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  (Source: New Line Cinema)
Patent reform is crucial or electronics industry will be consumed in self-destructive chaos

It's simple math.  And it illustrates how broken the international patent registration and court system is when it comes to intellectual property.

I. The System is Broken

Microsoft Corp. (MSFT) recently revealed that tentative Google Inc. (GOOG) acquisition Motorola Mobility wanted $22.50 per device for a series of video codec patents.  This request was clearly ridiculous -- as Microsoft states, the typical licensing rate for a collection of standards patents under fair, reasonable, and non-discriminatory (FRAND) terms is around $0.02 USD per device.

FRAND is actually a model system in that it is inherently an exemplar in the world of intellectual property.  It represents fair compensation to innovators, yet opens key developments to the masses, allowing them to push the envelope.

The issue is that FRAND is on the verge of dying.

FRAND patents are for friends
[Original Image: Cayusa/Flickr; modifications: Jason Mick/DailyTech]

The would-be murderer is patent litigation.  Keep that $0.02 USD patent licensing figure in mind.  Now imagine you patent a trivial user interface gesture, which is essentially some sort of variant on drag and drop.  Suddenly you can ban a competitor's device which retails for $200.00 USD.

That's right -- based on recent court decisions, almost trivial non-FRAND patents [1][2][3] are being rewarded with rulings worth 10,000x or more the cost of traditional licensing fees.

This abysmal state of affairs not only encourages patent trolling, it offers a strong financial incentive to stop any FRAND related work.  If your competitors go non-FRAND and your company works cooperatively under FRAND guidelines, your firm will almost certainly be dealt a series of crippling court rulings under the current patent atmosphere.  Try explaining that to investors.

II. Some Suggestions for Improving the System

User interface patents, firmware patents, and their ilk certainly represent a philosophy of protecting software innovators.  That's a noble goal.  However, in the future, it would be good for the patent system to consider a couple of points:

1. The potential for alternatives

Apple recently patented sending an interrupt to a processor in order to underclock it.  Now, interrupts have been used for decades as the fundamental firmware mechanism to deal with immediate events.  And a processor's power circuitry must receive some sort of guidance in order to underclock a chip.

Thus, while Apple's patent may be novel (assuming a lack of prior art), there are few feasible alternatives.  The patent system should note this kind of situation and put a higher pressure to reach a fair licensing situation in this kind of case.  You can't patent the laws of physics, so to speak, and even if you could, the least the system can do is to force you to license it.

2. The importance of a patent

Thus far Apple has secured short bans on Android products for relatively trivial features -- swipe to unlock, fast scrolling algorithms, and a "bounce" animation when performing drags or pinches.

In terms of the iPhone's net worth these represent maybe 1/500th or less of the total software innovation in the device.  Thus it might be fair to charge collectively $1.00 USD per device for them, but seeking a ban or exorbitant fees from competitors who use similar effects/inputs is extremely punitive and unfair.

3. Eliminating repetition

The mobile industry is awash in a deluge of repatents -- companies taking personal computer innovations, putting a mobile spin on them and then filing for a patent.  Apple's swipe to unlock is essential a touch screen version of the time immemorial drag-and-drop.

Motorola unlock
Motorola's forbidden swipe to unlock gesture [Image Source: YouTube]

If such repeats are allowed, the patents should at least be flagged.  Again such a flag could be used as a basis to force a licensing settlement and/or reduce the maximum damages a company can seek to collect in a suit.

4. Force Companies to Reach Licensing Settlements

Barring a handful of patents where the IP describes essentially an entire product, there should be strict guidelines forcing companies to settle software IP disputes.

A reasonable place to start would be to charge x10 the going FRAND rate (e.g. $0.20 USD for licensing a portfolio of IP).  In FRAND terms, this would not be fair and reasonable.  But the approach would bring into line the risk-vs-reward equation of the FRAND-vs-non-FRAND filings, versus the current hyper-inflated value scenario which essentially tilts the value scale in the direction of non-FRAND so far that the balance bar breaks.

III. Don't Want to Fix the System?  Prepare for a Dying Industry

As the industry stands right now, FRAND is on the verge of collapse.  Google and its partners are fast learning that playing fair does not work.  Their FRAND suits illustrate a willingness to play dirty.  And that new perspective will likely soon manifest in a cessation of FRAND work.

This is a horrible state of affairs for the industry.  By allowing injunctions that exceed FRAND payouts 10,000-fold, the global intellectual property sphere is revelling in the creation of an anti-competitive, anti-technology environment.

This system promises an ugly future in which mobile communications are slow (as it would be uneconomical to participate in FRAND communications standard development), there interfaces will be clunky (a company will be limited to a handful of UI elements for fear of infringement), and product quality will be decreased to offset an inevitable slew of licensing fees.

