Yesterday Apple, IBM, Microsoft and other large corporations announced the Partnership for American Innovation in an effort to, as The Verge put it, "make patents cool again" or, as Reuters described it, to advocate "go slow" positions on U.S. patent reform. ZDNet's Steven Vaughan-Nichols, who likes open source far better than patents, thinks the PAI is, for the time being, "foggy on the details".
It's not purely a coincidence that Apple would take a more active role than ever before in patent policy during the opening week of the Apple v. Samsung II trial in California. The exact timing of the announcement was driven by increasing momentum behind the push for patent reform: on the same day, the Senate had already intended to vote on its version of the reform bill. But the fact that Android is eating Apple's lunch is undoubtedly the primary reason for Apple's decision to position itself so clearly on patents and patent enforcement. It's probably not just the #1 reason, but also the #2, #3, #4 and #5 reason.
It's no secret that I'd like to see more patent reform happen than those companies. This never prevented me from doing consulting work for Microsoft, which does support some reform proposals I like, such as fee-shifting and greater transparency. And while I'm not excited about a pro-status-quo patent advocacy initiative, I respect those companies' interests in and positions on intellectual property.
The world of politics is too complex (especially on one of the most complex policy areas of all) for binary classifications, but I see a certain antagonism here. In my opinion, the two most significant recently-formed patent-related advocacy groups are the pro-reform Main Street Patent Coalition and the "go slow" PAI with Apple, IBM, Microsoft and their (mostly) big pharma friends.
This is a regrettable rift between some (not all) large creators of information and communication technologies and key ICT users such as advertising agencies, banks, hotels, realtors, restaurants, retailers, grocers, printers, travel agencies etc. -- the members of the Main Street Patents Coalition.
Even more regrettable -- and this now takes us back to smartphone patent issues -- is the fact that the PAI is taking positions adverse to those of the Application Developers Alliance, whose members include Google and Samsung. Obviously, app developers are not key to IBM's business. But as I said on Twitter yesterday, I'd really like Apple and Microsoft to take into consideration the needs of small app developers in connection with patent reform because app developers are key to their platforms. It's great that Apple and Microsoft (like Google and Samsung) organize large developer conferences. It's great when they improve their developer tools. But I would also like to see them express their love for developers in connection with patent reform, and to promote not only what may give them an advantage against their key rival, Google, but also what helps small app developers against patent trolls.
I'm not criticizing them. I am, however, urging them never to position themselves against app developers in the patent policy context. I'm not saying they've done it so far in the current reform process; I just hope they won't. If Apple and Microsoft jointly opposed a reform proposal that would clearly benefit app developers who have to fend off patent trolls while Google- and Samsung-backed groups like the Application Developers Alliance and the Main Street Patent Coalition support the same proposal, they would unnecessarily alienate an audience that is key to their platforms. Ideally they should look for ways to support app developers.
While many app developers don't even want to file for patents on the differentiating features of their own products, I'm working on that myself and would encourage other app developers to do the same. So I don't believe that patents and app developers are antithetical. But patent trolls and app developers don't mix.
The highest-profile patent dispute in the world, Apple v. Samsung, is watched by most if not almost all of those who participate in the patent reform debate. The things that happen there teach lessons and send out messages that influence policy decisions.
The mere fact that this is a major dispute with numerous patents asserted in multiple countries is not sufficient to make a case for far-reaching reforms. These litigants can handle it. It is not, in and of itself, a terrible thing. But there are certain things that have happened in this dispute that are relevant to some of the key issues in the policy debate.
The first one is patent quality. That's a worldwide issue, but an even bigger problem in the U.S. than elsewhere. While 10 European judges have unanimously found that Apple had not invented slide-to-unlock, Apple is now using a U.S. patent from the same patent family at the ongoing trial as its star patent. It showed to the jury how Steve Jobs unlocked a device with a sliding gesture when he demoed the original iPhone. But no one told the jury that slide-to-unlock, even though in a graphically less elaborate form, already existed before. People who don't know about this will look at Apple's presentation and will be in awe of this incredible example of American inventiveness -- when in reality a small Swedish company had made slide-to-unlock available to customers before the iPhone and before Apple filed its patent. Having attended several hearings, trials and announcements of negative decisions on this patent over here, what is happening in California looks to me like reports from a parallel universe. By the way, Apple has so far not been able to defend a single patent claim of several patents that came to judgment in Germany (where Samsung also lost at least one patent) and at the European Patent Office.
