Wednesday, December 31, 2014

Phone patent wars decline

ExtremeTech reports:
After years of relentless litigation, it seems the mobile/smartphone patent war might be drawing to a close. Rockstar, a patent trolling company owned by Apple, Microsoft, Sony, Ericsson, and BlackBerry, has agreed to cancel the lawsuits it had filed against Google and most Android device makers. Rockstar will also sell off its remaining patents (some 4,000 of them) to a company called RPX, which has promised to license the patents to anyone who needs them for defensive purposes. This follows on from news this summer that Apple and Google had agreed to drop all lawsuits between the two companies, and Apple and Samsung agreed to drop all lawsuits outside the US.

The patent wars — or patent trolling, depending on your point of view — originally started to heat up in the 1980s, as the Information/Digital Age began to gather a lot of inertia. Patents weren’t originally designed with software in mind, and they’re also not very good at responding to periods of rapid innovation. As you can imagine, this in turn meant that patents were rather ill-suited to protecting the innovations of tech companies that were quickly becoming very rich and powerful. At some point, these companies (or their lawyers) realized that patents were a great way of stymieing the opposition or extorting them out of a few million dollars. ...

“Peace is breaking out,” RPX’s CEO John Amster told the Wall Street Journal. “I think people have started to realize that licensing, not litigation, is the best way to make use of patents, and this deal is a significant acknowledgment of that reality.” ... It does indeed seem that the smartphone patent war, kickstarted by the iPhone in 2007, is finally drawing to a close.
Wikipedia defines patent troll as a pejorative term:
A patent troll, also called a patent assertion entity (PAE), is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question, thus engaging in economic rent-seeking.
In this case, there is an oligopoly of a few firms controlling the smart phone market, and they have pooled their patents. They pay big license fees to each other based on those patents. Their patent pool is not a troll according to the above definition. They sell products and services using those patents, and they use the patents against outsiders.

I realize that a lot of people don't like patents, but it is foolish to say that licensing patents is better than litigation. Almost all patent lawsuits are driven by someone's refusal to pay licensing fees.

There is no real reason for consumers to care if a few billion dollars changes hands between Apple, Google, and Microsoft. For them, it is pocket change. While patent lawsuits threaten to take products off the market, so far that has not happened. A few phones have had to remove features, but in the examples I know, the features were either worthless or allowed simple work-arounds anyway.

Steve Jobs liked to claim that Apple invented the smart phone, and that Google had no right to push a similar product. So he had Apple file a bunch of lawsuits. The patents tell a different story, and helped resolve the matter in an orderly way. They have a record of who invented what, and when. License fees can then benefit whoever invented the most.

The argument that patents are "not very good at responding to periods of rapid innovation" has not been proved. If patents were too strong, Apple would not have been able to enter the cell phone market. If patents were too weak, companies would not have bothered getting the critical patents, and court would be in much worse shape resolving unfair competition claims.

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