Cisco, Motorola, and NETGEAR recently banded together to fight an NPE that attempted to sue thousands of small businesses for infringing on a wireless internet ("wifi") patent. (http://www.docstoc.com/docs/document-preview.aspx?doc_id=132803542). Cisco, Motorola, and Netgear attempted to prove that Innovatio was purchasing patents for the purpose of racketeering. The three tech companies attempted to slap Innovatio with a RICO, a legal provision that allows the U.S. government to sue for criminal penalties. RICOs have traditionally been reserved for criminal organizations such as the mafia and for extreme cases of insider trading (Michael Milken). However, courts eventually struck down the allegation that Innovatio was attempting to racketeer.
Hopefully, this case will establish a precedent for large tech companies to aggressively fight patent trolls. It remains to be seen if additional legislation will be introduced by the Obama Administration to potentially decrease the amount of patent-related lawsuits. However, if a legal precedent was established that suggested that patent trolls could be pursued as racketeers, it would greatly reduce the prevalence of such patent trolls and would likely be the longest-lasting and most attainable solution.
Friday, February 22, 2013
Blog 7: Samsung's Disability Lawsuit Crippled in German Court
The highly publicized smartphone patent war between Samsung and Apple swung further to Apple's side today. A German court struck down a Samsung injunction request to block the production of iOS devices with a text-to-speech function. Samsung alleged that Apple's VoiceOver infringes upon Samsung's patent on a text-to-speech-to-loudspeaker technology. This marks another setback for Samsung, which was ordered to pay over $1 billion in damages in Apple last year.
This legal battle indicates that the patent war over mobile devices has no boundaries. The patent war may remind people of the age-old adage--there are no rules in love and war. Samsung and Apple have proven their willingness to damage their ethical reputations in order to gain ground in the war for market share. However, it is unlikely that Samsung will suffer from its attempt to block sales of Apple's disabled-friendly iPhone, despite Samsung's snub of the blind and disabled. Consumers will likely chalk up the lawsuit as another desperate attempt for Samsung to gain increased sales from its Silicon Valley rival.
Source: http://allthingsd.com/20130222/samsungs-ill-conceived-apple-voiceover-suit-stayed-in-germany/?KEYWORDS=patents
This legal battle indicates that the patent war over mobile devices has no boundaries. The patent war may remind people of the age-old adage--there are no rules in love and war. Samsung and Apple have proven their willingness to damage their ethical reputations in order to gain ground in the war for market share. However, it is unlikely that Samsung will suffer from its attempt to block sales of Apple's disabled-friendly iPhone, despite Samsung's snub of the blind and disabled. Consumers will likely chalk up the lawsuit as another desperate attempt for Samsung to gain increased sales from its Silicon Valley rival.
Source: http://allthingsd.com/20130222/samsungs-ill-conceived-apple-voiceover-suit-stayed-in-germany/?KEYWORDS=patents
Friday, February 15, 2013
Blog 6: NFC Patent Trolling
One of the exciting new technologies in many Android phones is the existence of near field communication chips. These chips allow for smartphones to establish brief communications with another NFC enabled device. Google Wallet is a payment application loaded on Android phones that allows users to pay for physical purchases by swiping their phone near a register. There has been some adoption of this model in stores such as Macy's, Toys "R" Us, and American Eagle.
The development of this new market also promises that a new crop of non-practicing entities will be formed to litigate against Google and other patent holders. However, an article from TechCrunch (http://techcrunch.com/2012/04/06/do-we-even-need-nfc-for-mobile-payments-paypal-google-weigh-in-video/) estimates that NFC will not become a widespread technology and will not be integrated into modern infrastructure for another five to ten years. Additionally, Apple's resistance to adopt NFC in their iPhone 5 also reveals an ideological contrast in viewpoints. Apple appears to be short NFC and has resisted paying for additional chips and technologies to be placed into its devices, while Google has gone long on NFC and introduced it into its Android operating system. This reduces the potential targets of non-practicing entities, or patent trolls, as there will be less major corporations utilizing NFC in their devices.
It remains to be seen if NFC will prosper and die out, and both situations have significant implications for patent lawsuits.
The development of this new market also promises that a new crop of non-practicing entities will be formed to litigate against Google and other patent holders. However, an article from TechCrunch (http://techcrunch.com/2012/04/06/do-we-even-need-nfc-for-mobile-payments-paypal-google-weigh-in-video/) estimates that NFC will not become a widespread technology and will not be integrated into modern infrastructure for another five to ten years. Additionally, Apple's resistance to adopt NFC in their iPhone 5 also reveals an ideological contrast in viewpoints. Apple appears to be short NFC and has resisted paying for additional chips and technologies to be placed into its devices, while Google has gone long on NFC and introduced it into its Android operating system. This reduces the potential targets of non-practicing entities, or patent trolls, as there will be less major corporations utilizing NFC in their devices.
It remains to be seen if NFC will prosper and die out, and both situations have significant implications for patent lawsuits.
