Blame Congress, Not Apple, for Patent Woes

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Apple is mixed up in all kinds of patent issues. As a result, the company has been accused of unfairly trying to kill Google’s Android platform, and of being a “patent troll.”

But such criticism is misplaced. First, the accusations are false. Second, the real blame should be reserved for the US Congress, which has the power to fix our broken patent system, but year after year fails to do so.

Don’t Blame Apple

Apple is currently embroiled in a patent battle with Korean electronics giant Samsung. It started when Apple filed a lawsuit against Samsung in April. Apple claimed that Samsung’s Galaxy line of phones and tablets infringed on iOS device patents in 16 specific ways and  “slavishly” copied the “look and feel” of the iPhone and iPad.

Samsung, which is a memory chip supplier to Apple, countersued in several countries.

Apple actually won an agreement to stop selling Galaxy tablets in Australia until the dispute is settled. And the US International Trade Commission has agreed this week to look into Apple’s claims.

Apple and Samsung are currently the world’s two largest makers of smartphone handsets.

Apple also sued Taiwanese electronics maker HTC for infringing on two patents involving techniques for two basic software operations (not look and feel), and won a preliminary ruling from a judge in California.

What’s interesting about the case is that while Apple sued HTC, the technology in question exists in all Android devices. As a result, some have expressed fears that Apple could shut down Android. But these fears are overblown. The most likely outcome is that Android handset makers would have to pay Apple a licensing fee, or Android will be re-designed to avoid the patents.

Patents almost never result in smart phones being pulled off the market. The best-case scenario for the patent holder who successfully sues is a licensing deal. One stellar example is that Microsoft makes more money from Android than it does its own Windows Phone product. Android handset makers have to pay Microsoft to license some of its patented technology.

These lawsuits have also prompted some to accuse Apple of being a patent troll. But in both cases, and unlike many patent lawsuits in technology, Apple is defending its own inventions and designs against companies it claims have copied or imitated them.

In the case of the Samsung lawsuit, Apple is trying to prevent the commoditization of designs that copy Apple’s. Because Apple’s iPad is the only successful touch tablet on the market, dozens of companies are clearly trying to get as close to the iPad in look and feel as possible. If Apple doesn’t challenge these attempts in court, then all touch tablets on the market will resemble the iPad, at least superficially, which would enable competitors to profit from Apple’s design and engineering work and investments.

And in the HTC case, Apple is pointing to methods used in Android that it claims infringe on its own patents.

This is exactly the purpose for patents. There’s nothing trollish about it.

The US Constitution clearly spells out the purpose of patents: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

A patent troll is any person or company that stockpiles patents in order to make money from lawsuits, rather than products. A typical troll company doesn’t actually design, invent, manufacture or sell anything — they just acquire patents, then sue companies in order to profit from the settlements. Others, such as Nathan Myhrvold’s Intellectual Ventures, does actually invent patentable ideas (but has so far failed to productize any of them), and also buys patents.

Apple is the opposite of a troll. The company invests incredible resources into original design and unique engineering. It then manufactures and sells products based on this internally generated intellectual property.

But even trolls shouldn’t be blamed for the patent problems.

Don’t Blame Patent Buyers and Sellers

A legal system that fails unless people are virtuous is a bad legal system. Trolls are an inevitable product of the system, which allows almost any idea to be patented, allows those patents to be bought and sold on the open market, then challenged and defended in the courts.

Patent trolling is legal and profitable, and therefore is going to take place. The problem is that the system allows it.

The system also allows something akin to trolling, which the purchase of patents solely for protection.

In recent months, multiple companies have engaged in bidding to acquire huge patent portfolios from the likes of Nortel and InterDigital, mostly around mobile technologies. Investor Carl Icahn is pressuring Motorola to sell off its portfolio of some 17,000 patents.

The biggest patent portfolio on the market right now is the one that could be sold by InterDigital. Both Apple and Samsung are among the potential buyers. If either of them gains ownership, which could cost some $5 billion, the buyer will be in a position to hammer the other for patent infringement.

