Innovating In A World Of Patent Lawsuits
This fall, Apple once again won the dubious honor of dominating the conversation on patent infringement.
Then, it scored a victory when it won a patent ruling against Samsung in the U.S. appeals court over the same feature, plus two others (autocorrect and data detection). As expected, Samsung is appealing the ruling.
Then, it took a hit when a federal jury decided that Apple infringed on a 1998 University of Wisconsin-Madison patent covering performance-improving processing technology. As expected, Apple is appealing the ruling.
Apple seems to get caught in lots of patent fights. Since 2009, Nokia has sued Apple (they settled), Apple has sued HTC (they settled), Kodak sued Apple (Kodak is appealing), Motorola Mobility sued Apple (Apple is appealing) and Apple and Samsung filed more than 40 lawsuits against each other (still fighting it out in the U.S.). The list goes on.
With so much energy spent in patent lawsuits, inventors have to wonder: What is the point of the patent system, and what should they do to win?
What Is The Point Of Patents, Anyways?
The U.S. Patent Office’s website has a quote that explains the intended benefits of the system:
“By protecting intellectual endeavors and encouraging technological progress, the USPTO seeks to preserve the United States’ technological edge, which is key to our current and future competitiveness.”
The keywords are “protecting” and “encouraging.” The system is meant to protect inventors from the competition, and this protection should encourage inventors to innovate prolifically. However, the system as it stands today falls short of these two goals.
First, protection. Are patents good at preventing competitors from entering your space? Not at all. Someone skilled in the art can take the same problem, and with hard work and ingenuity find a slightly different way to solve that same problem — bypassing the whole infringement argument.
Patents are better for playing defense than offense. By filing a patent, an inventor makes sure no one can patent the same thing after the fact. This protects their “freedom to practice.” It makes sure no one can put them out of business for marketing their invention.
Second, encouragement. Given the dubious protection offered by patents, does the system encourage or discourage people from inventing? I would argue that it has no effect, whatsoever. Just look at the Apple v. Samsung case. For all the money, drama and press, has it changed anything about how Apple or Samsung does business? Not at all. “Apple has won every round,” said Michael Risch, a professor of law at Villanova University School of Law. “But the reality is it hasn’t actually slowed Samsung down.”
Should Inventors Still File Patents?
If massively successful technology companies like Apple, Samsung and Motorola Mobility spend years suing each other with little business results to show for the effort, should inventors bother to file patents at all? It depends on the industry vertical.
Inventors need to understand how the system works, and figure out how to succeed within this system.
There are many thought leaders who argue that software patents make no sense. Software companies with deep algorithms are often better off leaving those algorithms as proprietary technology — this prevents competitors from reverse engineering their solutions by reading their published patent applications. Business logic and user experience are not reasonably protectable by claims, either.
For software companies, I would posit that the only kind of utility patent worth filing is a systems patent that outlines a novel way of integrating a system to provide an innovative end-to-end solution. That, and design patents, can make sense. Played properly, such systems patents on software solutions could significantly improve the valuation of a company.
For hardware companies, the situation is different. Hardware can sometimes be reverse engineered by doing a careful teardown. So it is paramount that anything physically visible in the system architecture be covered by a good set of patents. One would need a good utility patent on the overall system to cover the end-to-end solution, in addition to a constellation of utility and design patents covering components in the hardware architecture.
Patents may not encourage innovation per se, but they don’t have to retard innovation. Inventors need to understand how the system works, and figure out how to succeed within this system. With the help of a good patent attorney, an inventor should be able to craft an intellectual property protection strategy that can remove obstacles and help their business achieve market success.
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