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Patents are killing innovation, and Obama wants change

The mobile industry is infamous for its patent lawsuits, with Apple and Samsung being some of the worst culprits. But the Obama administration is looking a new legislation which could help to fix the issue.
June 6, 2013
Obama Hope

Patent lawsuits are a weary subject. It seems that we can’t go a week without hearing about one legal challenge or another. It’s an issue which affects a lot of businesses, especially in the U.S., but the mobile technology industry is undoubtedly the most unpleasant.

As far as mobile technology goes, Apple is clearly one of the worst of the worst, suing its competitors for some of the most frivolous “technological inventions” like lock screens and even the term “App Atore“. Fortunately, some of the courts have had the good sense to chuck some of Apple’s lawsuits out, but the company has still managed to inflict expensive wounds on its competitors by using legal action.

But they’re not the only one at it! HTC, LG, Nokia, and Samsung have all been challenging each other over various patent infringements on a wide range of technologies for years. In fact, Samsung has just recently setup a new business in the U.S. designed soled around acquiring and trading legal patents.

It’s been clear to anyone who’s been following these sorts of stories for a while that there’s not only a problem with the mindset of these companies, but there’s also issues with the law itself.

Fortunately it seems like President Obama is coming to the rescue, as The White House Task Force on High-Tech Patent Issues has proposed some new legislation aimed at helping companies deal with lawsuits brought about by patent assertion entities (PAE’s).

[quote qtext=”(These businesses exist) to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.” qperson=”Barack Obama” qsource=”” qposition=”right”]

These infamous “patent trolls” are known for acquiring as many patents as possible and then simply trying to turn a profit when another company brushes close to anything included in the PAE’s patent. To demonstrate exactly how much of a problem this has become, cases instigated by PAE’s shot up from just 25% of all patent cases in 2008 to 62% by 2012.

Image source: NPR

President Obama aims to tackle this problem by targeting companies which “don’t actually produce anything themselves,” and instead exist “to essentially leverage and hijack somebody else’s idea”. The proposed legislation will improve the processes of tying patents to their actual owners and have applicants disclose the “real part-in-interest,” give judges the ability to force company’s filing frivolous suits to pay the other company’s fees, and offering better protections for “off-the-shelf” uses by consumers and businesses who use technologies for their intended uses. There’s also a recommendation to look at the concerns about patents with overly broad claims, particularly in the context of software.

That sounds all well and good, but how does this apply to the mobile industry? Well it doesn’t deal directly with some of the issues, but there are definitely parts which will directly affect some of the types of cases we’ve seen over the recent years. This won’t put an end to the display technology lawsuits or software squabbling, but it could cut down on the rank stupidity of some of the disputes.

galaxy s4 vs iphone 5 5 back aa
One of the most recent cases resulted in a U.S. import ban on AT&T iPhone 4’s for infringing on Samsung’s CDMA communication patent.

For a start, it might make a difference to the types of patents which courts will consider and could help cut down on the number of legal battles fought in the future. The rules are aimed at preventing secondary companies from suing regarding technologies that they don’t actually own or make use of, which should hinder the likes of Samsung’s $25 million Intellectual Keystone Technology firm from trading in and using patents against Samsung’s competitors. The idea here is to clamp down on the business of dealing in patents, which will certainly help reduce the number of claims.

One of the major problems is the increase in the number of “protective” patents being acquired by big technology companies. Apple, Samsung, and Microsoft all take part. But by preventing companies from acquiring broad patents for technologies that they aren’t actually using, the legislation could put an end to a few of the more irritating cases. The key point here is reducing the broadness of patents, which will hopefully prevent companies from suing over similar technologies whilst still protecting innovation from direct rip-offs.

The move to sanction repeatedly abusive court filings could also directly affect the technology industry, preventing or at least deterring companies from repeatedly taking competitors to court over trivial matters, as it will become much more costly if they lose.

There are certainly some positive recommendations in there, but it remains to be seen whether these rules will make a huge difference to big technology company’s spending millions of dollars in court, or if the legislation will even be passed at all. But at least the problems have been recognised by those highest up the legal system, and hopefully something will be done about this shambles in the not to distant future.