Smart phones are patent nightmares because they have so many patentable parts. Every single smart phone in existence today theoretically violates hundreds of patents. There is no way to build a smartphone without technically violating patents.

This is why companies want to buy up as many patents as they can: Patents are weapons. And the buying of patents is part of a global arms race. If your competitor buys patents by the truckload, you have to, too, because the ability to countersue is a deterrent.

Because of the current patent system, the relative price of any company’s products is dictated in part by patent holdings. Patents can force rivals to pay fees — Microsoft is demanding $15 for each Android phone sold — and also free a company from having to pay fees to rivals.

So for a consumer electronics giant like Apple to avoid the purchase of other companies’ patent portfolios is the same as voluntarily raising prices on its customers and lowering the prices of competing products. Why would any company choose to do that?

Blame Congress

Everybody knows our patent laws suck. They harm, rather than help, innovation. They damage the economy. They give the United States a disadvantage in the global marketplace.

Patents are allowed to be too broad. Software is patentable just like “hardware inventions,” with almost every line of code potentially patentable.

Non-expert judges have to rule on patent cases without enough help from experts.
The biggest effect of the broken patent system is that companies, inventors and engineers waste far too much time generating idiotic patents just to protect themselves, time that could be better spent doing more inventing.

The second biggest problem is that the ability to buy and sell patents like they’re oil futures disadvantages smaller inventors. A startup seeking to build a new kind of smart phone would have no chance against the Apples and the Googles and the Microsofts of the world, as they would be crushed by patent litigation or licensing fees.

If you listen to the critics, the fault lies with Apple, as well as Microsoft, Google and all the other companies that own, buy, sell and license patents. Or you’d blame the patent trolls for trying to make money from current patent law.

But the real blame lies with the US Congress, which knows the patent system is broken but is too busy posturing for news cameras and fighting ideological wars to fix it.

  • Christian Skoda

    What an utter pile of bs, Mike! I normally agree with you, but this is just wayyy off and couldn’t be further from the truth. Come on! Apple is just feeling the heat, they know they can’t compete and try everything to shut the competition down in this case. Shame on them! If they wouldn’t slavishly abide to the 1-product-each-year-cycle, I could side with them. But knowing that they just sh*tting in their pants for not being competitive, I don’t have any warm feelings for them. Seriously! And no smiley at the end.

  • azurehi

    Slavishly…sounds so wet and juicy, like the sounds a Giant makes as (s)he prepares to Gobble, mmmm

  • techgeek01

    Well of course, an pro apple site is not going to say that Apple is patent trolling and that the problem with patent trolling is NOT Apple’s fault but Congress, since they are doing nothing to stop it.  ;oP

  • EW

    “they know they can’t compete”….sorry you just lost all credibility!  The paragraph above makes no sense.

  • jeanlouisnguyen

    I’ve always been supportive of Android, but the article nails it. The US patent system is broken. Not Apple. Or Microsoft. What Apple does is simply take advantage of that broken system. Everyone plays into it regardless. Tech companies will get attacked, or use patent litigation against the competition – is it really Apple’s fault that the system is broken in the first place? In the same line of thought, Google’s latest PR move this week should’ve been aimed at the US patent system, not its competitors.

  • Honyant

    I couldn’t agree with you more.

  • Honyant

    I couldn’t agree with you more.

  • minimalist1969

    All systems will be exploited.  Its just human nature to look for ways to game the system.   Pretending that getting rid of the patent system altogether will level playing field is a naive and baseless viewpoint.  Only an extremely reckless person who has no horse in the game whatsoever would propose throwing the baby out with the bathwater.  

    Patents exist for a reason.  They actually encourage innovation by providing the innovator with a guarantee that they will be able to make money off their invention for a specific period of time (and that after that time the knowledge moves in to the public domain).   With software and computer patents its arguable that the duration should be much shorter due to the speed of the industry but that does not mean that companies should be able to steal ideas on which their competitors spent millions of dollars in R&D.   Just because stooge companies like Lodsys have found ways to exploit the system to their advantage does not mean patents are fundamentally a bad idea.   And just because there are companies who abuse the patent system does not mean ALL companies are doing this when they sue over patent infringement.  There are huge differences between what Lodsys and Oracle are doing.

