NEWS ANALYSIS Rights issue


Legal disputes mark a new chapter in the handset sector’s story. It’s no longer just about being able to innovate in design and functionality, it’s about using acquired patents as both sword and shield.


successfully done so in Germany, where it won an injunction to block the sale of the 10.1” version of the Galaxy S Tab. Meanwhile Google splashed out $12.5bn on Motorola’s mobile division over the summer, with the handset vendor’s 17,000 patents the prime attraction. The search firm also recently purchased 1,000 patents from IBM and has been passing on some of the patents that it has acquired to Android partners, such as HTC, so that they can countersue Apple. And with Samsung believed to be readying a lawsuit


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aiming to ban the sale of Apple’s iPhone 5 in Korea when it launches, and numerous firms in the bidding for thousands of valuable patents held by InterDigital, this patent war is showing no signs of a ceasefire.


Where once patents were a means of


protection, they could become a means of suppression.


But analysts have suggested that, inherent in this


strategy, is a risk that vendors shift their focus on innovating and creating the next wave of technology to revolutionise their offerings, to the use legislation to stifle the attempts of their competitors to bring choice and variety to the market. Where once patents were a means of protection, they could become a means of suppression. It is understandable that Apple would be irked by the


plethora of devices and software that piggy-backed on the success of its own products. A touchscreen device with an accompanying applications store through which users can purchase their own software is something that the Cupertino-based company can rightfully claim as a first. And it’s not just about product innovation. Apple’s bid to stop the sale of Samsung Galaxy S Tablets in Germany, and potentially across the EU (bar Netherlands), was based on similarities in the appearance of the devices rather than its functionality.


This is familiar territory for product pioneers. Polaroid


won a lawsuit in 1985 to prevent Kodak’s copycat instant camera from being sold in the US. More recently, in 2000, Hoover’s Triple Vortex vacuum cleaner was banned from sale after the company was found guilty of infringing James Dyson’s patented vacuum cleaner technology. Apple is filing lawsuit after lawsuit. It currently has


some 23 suits ongoing with Samsung alone over patents. Affronted by Apple’s behaviour, its competitors, seeking


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ot unusually, Apple has been on the offensive of late, attempting to ban the sale of competing devices from HTC and Samsung in a number of markets. It has


to argue that technologies used in their products are not Apple’s intellectual property, are now purchasing patents to strike back at the firm. Out of the fray some unlikely alliances are appearing.


Microsoft has set up a holding company, owned in equal parts with Apple, EMC and Oracle, which it has used as a vehicle to acquire patents from Nortel and Novell, and has reportedly managed to forge a scenario whereby it gets a $15 royalty for each Android device shipped by Samsung, after having agreed to license its patents to the manufacturer. Meanwhile Google gets no kick-back at all from the sales. Microsoft and Apple used to be fierce competitors, but they are now joining forces. Is there a common enemy that has united the two? Yes. Google, according to the ‘Paranoid Android’ vendor. The


company believes its competitors are ganging up on Android, in order to raise the costs involved with being an Android partner. Those views seemed to be given credence by the US


Department of Justice over the summer. Having granted CPTN the patents it sought from Nortel, the DoJ is now launching an investigation into whether the firms’ freshly- bought patents were purchased with a view to unfairly blocking take-up of Android handsets. Google’s chief litigation officer David Drummond vented his


anger in a recent blog, claiming Android’s success has yielded “a hostile, campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.” In response, the company is teaming up with the


hardware manufacturers that provide Android-based products, as ultimately, its aim is to get the Android ecosystem as widespread as it can. “Google has a business model where they are not


making money from hardware but they want their software to be everywhere so that they can capitalise on that,” says Malik Saadi, principal analyst at Informa Telecoms and Media. Saadi adds that Google’s acquisition of Motorola will not deter hardware partners from working with it, because it has acquired a strong patent portfolio to protect not only Motorola, but the whole Android ecosystem. “All Android partners will, in fact, have a vested interest in welcoming Google’s acquisition of Motorola,” he says. So what will it take for the patent-battling to end and


for normal service to resume—and when will these vendors stop trying to get one over on each other in the court room and instead go back to doing their talking with new exciting, innovative products? “Each side is arming themselves with patents. If


everyone is armed equally, there’s very little advantage that one side has over the other, at that point it really comes down to the much more important criteria: how many devices do they have, the quality of those devices, and most importantly, how customers embrace those devices,” said Michael Gartenberg, analyst at Gartner. And the sooner these firms take their battles out of the


courtroom and back onto retailers’ shelves, the better for the sake of innovation. n


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d.sahota@informa.com


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