inventions' that seem dubious at best. Can you offer some perspective on how we got to this point?
Braunel: It's true that patent infringement suits are in the news a lot more now, but that doesn't mean all the suits are unfounded or frivolous. On the contrary: Anything 'new' is potentially patentable.
A patent's real value comes from its practical ability to exclude others, and that usually occurs through litigation. Patent litigation is costly, so although the invention in some cases may seem dubious, you can usually be certain that whatever is claimed in the patent is important enough to the business to warrant the costs of litigation. In many industries where improvements move very quickly, it is sometimes difficult to understand the value of the patent by the time issues are litigated, but the value is usually there. To put it another way, if a company decides to litigate a patent, the company has usually already determined that there is a competitive advantage to the patent, and that the market is worth protecting.
Patent litigation is a critical business tool for companies that want to protect their specific innovations related to a longstanding product or process. For example, dozens of companies manufacture contact lenses. But if a company develops and patents a technology that adds a certain green tint to the contact lens, they may need to litigate that patent. From the outside, someone might say, 'This is a dubious invention; it doesn’t have any value.' But for that company, it represents a serious competitive advantage and needs to be protected. That one small change is what the consumer is looking for. It's the only thing separating the contact lens manufacturer from its competitors.
CRN: What is needed for IT to get out of this litigation spiral? Is it even a good idea to try? If things keep going apace, where will the IT industry be in five years?
Braunel: I don't think we are in a 'litigation spiral.' The purpose of our patent system is to further innovation, not stifle it. Our patent system exchanges a limited monopoly -- usually between 17 and 20 years -- for full public disclosure of the invention in the patent. Expired patents are terrific sources for inventors to build from.
Litigation is sometimes necessary to enforce the scope of protection, but also an opportunity for the defendant to test the validity of the patent itself, which benefits both future inventors and the public at large. In addition, the recently passed America Invents Act continues to provide an alternative option to federal court litigation over the validity of a patent. That option -- now known as the 'inter partes review process' -- allows anyone to challenge the validity of an issued patent in the U.S. Patent and Trademark Office rather than federal court.
CRN: How can IP and innovation be protected and encouraged? How realistic is hammering out licensing arrangements?
Braunel: Tech companies should use caution when attempting to reverse-engineer a competitor's technology. It's not always safe to 'keep up with the Joneses' by checking out what your competitor is doing and trying something similar in a different way. You can't just assume that because a competitor has launched a new product or process that the competitor has the right to do so. That competitor may already be infringing a patent, if you're attempting something similar, you could be accused of infringing, too. That's partly why it's so helpful to include patent counsel and patent-savvy engineers during the research and development stages.
Licensing is always an option. But companies entering license agreements with patent owners need to think not only about today's technologies, but also tomorrow's. When a company is considering a license, it may want to think ahead: 'What other patents can I license from this owner now, before other competitors come along?' or, 'Can I use a different technology?'
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