    The problem is not patents themselves or lawsuits or negotiations involving these patents.  The problem is patents that are too vague and poorly trained patent officials that award them.

  • So sick of it

    If you think the patent system is broken, you should check out the copyright system.

  • ctt1wbw

    It’s “A pro Apple site” not “AN pro apple site”.  Apple is capitalized since it’s a proper noun. And yes, the USPTO is fucked up.  It allows you to patent an “idea or method” that you will NEVER bring to market.

  • mahimahimahi

    Nailed it.  Part of being a congressman is doing more than what your constitutes ask.  They need to micromanage a little more. The patent office is overwhelmed and the patent laws are written by lawyers who only cared about protecting their trade. 

  • hexx thalion

    how would you feel if you take beautiful photo, upload it to flickr, i download it and use it on a website with loads of banners, get millions of hits because that photo is beautiful and you as a photographer, well you know, you’d get nothing and i’d be rich – just an analogy

  • Vikrant Tomar

    Dude…no matter how much you try to justify Apple…but Apple is being a patent troll…I do not mean to say that they do not innovate…they do..so does Google…but how many times have you heard Google suing anyone??? Apple is a patent troll… 

  • Robert Norris Hills

    Yeah they have always done it..right…NO BEEP INCORRECT.

    This time last year apple execs were like “Whats an android”

    Now they are like “SUE THEM, SUE THEM ALL BEFORE IT’S 2 LATEEEEE”

    BTW according to comscores new poll this morning Samsung is now the largest phone OEM in America.

  • oakdesk23

    I don’t think it’s fair to characterise Apple as a patent troll. It’s not that I agree with what Apple is doing, and obviously many of these patents should never have been granted. However, patent trolls have no products, they don’t even come up with their so-called inventions. They buy idle patents from other people then file lawsuits. Their product is the patent, their business is litigation, settlement and licensing. Apple on the other hand uses their patented “inventions” in actual products that you can buy. They sue to get you to stop using their “invention” (well, honestly, to stop you from selling your product) not to force a settlement.

  • lals122
  • Tomas

    Mike said: “But such criticism is misplaced. First, the accusations are false.
    Second, the real blame should be reserved for the US Congress, which has
    the power to fix our broken patent system, but year after year fails to
    do so.”
    ________

    Let’s face it, Mike, the current bozos in our federal legislative branch couldn’t even get it together enough to sign the check for the bills that were due for money they had already spent. THEN they walked out the door for a month’s vacation with their work not done, leaving the FAA, it’s employees, and contractors hanging there, twisting in the wind with no money even to pay their employees and contractors for work already done.

    Yes, we need the patent mess straightened out, but first we need to elect folks in our employ who know that they are paid to do a job, not just posture on a stage.

    We need to insist they actually do their job – and not to leave on vacation until the job is done. These are not hourly employees, paid for merely appearing at the workplace, they are salaried: Paid to complete a job no matter how many hours it takes…

    Tom
    (Retired Engineering Manager – salaried)

  • Iscin

    I’ve been saying this for some time now. One of the earliest examples I can think of is when Edison tried to screw Tesla at the world fare by not letting him use light bulbs that Edison had patented. Tesla had to quickly submit a patent for his own “take” on a lightbulb before he could use any and power them up with his AC generators.

    The U.S. patent system sucked then and it sucks even more now. Fucking cut it out America!

  • linsha88

     http://tinyurl.com/4skyaqr                      

  • lals122
  • AdamC

    Dude, Apple invents things and they also protect what they had invented, goog steals and rip off other’s ideas.

    Btw Apple also make and sell the stuffs they had patented.

  • linsha88
  • lals122
  • James Katt

    One easy way to prevent patent trolling is to require the patent holder to be also producing products based on that patent.  A patent holder cannot sue anyone until the holder is actively using the patent.

