The Shield Has Now Become The Weapon; The Problem With Patents

Smartphones are the latest trend in technology. To someone from the 1950s, smartphones and the capabilities of today’s wireless devices would seem not less than magic and that was roughly 60 years ago. Technology for the last two generations has advanced with leaps and bounds. The smartphone owes its existence to mobile phones which in turn originated from radio controlled phones which in turn owe their existence to telephony and wireless communications and the great big daddy of all is the RF (radio- frequency) communication. All through the years, innovation, however pervasive, has been segregated into some sets of ‘patents’ which have certain inventors and assignees.  Inventors are the people who came up with the technology and assignees are the companies that own the technology after it has been documented and put into practice for commercial use.

Companies that do not own the patent and want to use the said technology, have to pay royalty to the owner or in other words have to license the patent from its original assignee and only then would it be able to use it in its devices; one of the examples is the most recent case where RIM (research in motion) licensed some patents from the Nokia corp. of Finland but failed to comply with the regulations which led to a very fresh patent lawsuit.

The ongoing Smartphone patent wars are about to enter a volatile new chapter as 4G-LTE technology assumes a dominant position in the marketplace. A recent survey of essential patents in LTE (long term evolution) has thrown up surprising results. Many companies have been known to hold the patent rights in bulk like Qualcomm, Ericsson and Samsung Electronics. Nokia also has some innovations credited to its name; but there are other players like LG and Motorola who have acquired technology patents in recent times. In all, there is an emerging market with competitive companies acquiring patents to protect its intellectual property.

The most interesting duel in the field of LTE is between Apple and Samsung. Interestingly, Apple, one of Samsung’s key competitors, held few 4G patents, and currently licenses 4G capabilities for its new iPad. With Apple’s relatively lower patent protection in 4G, and Samsung’s dominance, the marketplace was waiting for a radical shift which came in the form of Rockstar Bidco. (An alliance of the likes of RIM, Apple and Microsoft to achieve collaborative measures to safeguard their Intellectual Property) buying Nortel’s patent set for LTE 4G and reissue of that patent set to Apple. Apple now holds 1400 odd patents in the category and is one of the major players in the segment.

Undoubtedly, the 4G-LTE landscape is new territory that is destined to explode with activity as additional patents are granted in various categories, and both small and large industry players seek to affirm the value of their patent portfolios but are the new innovators really that free and bestowed with integrity with which they ought to innovate?

Experts speculate a fierce scene of ensuing battles across the market between companies which hold patents to obliterate the competition. The shield (patents which were supposed to safeguard one’s intellectual property) has now become the weapon. Nokia derives much of its operating business from patent royalties. Apple recently won $1 bn from Samsung in a mammoth lawsuit. Small organizations either don’t innovate for the fear of obliteration, or search for new spaces to innovate –those successful get bought by the giants in the market.

What do you think of this new trend? Share your thoughts with us.

Image Source | iplawforstartups 

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