An American jury recently announced that Samsung owes Apple over a billion dollars. This began in 2011, with Apple litigating patent infringement suits against Samsung, culminating in over 50 concurrent lawsuits around the world in July of this year.
The court case centred largely on trade dress – that is, the look and feel of products. Apple successfully accused Samsung of illegally copying design elements; however most of the damages awarded to Apple come from patent infringement. This included specific design implementation details in the Apple Operating System (iOS) like Bounce Back, the way your iPhone bounces back when you scroll to the end of a menu.
It is widely agreed within tech circles that the patent system is broken. Apple and Samsung’s dispute is one of many, and an example of the growing problems in the patenting of software and the pitfalls of the current system. The atmosphere of fear, hostility and anti-competition caused by these disputes is leading to a lack of innovation and is slowing the development of new and improved technologies.
In April, Facebook bought 650 patents from Microsoft for $550,000. Microsoft has, in turn, bought 925 patents from AOL, an American company focused on developing and investing in brands and websites. You could be excused for wondering what Facebook wants with all this intellectual property. To improve the user experience for millions of people? To make an Android app that isn’t completely shit? Well, maybe, but it’s more than likely that their buying spree was based on a desire to stock up their patent ‘arsenal’ due to the then increasing legal tension between them and Yahoo.
Patents are not protecting Intellectual Property; they’re being used defensively and offensively as weapons against other tech companies and their armies of lawyers. But often in cases such as Samsung v Apple, patents don’t hold up. Prior art is revealed, or it is decided that the invention is too “obvious”. So what’s the point in issuing patents if they aren’t going to hold up in court?
Patents are essentially an exchange between the inventor and the public, and are designed to promote progress and innovation. By applying for a patent, inventors are showing the public what they have invented, the “best mode” of building this invention, and providing enough detail that “anyone with ordinary skill in the art” can build it. However, this doesn’t mean that only the inventor can use it. They have the option to license out their method if they so choose. In Australia, if a patent has not been used after a period of three years, anyone may request a compulsory license from the government. This stops people from patenting a method and preventing it from ever being used. Patents in the US expire between 17 and 20 years after registration, from which point they are released to the public for free use.
The current form of patents is, however, not applicable to the software industry, fuelling disputes between big software companies. There is currently no difference between a patent for pens which work in the absence of gravity (Thanks NASA!) and one which documents the technique for watching a video on a phone whilst texting (Samsung own this patent). Clearly this is illogical.
Australian software developer Anthony Berglas explains, “Software is about building systems, not individual pieces. There are vast numbers of pieces in a software system, and there is a large amount of re-invention. Most ideas are relatively simple, and can be reinvented with a relatively small amount of effort.
“For this reason, patents tend to protect questions rather than answers. Patenters think about what problems we might need to solve in ten years time. Then, ten years later, other people solve these problems easily and independently, only to find that someone else had a patent on it. This in no way improves innovation.”
This caveat has seen the birth of companies not-so-fondly referred to as Patent Trolls. In July 2011 it was discovered by National Public Radio that while the company Intellectual Ventures claimed to create innovation and intellectual property through their in-house inventors, they made the majority of their income from lawsuits and licensing already-existing inventions. IV has received over $5 billion in funding from various tech companies including Microsoft, Intel, Sony, Nokia, Apple, Google and eBay in exchange for royalty-free licensing of its patent portfolio. In what venture capitalist Chris Sacca described as a “mafia style shakedown”, IV offers protection from patent lawsuits in return for funding.
Earlier this year, the Australian Senate passed the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011. While significant changes were made to the Patents Act of 1990, there were no specific changes regarding software patents. Nevertheless, there are some movements gaining traction in Australia. The Australian Pirate Party advocates reduced terms for software patents, and has argued in the past that software ought to be left out of the patent system altogether. If this happens, they claim that Australia would become a “safe haven from the patent storm”, driving software innovation within Australia.
Multi-billion dollar patent auctions, the quelling of tech start-ups through lawsuits from shady businesses, and the spending of millions on patent wars between tech giants such as Samsung v Apple are now common place. Many people believe that the patent system is irreversibly flawed, a relic of a different age, and should be scrapped. The solution, however, needs to be more nuanced. Reform to the patenting system is needed, but until such time as it arrives the loser is ultimately us.