Patent quality is not only a question of validity. Another important question to ask is whether the true and valid scope of asserted patents justifies the whole costly and protracted process of patent litigation or merely requires someone to make minor modifications to a product in order to be legally above board. For example, a U.S. import ban is in force and effect against any Samsung products that would infringe on the "Steve Jobs patent", but no one has even noticed this because the ITC had simultaneously with the import ban cleared Samsung's workaround. In some cases, workarounds are a good thing for innovation, such as slide-to-unlock. It's a complex issue. But the fact that Apple has, in more than four years of Android patent lawsuits, not proved yet that it owns any complete feature other than rubber-banding shows that a lot of patent litigation is much ado about nothing if a deep-pocketed, sophisticated defendant like Google or Samsung is being sued (in those cases, the patent system has shown a self-healing capability that I admittedly underestimated before). Still it can do serious harm to little guys, such as app developers, who can't afford to spend millions of dollars on protracted lawsuits and the legal advice they need to come up with viable workarounds.
It took Apple hundreds of millions of dollars in litigation costs (and Google and Samsung presumably spent hundreds of millions as well) to find out, after all these years, that apart from some design patent issues Samsung had years ago, the only feature that Apple can so far prevent Android device makers from offering is rubber-banding. That's ridiculous.
"Might makes right" is not fair. There must be cost-efficient ways to challenge bad patents. But based on what happened in Apple's first California lawsuit against Samsung, Apple may not be exceedingly interested in ways to get patents invalidated before an infringement case goes to trial. The most valuable one of Apple's three software patents-in-suit in the first case (most of the damages there relate to design patents, not software patents), the '915 pinch-to-zoom API patent, has meanwhile been rejected by the United States Patent and Trademark Office and Apple had to file an appeal to the Patent Trial and Appeal Board. The process isn't over yet, but if the Federal Circuit also found the patent invalid, then there would have to be a third trial because the previous two damages verdicts ($929 million in total) were based on the assumption that this patent was valid, but damages were not determined on a patent-by-patent basis.
I hope Apple won't promote policies that enable holders of patents of questionable validity to gain undue leverage. In Europe it's on the good side with the UPC Industry Coalition. The question is what it will do in the U.S. now.
Then there's also the subject of "patent trolls" -- the key term in the whole patent reform debate. Apple, Google, Microsoft and Samsung (and many others) are all members of the UPC Industry Coalition promoting balanced patent enforcement rules in Europe, and that industry coalition also stresses the growing problem of patent trolls. For the most part, though, the term "patent trolls" is used by the pro-reform movement, not the "go slow" guys. But whoever uses it, nobody can really define it. Non-practicing entity (NPE)? Not all of them are trolls. Patent assertion entity (PAE)? How is that different from an NPE?
Apple stipulated in the build-up to the ongoing trial that it does not practice three of the five asserted patent claims (click on the image to enlarge):
The parties disagree on whether Apple practices the other two claims-in-suit. But for a majority of the claims-in-suit, Apple conceded before the trial that it doesn't practice them. It just argues so far that it practices other claims of the same patents than the asserted ones. On a claim-by-claim basis, Apple has NPE status for at least three claims, as opposed to fighting against "copying". This shows how difficult is to define what a "patent troll" is. Apple isn't a troll, but it's trying to gain maximum leverage from its patents, and some people don't like that.
Very closely related to the subject of "patent trolls" is that of patent transfers. Patents are an asset class and there's no point in considering all patent transfers inherently negative. But sometimes patent transfers do raise issues, such as in the context of privateering.
In Apple v. Samsung II, the pot is calling the kettle black in terms of assertions of patents acquired from third parties. Apple told the jury (and will continue to stress) that Samsung had acquired its two patents-in-suit (from U.S. inventors, by the way) and wants the jury to somehow consider the related infringement allegations less legitimate than Apple asserting patent claims most of which it conceded it doesn't even practice. But Apple itself sued all three leading Android device makers at the time -- HTC, Google's Motorola, and Samsung -- in Germany (where injunctive relief is a given except in connection with standard-essential patents) over a multilingual character set patent it had acquired from Mitsubishi. The Mannheim Regional Court strongly doubted the validity of that patent, and rightly so: the Federal Patent Court of Germany invalidated it. That patent could have caused serious harm to Android in Germany (where Android is now far more popular than iOS) if Apple had been able to enforce an injunction even for a limited period of time.
Patent hoarders like Intellectual Ventures and Acacia must love it when they see companies like Apple and Samsung suing each other over acquired patents.
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