SMARTPHONE LITIGATION
Smartphones are handheld computers capable of Internet browsing, sending and receiving emails, playing videos, not to mention making calls.
Information technology research company Gartner says that more than 80 million smartphones were sold worldwide in the third quarter of 2010, a 96 percent increase on sales in the same period in 2009. Market share in the smartphone sector is very valuable. Te main players are inventing—and securing patents for their inventions—as a means of differentiating their products from those of their competitors and carving out a greater share of the market.
Innovation in the smartphone sector has been followed by a high level of increasingly complex patent litigation between those competing for market share and looking to earn revenue from their patent portfolios.
Asserted patents cover a range of key hardware components such as touch-screen technology, as well as important soſtware technologies such as operating systems. Te companies involved in the litigation are oſten asserting multiple patents across various jurisdictions. For example, Nokia has asserted 46 patents against
Apple. In some cases, certain patents have been asserted in multiple jurisdictions—in Delaware and Wisconsin district courts, and the US International Trade Commission (ITC), as well as courts in Germany, the UK and the Netherlands.
Te number of companies that are either plaintiffs or defendants in pending and completed patent litigation in the industry is vast. Tey include Apple, HTC, LG, Motorola, Nokia, Research In Motion, Samsung, Sony-Ericsson, Spansion, Toshiba, Elan, Gemalto, Hitachi, Kodak, Kyocera, Sanyo, Sharp, Google, Microsoſt, Qualcomm, Oracle, St. Clair IP consultants, NTP, and Acacia Research and its subsidiary, Smartphone Technologies.
Horacio Gutierrez, corporate vice president and deputy general counsel at Microsoſt, says that smartphones are a product of the ‘open innovation’ paradigm. Commenting on litigation between Apple and HTC in March 2010, he said: “[D]evice manufacturers do not do all of their development in-house, but add their own innovations to those of others to create a product that users want.”
He explained that open innovation is only possible through the licensing of third-party IP
rights because this ensures that innovators are properly compensated for their investments. “Aſter all, technology just doesn’t appear, fully developed, from Zeus’s head,” Gutierrez said. “It requires lots of hard work and resources to create.”
Steve Jobs, Apple’s chief executive officer, went even further in March 2010. When Apple announced that it was suing HTC for infringing 20 Apple patents concerning the iPhone’s user interface, underlying architecture and hardware, Jobs said: “We can sit by and watch competitors steal our patented inventions, or we can do something about it. We’ve decided to do something about it. We think competition is healthy, but competitors should create their own original technology, not steal ours.”
An original smartphone can attract a loyal set of customers who are prepared to buy a new model every time one is released. Tis can lead to a potentially lucrative market share.
“Tere’s a fundamental fact with these consumers,” says Adam Seitz, a partner and patent litigator at Shook Hardy and Bacon LLP, based in Kansas City. “Once they find a smartphone or operating
14 World Intellectual Property Review March/April 2011
www.worldipreview.com
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