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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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RE: Trivial is the eye of the beholder
By Cheesew1z69 on 2/29/2012 10:37:35 AM , Rating: 2
About the banning, they don't want to ban per Tony, but when Samsung CHANGED the Galaxy Tab 10.1, they tried to BAN the NEW one too. But they don't want to ban them? LOL

I don't know what dream world Tony is living in but he needs a serious reality check.


RE: Trivial is the eye of the beholder
By testerguy on 2/29/12, Rating: -1
RE: Trivial is the eye of the beholder
By retrospooty on 2/29/2012 1:31:05 PM , Rating: 2
"Not complicated."

No, it isn't. Apple wants the ability to copy others tech freely and wants others to not be able to copy as they do themselves. They are using their high priced corporate lawyers to manipulate the highly flawed patent system to their advantage to try and ban competition.

Not complicated at all, its called being hypocritical.


RE: Trivial is the eye of the beholder
By tng on 2/29/2012 4:16:25 PM , Rating: 2
quote:
Not complicated at all, its called being hypocritical.
I agree with that fully.

I don't think that it would matter if Samsung had done a third revision of it's tablet, made it oval with a design that was in no way like the iPad, Apple would have again asked for a ban. They may have found some other reason but I think that it is clear that it is not about patent infringement, it is about competition.


By Cheesew1z69 on 2/29/2012 5:58:31 PM , Rating: 2
It's obvious it's about banning the competition at this point. A few people are utterly blind to this fact.


RE: Trivial is the eye of the beholder
By Tony Swash on 2/29/12, Rating: -1
RE: Trivial is the eye of the beholder
By nafhan on 2/29/2012 2:27:31 PM , Rating: 2
quote:
My point is that the product bans are not what the Apple legal strategy is aiming for
According to Apple's former CEO, one of the corporate goals was the complete destruction of competing product. That + what's actually going on kind of disagree with your statements. Apple is seeking product bans to eliminate competition. Period. Patenting every possible aspect of, well, almost everything in the name of "protecting their IP" is also being done to eliminate competition.
quote:
Let's face to iPhobes Apple's continued existence and success is in itself pretty provocative.
Bad grammar aside, it looks like you're saying that anyone who disagrees with Apple's current legal crusade is an "iPhobe", is that right? I guess when logic fails name calling begins... :) Anyway, I would consider myself more of a "current-state-of-IP-law-phobe", but I guess if the definition of iPhobe = "what Tony says" I might be one?


RE: Trivial is the eye of the beholder
By Tony Swash on 2/29/2012 3:48:21 PM , Rating: 2
quote:
According to Apple's former CEO, one of the corporate goals was the complete destruction of competing product. That + what's actually going on kind of disagree with your statements.


How does that disagree with my statement?

All you are doing is jumping from one statement

"According to Apple's former CEO, one of the corporate goals was the complete destruction of competing product"

to another

"Apple is seeking product bans to eliminate competition"

with no logical argument as to why one relates to the other.

You, I and Apple's management all know that there isn't a chance in hell of getting a legal ban on any of their competitors products of such magnitude that it would destroy them. No chance whatsoever. For Apple's management to even attempt to follow such a strategy would be ludicrously incompetent, and Apple's performance seems to indicate that that is unlikely.

All this talk and indignation about Apple banning competing products as a core business strategy or that Apple intend to destroy their competitors using some sort of underhand methods is just one big intellectual smokescreen to avoid facing up to the simple but unpalatable truth: Apple are beating their opponents and growing their business by building and selling astonishingly popular and successful products.


By Cheesew1z69 on 2/29/2012 3:58:34 PM , Rating: 1
quote:
Apple are beating their opponents and growing their business by building and selling astonishingly popular and successful products.
Yep, and that's why they are trying to ban the competition. You are one seriously delusional individual.


By nafhan on 2/29/2012 7:48:44 PM , Rating: 2
quote:
How does that disagree with my statement?
Try re-reading your statement?
quote:
"According to Apple's former CEO, one of the corporate goals was the complete destruction of competing product" to another "Apple is seeking product bans to eliminate competition"
I'll draw the dotted lines for you here:
What do you think happens to a product that cannot be sold in most major markets due to patent encumbrance? It would be "destroyed".
quote:
You, I and Apple's management all know that there isn't a chance in hell of getting a legal ban on any of their competitors products of such magnitude that it would destroy them.
How do you know this? You have some inside info you aren't sharing?
quote:
Apple are beating their opponents and growing their business by building and selling astonishingly popular and successful products.
That's what they're doing NOW. In the future, they may not have this luxury without extensive legal action, now. I don't really care one way or the other about that anyway. If Apple was only competing by providing an excellent product, I would applaud them.

The patent system needs to be fixed or we will continue to see more "innovation" through legislation, which is good for the company on top with the most money, but bad for pretty much everyone else (even you the consumer).


By Cheesew1z69 on 2/29/2012 2:50:28 PM , Rating: 1
quote:
I know it's hard to follow but do try to concentrate.
You should follow your own advice. When the competitor changes what Apple perceives was copied, and they then try to still BAN the changed product, this is more than just trying to "get them to quit copying".

It's not that hard to understand, they are looking to ban the competitor, plain and simple.


"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad














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