  • James Katt

    Of course, with this requirement, then Apple’s competitors still lose.  They have violated Apple’s patents.  They have no license to use those patents.  They should have avoided using those patents in the first place.

  • James Katt

    The US Patent System is NOT BROKEN.  It works as intended.

    The biggest problem is that there is no punishment for the lawyers involved in such suits.

    I advocate giving the DEATH PENALTY for any plaintiff lawyer who loses or settles a patent lawsuit.

    This would immediately clean up the problems with the patent system.  Absolutely.

  • James Katt

    Apple created inventions.  Apple patented those inventions.  Google violated those patents.  Google did not create its own inventions.  Apple sues Google.  This is righteous.  Apple is doing the right thing.  Apple is not a patent troll.  Google is a serial violator.  

  • jwg1993

    I like apple and android. They both steal from each other. Believe it or not, there is always not as much innovation as you would believe. You know that new fancy notification system apple has included in the iOS 5 beta? Google used that first.

  • jwg1993

    They can compete but eventually, they will fall behind android.

  • lsl56
  • lsl56
  • Honyant

    Those who collect two or more pay cheques are likely to work hardest for those who sign the bigger cheque. I’m sure the employers of legislators around the world are generally happy with the job that those legislators are doing.

  • JDWages

    Remember, Mr. Elgan, when you point, there are at least 3 fingers pointing back at yourself.  Every single voting American is to blame for this insofar as these Americans perpetually vote incumbents into office and maintain the present broken system.  Americans will have to better educated themselves on the merits of “term limits” before our patent system ever gets truly fixed.

  • JDWages

    If it “works as intended” then whomever wants it to work this way is a complete idiot.  I for one define the present system as “broken.”  And every registered voter is to be blamed for it.

  • hexx thalion

    are you ok?

  • lrd

    Who’s blaming Apple? Google?
    Apple’s protecting their IP. Apple’s not a patent troll. They make real products with real innovations.
    For example, look at the Samsung Black Jack smartphone of four years ago. Looks a lot like a Palm Treo of days ago.
    Now look at the most popular Samsung smart phones, they look a lot like an iPhone.
    Had the iPhone not coming along, Samsung would be making the Black Jack 5 right now.

  • Alex Whitney

    I just paiid $ 22.89 for an iP a d 2-64GB and my girlfriend loves her Panasonic Lumix GF 1 Camera that we got for $ 38.76 there arriving tomorrow by UPS. I will never pay such expensive retail prices in stores again. Especially when I also sold a 40 inch LED TV to my boss for $ 657 which only cost me $ 62.81 to buy. Here is the website we use to get it all from, http://bit.ly/r8qxL7

  • monkeyrun

    Blame Google not Congress.

    They are the ones who knowlingly used other company’s technology, and refuses to pay.

    According to Google, all patents are bogus, except their own.

    http://fosspatents.blogspot.co

    Speaking of broken system, the justice system is not all that perfect either, let’s just abolish that also…. Or according to Google, abolish those that doesn’t benefit them.

  • monkeyrun

    It’s like you see one of those KIRF iFones with a SD card slot on it, and call that an innovation.

    And the notification system really isn’t all that fancy…. it’s just notification ordered in a list. Seriously, did Google invented the notification or ordering things in a list?

  • lsla79
  • prof_peabody

    No one seriously thinks Apple is a “patent troll.” Anyone that does is misunderstanding the term. Apple and their employees are pretty much the exact opposite of that.  They produce and publish more patents on more original ideas than anyone in the business and they think them up entirely on their own.  A patent troll is actually the opposite of that. 

  • lls19
  • lals82
  • jwg1993

    It’s just like apple patented little squares with words on them, a.k.a the look of apps on the screen. They should have never received that. And the samsung galaxy tab 10.1 looks nothing like my ipad 2, but apple sued them for that. They also sued samsung for the droid charge which looks nothing like the iphone. My point is that android and ios are very different (minus samsung’s touchwiz UI)