Cavemen fire
Prepare for the future of technology if the patent system is not reworked.
[Image Source: Museum of Natural History]

This is a system where nobody wins.  And this is the system that will result if drastic action is not taken, right now.

Is Google/Motorola/Samsung playing dirty?  Yes.
Is Microsoft milking the licensing system [1][2]? Yes.
Is Apple acting as an anticompetitive litigation abuser? Yes.

In a macroscopic sense, the problem is not these companies.  The problem is the intellectual property system.  This argument must not be lost amid our personal prejudices, lest the increasingly hyperlitigious atmosphere destroy the innovative devices we enjoy today, regardless of who makes them.


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Pointing out the bias
By testerguy on 2/29/2012 8:22:42 AM , Rating: -1
As usual, a ridiculous article of drivel, where to start?

First - the title:

quote:
Analysis: Apple is Seeking 10,000x FRAND Rates in Patent Lawsuits


1 - First of all, this is poorly worded. On first read, it suggests that Apple are trying to seek rates over either 10,000 FRAND patents, or a FRAND patent for which they want to charge 10,000x the 'fair' rate. Clearly rubbish.

2 - Apple isn't 'seeking' any rates at all. Trying to claim that seeking a ban on products because they illegally infringe on your patents is the same thing as demanding 10,000x FRAND rates, is ridiculous.

3 - What Apple is actually seeking, is to prevent their competitors copying their patented ideas. Which they are absolutely entitled to do so

Now, onto the content - (if we can even call it that):

quote:
The issue is that FRAND is on the verge of dying. The would-be murderer is patent litigation. Keep that $0.02 USD patent licensing figure in mind. Now imagine you patent a trivial user interface gesture, which is essentially some sort of variant on drag and drop. Suddenly you can ban a competitor's device which retails for $200.00 USD.


Wow, what a complete logical fail. First you try to suggest FRAND is collapsing because of a non-FRAND patent case which has nothing to do with FRAND. Secondly, you missed a step in your little scenario. First, you patent a gesture which is sufficiently different and innovaitve in the eyes of the law to hold up in court against defences of obviousness and prior art (none of which has been proven in the case you linked yet, by the way). Second, one or more of your rivals has to infringe on said patent by copying your idea or implementation - not something that they necessarily have to do , unlike FRAND patents which are essential to the device. Finally, given criteria 1 and 2 are met, you have the right to force them to remove the copied parts or have their devices banned. In other words, it PROTECTS innovations and technology. Exactly what it was intended to do.

Your sole argument really, (and this is article number 6 of yours on this garbage) is that you don't agree Swipe-to-unlock should be patentable. We got that after the first few articles. This article is nothing new. You should wait to see if the patent is even found to be valid, before going on a rant about the patent system (and not the FRAND system by the way).

quote:
That's right -- based on recent court decisions, almost trivial non-FRAND patents [1][2][3] are being rewarded with rulings worth 10,000x or more the cost of traditional licensing fees.


This is just complete nonsense. Apple doesn't gain any fees, for a start. Secondly, the banned device manufacturers can simply remove the offending copied material, and continue to sell. Finally, it doesn't apply to all of their devices, only those in the country in question - and it doesn't cost the manufacturer what they sell the phone for. Complete misleading nonsense, tbh.

quote:
it offers a strong financial incentive to stop any FRAND related work. If your competitors go non-FRAND and your company works cooperatively under FRAND guidelines, your firm will almost certainly be dealt a series of crippling court rulings under the current patent atmosphere. Try explaining that to investors.


This, again, is complete nonsense. FRAND patents by their very nature only become so 'important' and fundamental to a device BECAUSE they are FRAND. If the manufacturer in question elected not to sign the VOLUNTARY FRAND agreement, the technology in question would not become essential, because all the competitors would work around it, developing equivalent technology which does the same thing in a different way. The end result is that, take for example Motorola, loses millions on lost license opportunity. The fact that a company signs up to a FRAND agreement is a strategic choice on their behalf , so they must feel that it is beneficial. Finally, this sentence misleadingly tries to suggest that a company working under FRAND guidelines will necessarily be dealt 'crippling court rulings' - sorry, but again, that only applies if they illegally infringe on patents - and it would be the case whether they had signed up to FRAND on other patents or not.

That's just the first paragraph - honestly this is the worst and most biased article ever, even for you - and believe me that is saying a lot.




RE: Pointing out the bias
By bug77 on 2/29/2012 8:42:50 AM , Rating: 1
quote:
That's just the first paragraph - honestly this is the worst and most biased article ever, even for you - and believe me that is saying a lot.


Not coming from you, it doesn't.