Blog 5: Insider Supplying: Apple and Samsung
Samsung and Apple have a complicated love-hate relationship. Samsung is a supplier of critical flash memory to Apple, yet both spend billions of dollars litigating over the very product that the flash memory becomes a part of. Samsung's unique position as a critical supplier to Apple gave it valuable, non-public insights into how large Apple projected the smartphone/tablet market to be. This inside information has spurred Samsung to spend massive amounts of money on capital expenditures and acquiring assets for its manufacturing business ($21 billion in 2012)
After a handful of generations of failed hardware and outspending Apple 2:1 on capex, Samsung finally developed a viable competitor to the iPhone in the Galaxy S3. However, Apple's lean and efficient product development team and limited product line has managed to maintain dominance of the domestic U.S. smartphone market, while Samsung's 37 diversified and affordable products have seized control over emerging markets. Is there any legal recourse for Apple, given that Samsung appears to have taken advantage of non public information in its rapid development of the iPhone competitors?
After a handful of generations of failed hardware and outspending Apple 2:1 on capex, Samsung finally developed a viable competitor to the iPhone in the Galaxy S3. However, Apple's lean and efficient product development team and limited product line has managed to maintain dominance of the domestic U.S. smartphone market, while Samsung's 37 diversified and affordable products have seized control over emerging markets. Is there any legal recourse for Apple, given that Samsung appears to have taken advantage of non public information in its rapid development of the iPhone competitors?
Sunday, February 10, 2013
Blog 4: Qualcomm and Snapdragon
Qualcomm has long dominated its particular sector of semiconductor and wireless communications. Qualcomm's development of the CDMA network used by major U.S. carriers such as Verizon and Sprint, and collect significant royalties from licensing their products. However, Qualcomm has also entered the smartphone processor market with Snapdragon platform. Snapdragon is potentially an extremely disruptive platform to the mobile platform, given its close unity with the Qualcomm communications technology and its integrated graphics processing technology.
Qualcomm's calculated acquisition of graphics and multimedia patents from the struggling computer chip company AMD has enabled it to create sophisticated and powerful chips that are quickly seizing market share away from traditional mobile chip powerhouses like Nvidia and Samsung (who manufactured chips for Apple).
I would be interested to learn if Moore's Law applies to mobile chips as well--with the additional caveat that mobile chips also become twice as power-efficient while continuing to be become faster and smaller every 24 months.
Relevant Link: http://www.youtube.com/watch?feature=player_embedded&v=uz0VdsBDEh0
Qualcomm's calculated acquisition of graphics and multimedia patents from the struggling computer chip company AMD has enabled it to create sophisticated and powerful chips that are quickly seizing market share away from traditional mobile chip powerhouses like Nvidia and Samsung (who manufactured chips for Apple).
I would be interested to learn if Moore's Law applies to mobile chips as well--with the additional caveat that mobile chips also become twice as power-efficient while continuing to be become faster and smaller every 24 months.
Relevant Link: http://www.youtube.com/watch?feature=player_embedded&v=uz0VdsBDEh0
Blog 3: Patent Marketplace
Would it be possible to securitize patents? Financiers in the bellies of investment banks have securitized almost every conceivable modern good, from car loans to home mortgages to pork futures. I believe that it would be very interesting to have a patent marketplace where small companies would be able to raise capital in the public markets. Additionally, a patent marketplace or a derivative-based patent marketplace would allow investors to speculate on the future value of a patent in the design of a future device. Additionally, companies issuing these patents might be able to structure a patent fixed-income security where the interest payments and the principal of the bond would be backed by the future cash-generating ability of the patent, whether it is licensed out or used for internal development.
Challenges to the idea of a patent marketplace are largely legal. Traditional initial public offerings are extremely complex in structuring and size and often require spending a significant amount of money to pay for financial and legal advisers. Small private start-ups looking to securitize their patents would be similarly forced to pay fees to have their patents listed on the open market and would likely have to disclose financial and operational information about themselves. Such a glut of information about a start-up whose patent may be highly innovative and yet susceptible to being copied would discourage small companies from listing patents. Large, established tech companies would likely not require additional funding for their patents (Amazon, Google, Apple already have enough cash as is), so the patent marketplace would likely be limited to middle-market sized tech companies between Series funding looking to generate publicity about its patent portfolio.
Challenges to the idea of a patent marketplace are largely legal. Traditional initial public offerings are extremely complex in structuring and size and often require spending a significant amount of money to pay for financial and legal advisers. Small private start-ups looking to securitize their patents would be similarly forced to pay fees to have their patents listed on the open market and would likely have to disclose financial and operational information about themselves. Such a glut of information about a start-up whose patent may be highly innovative and yet susceptible to being copied would discourage small companies from listing patents. Large, established tech companies would likely not require additional funding for their patents (Amazon, Google, Apple already have enough cash as is), so the patent marketplace would likely be limited to middle-market sized tech companies between Series funding looking to generate publicity about its patent portfolio.
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