SMARTPHONE LITIGATION
enjoin anyone or take anyone out of the market. Our aim is to get the fair, reasonable and non- discriminatory royalties that our patents and the patents of our partners deserve.
But Seitz says that a lot of the patents that are asserted by NPEs are not for technologies that are key to smartphones.
He explains: “Te reason for this is that the main smartphone players and other technology companies are holding on to the key patents for inventions that are moving the industry forward. What we’ve seen from NPEs are patents that are related to relatively trivial or not oſten used features. Te patents being asserted by the NPEs are not industry-changing patents.”
Crossing paths
are more progressive on their IP. Tey recognise that they can’t pay nothing for all of those patents and they really want to pay as little as possible.”
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Te cost of the litigation surrounding smartphones is adding up. When money is tight, it would make sense for the companies involved to be weighing the benefits of litigation against the cost of litigating against a host of companies, potentially for years.
Chernesky considers litigation to be an inefficient way of negotiating licensing deals and it seems that companies such as his can offer an alternative. But not everyone agrees that they contribute positively to the industry.
Intellectual Ventures buys patents, aggregates them into large industry-specific portfolios and provides licences to those portfolios to their customers. Intellectual Ventures’ investors include a mix of Fortune 500 companies, university endowments, institutional investors and individuals.
Chernesky says: “I think Intellectual Ventures plays a very important role in funding invention and providing investors with a way of recouping some their investment through licensing their technologies. In our experience, if you fund those inventors and give them an avenue other than litigation or licensing on their own, they’re going to take that money and continue to invest in new inventions.”
Acacia Research is actively involved in smartphone litigation and licenses patents
“ LICENSING THIRD PARTY IP RIGHTS SEEMS TO BE THE MOST AMICABLE SOLUTION TO THE LITIGATION SURROUNDING SMARTPHONE TECHNOLOGY.”
Licensing third-party IP rights seems to be the most amicable solution to the litigation surrounding smartphone technology, according to Sutton. “I do believe that there will be a host of settlements of these law suits and a host of licence and cross-licence agreements,” he says. “Companies will come to their senses.”
Any potential licensing agreements can take different forms, according to McLean. “Tere can be assertive-based licensing that looks at increasing revenue associated with patent portfolios,” he says. “Tere can be pools and partnership agreements set up.”
concerning smartphones to companies such as Microsoſt and Samsung through its dedicated subsidiary, Smartphone Technologies. It also counts AT&T, a telecommunication company, as a licensing customer. Acacia either owns patents transferred to it or has the exclusive right to license patents. It controls more than 300 patents related to smartphones.
Paul Ryan, Acacia’s chief executive officer, says that companies come to Acacia if they don’t want to license or enforce their patents themselves.
“We’re an outsourcing partner,” he says. “We’re deal-makers. Anyone can file a lawsuit, but we understand that companies have plenty of royalty obligations, and litigation can significantly add to these obligations. We use litigation as a background for negotiation. We’re not looking to
18 World Intellectual Property Review March/April 2011
He explains: “Look at the Microsoſt/Nokia partnership—part of that will be a patent licensing deal. It all comes down to licensing, but there are a lot of different flavours of how licences can be structured, and how to bring different parties into that can make it less of a conflict-type situation and more of a partnership-type situation. Right now it doesn’t seem like many of the players are thinking along those lines.”
Patent litigation is a commercial tool. It can remove competitors from the market, or secure licensing revenues to fund invention. The remedies available to patent holders are effective, yet the process for getting them is flawed. It’s costly, time-consuming and potentially painful. Open innovation has created a technology that combines innovation from a host of companies and inventors, so patent infringement is likely. Companies and inventors have to decide whether possible infringement is worth a share of the valuable market. Those that want to be paid their dues have to decide what their patents are worth and secure the necessary licences. Litigation will continue to play a major role in this.
www.worldipreview.com
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