RE: Pointing out the bias
By alexwgreen on 2/29/12, Rating: -1
RE: Pointing out the bias
By Cheesew1z69 on 2/29/12, Rating: 0
RE: Pointing out the bias
By alexwgreen on 2/29/2012 11:14:10 AM , Rating: 2
Actually, I am a unique poster, by the name of Alex Green. Clue is in my account name. Though in the absence of any way of proving this, I will have to accept that you will never be satisfied.

I wasn't intending to praise Testerguy so to speak. But I DO agree with his logic IN THIS INSTANCE.


RE: Pointing out the bias
By Cheesew1z69 on 2/29/2012 11:28:17 AM , Rating: 2
quote:
Clue is in my account name
That proves nothing . It's quite amusing you are using exactly the same style wording, typing, terminology as he does. But you want us to believe you are not him and your very first post, sounds exactly as he would type it, is praising him.

Quite funny to say the least...


RE: Pointing out the bias
By alexwgreen on 2/29/2012 11:37:22 AM , Rating: 2
So how would you like to go about my proving my independence.

In fact, scratch that. There's clearly only room for one rational poster here, and that position is occupied. I'm out!


RE: Pointing out the bias
By hexxthalion on 2/29/2012 11:50:16 AM , Rating: 1
there's no point to feel offended or angry about comments here. it's anti-apple through and through and it's apparently filled with not very bright people who either lack knowledge or common sense, in some scenarios both.


RE: Pointing out the bias
By Cheesew1z69 on 2/29/2012 12:09:10 PM , Rating: 2
quote:
very bright people who either lack knowledge or common sense, in some scenarios both.
They are called iTards...


RE: Pointing out the bias
By muhahaaha on 2/29/2012 1:41:23 PM , Rating: 2
and you, sir, only post Apple propaganda, as shown on your posting history. Not one informative, funny, or useful post ever, just iSheep nonsense.


RE: Pointing out the bias
By hexxthalion on 3/1/2012 5:39:43 AM , Rating: 1
that's a bit of a stretch. I own several devices and work with various platforms - I own both iOS and Android based devices. I do hate fanboys from both camps but I'm not definitely a fanboy of either. so you're talking shit


RE: Pointing out the bias
By muhahaaha on 2/29/2012 1:37:19 PM , Rating: 2
That's easy. Brand new account with 4 posts today only.

alexwgreen alexwgreen has posted a total of 4 comments at DailyTech, the average comment rating was 1.25. Below, is a listing of alexwgreen's latest comments.

Date Selection

Comment Date Rating
RE: Pointing out the bias Feb 29, 2012 11:37 AM 2
RE: Pointing out the bias Feb 29, 2012 11:30 AM 2
RE: Pointing out the bias Feb 29, 2012 11:14 AM 2
RE: Pointing out the bias Feb 29, 2012 9:56 AM -1


RE: Pointing out the bias
By alexwgreen on 2/29/2012 2:07:42 PM , Rating: 2
Where does it say that my account is brand new?

Just because I didn't post till today, doesn't mean I haven't had the account active for over a year. To be honest, I wish I hadn't bothered. I made it quite clear in my post that my personal opinion of Apple is not relevant to my recognising when someone has, with justification and in a reasoned manner, pointed out the obvious lack of independent thinking in the above article.


RE: Pointing out the bias
By Cheesew1z69 on 2/29/2012 3:00:49 PM , Rating: 2
quote:
my personal opinion of Apple is not relevant
Dead give away right here.


RE: Pointing out the bias
By Schrag4 on 2/29/2012 5:11:48 PM , Rating: 2
quote:
In fact, scratch that. There's clearly only room for one rational poster here, and that position is occupied. I'm out!


LOL - and that one poster is....testerguy and alexwgreen, right?


RE: Pointing out the bias
By alexwgreen on 2/29/2012 11:30:33 AM , Rating: 2
Also...

"Uses the same terminology too"

what do you mean by this? Good English?


RE: Pointing out the bias
By hexxthalion on 2/29/12, Rating: -1
RE: Pointing out the bias
By Cheesew1z69 on 2/29/2012 11:52:49 AM , Rating: 2
Don't read it? No one is forcing you.


RE: Pointing out the bias
By Thomaselite14 on 2/29/2012 7:50:07 PM , Rating: 2
Based on your realization, why reply?


RE: Pointing out the bias
By Cheesew1z69 on 2/29/2012 7:52:56 PM , Rating: 2
quote:
The anti-apple sentiment constantly being written here and the comments section is garbage. And the fact that legitimate, differing opinions are rated down to oblivion illustrates the ignorant group-think. Variety is king. When every single article about apple is negative, no matter the situation, it kills the legitimacy.
Why bother reading or replying if it's "garbage"?


RE: Pointing out the bias
By hexxthalion on 3/1/2012 5:37:09 AM , Rating: 2
because some of us have been reading dailytech for a long long time and sometimes it hurts to see how bad it got through the years


"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il














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