Kenny Hemphill
As Microsoft sees it, its patents have been infringed by Android, and it’s willing to sue to enforce them. Nothing unusual in that. It’s the fact that it seems to be focusing on handset makers, rather than Google itself, that makes many think that this is about competition rather than patent enforcement and royalties.
By persuading companies such as HTC to pay it licence fees, with the threat of a lawsuit if they don’t play ball, Microsoft scores twice. It generates revenue directly from the licence fee, and it pushes up the cost of Android to the manufacturer, making it a less attractive proposition to them and, because the cost will eventually be passed on, to the consumer. Thus Microsoft’s competitive position in the market is strengthened. So far, only HTC is known to have agreed a licence fee with Microsoft. Motorola refused and is being sued.
It would be far easier for Microsoft to negotiate directly with one company than the dozens that manufacture phones. However, the chances of Google agreeing a settlement are slim, and it has deep enough pockets to keep Microsoft battling it out in court for several years. By targeting less-wealthy businesses, Microsoft can use the threat of a lawsuit much more effectively.
Even that has a degree of logic in the context of the mobile phone market. Why go after Acer and Asus, though, whose mobile phone sales are tiny compared with the likes of Samsung? The answer, say the conspiracy theorists, lies in the plans those two companies have to ship portable computers running Android. Microsoft has already seen netbooks running Linux eat some of its market share, and we all know that Mac OS X is also putting big dents in it. It will feel that it has to do everything it can to prevent Android machines gaining a foothold.
The saga is a great example of how patent laws the world over are now doing the precise opposite of what they were intended to do, which is promote creativity and innovation. Whether it’s poorly drafted patents that are far too broad, the years-long backlog in patent offices, or the patent trolls who generate billions of dollars by buying up patents and then using the courts to enforce them, the patents system is falling apart.
The necessity for change has at least been recognised, both here in the UK and the US. In March this year, then-minister for intellectual property David Lammy commissioned a report to uncover the extent of the problem. That report estimated that there were 4.5 million outstanding patent applications around the world, and 730,000 in the US alone. As part of its recommendations for a solution, the government championed greater international cooperation. At present, if a multinational organisation wants to file a patent in five different countries, it has to file five separate applications that meet five different sets of regulations and will be assessed by five different patent offices.
Better global cooperation could mean that only one application would need to be filed, to one office, and if granted would then apply in all five territories. That would cut down on both the amount of money spent preparing and processing applications and on the backlog of applications at each patent office. The result should be more tightly drafted patents.
In the US, Senators Orrin Hatch and Patrick Leahy introduced a bill to the Senate in March 2009 called the Patent Reform Act. The bill was very similar to a 2007 bill of the same name that failed to make its way through the legislative process.
The aim of the bill is to bring US patent laws into line with Europe and the rest of the world. It also seeks to introduce what it calls ‘reasonable royalty’ provisions that would change the way damages are calculated and would reduce the likelihood of payouts that amount to tens or hundreds of millions of dollars. Leahy claimed the provisions in the bill would ‘improve the quality of patents and remove the ambiguity from the process of litigating patent claims’. That bill, like its predecessor, has plenty of opposition from those who claim it would devalue patents and encourage infringement.
One thing is clear: without serious reform, patents will become the playthings of wealthy companies, many of which exist only to exploit patents they’ve acquired, and continue to inhibit the very creativity that has driven advances in technology for decades.
