First of all, in my first post to this website you are not reading a blog post right now – you are reading a blawg post. A blawg is a ‘law blog’ and today we’re discussing patent law, and in particular its importance in the competition among smartphone manufacturers. We know that the last few years has seen the entrance of new and exciting players in the smartphone arena, heating up competition in the marketplace. This competition among smartphone manufacturers has spilled over into the courtroom. Many of the major players have levied patent infringement suits against competitors, and the intensity of these patent litigation wars is increasing. Motorola and RIM have ongoing patent litigation battles, Nokia sued Apple, Kodak sued Apple and RIM, Motorola and Microsoft are battling, as well as Google and Oracle. And these are only the highlights.
So is this how technology companies conduct business today – in the courtroom as well as in the marketplace? Well it seems it is in today’s world, although it hasn’t always been that way. Fifty years ago, patents were rarely litigated. If Company A had a product and a patent that related to that product, it was accepted by others that Company A had the monopoly on the product and other companies either stayed out of the market or licensed the technology from Company A. The patent for the frisbee (US patent #3,359,678) provided Wham-O Corporation with many years of monopoly on the popular flying saucer toy. Other companies chose not to try to copy the product, assuming the patent protected Wham-O from competition. Reading the claims for the patent, however, reveals that the patent was quite narrow and only covered specifically shaped ribs on the top of the Frisbee.
But back then this was enough to provide Wham-O with many happy years of market domination. In those days the patent holder had the advantage. But the situation has changed greatly since then. Competitors decided to try their luck in court instead of assuming patent holders had all the rights. Alleged infringers began to push back. The push back took the form of two arguments, 1) non-infringement – the alleged infringer argues that they did not infringe the claims, and/or 2) invalidity – the alleged infringer argues that the patent at issue is invalid and therefore they cannot be infringing.
As more and more patents were challenged in court, the defenses of non-infringement and invalidity began to become stronger, more well-defined, and more powerful. The court system has been instrumental in defining and clarifying the rules involved in patent infringement. The Supreme Court in recent years has accepted and ruled on numerous cases instrumental in helping to define patent law.
The 2007 Supreme Court KSR decision made it easier for alleged infringers to show invalidity of a patent due to obviousness of the idea over other similar art. The 2010 Supreme Court Bilski decision did not result in software or business method patents becoming extinct, but it did clarify the rules by which they must abide.
The rules are still being defined. The Federal Circuit Court of Appeals recently heard arguments on updating the rules regarding inequitable conduct – which is a common defense used in proving a patent invalid. The Supreme Court recently agreed to hear a case which could re-set the standard for finding patents invalid when prior art is found that was not considered by the United States Patent and Trademark Office when examining the patent application.
The further definition of patent rules and law has provided potential infringers with tools they can use against patent holders, allowing more companies to compete in the marketplace. But of course patent holders have taken steps to improve their position also. The new rules provide the guidelines for writing patent application which are stronger and clearer. This has resulted in patents becoming more precise, more accurate, and, when done right, more valuable.
Today having a strong patent portfolio is a valuable component of competing on the forefront of technology. A company developing leading-edge technology not only has to develop and market the best technology, they have to be sure their technology is supported by a strong patent portfolio. If not, their business plan will have to include the resources to license the technology they need, or the resources to challenge in court the patents they may be infringing.
The looming court battles over smartphone technology will provide an interesting measure of where we stand in this country regarding patent rights. How valuable are patents in major technology areas? Is it possible for disruptive products and their manufacturers to hold their own in the marketplace and in the patent courtroom? What is the balance of power between patent holders and infringers? Is the United States Patent and Trademark Office upholding its duty of issuing quality patents? And finally, how will the smartphone patent litigation wars affect the products available in the marketplace? We shall see.
EDITOR’S NOTE: Karen Jachimowicz (Karen J) is a new Affiliate of WRT Associates and a Registered Patent Agent with the law firm of Schmeiser, Olsen, & Watts LLP.