Apple urges EU to halt the rise of patent trolls
The European Union needs to take action against "patent trolls," Apple has urged as part of a group of tech companies and car manufacturers, with the growth of non-practicing entities stifling innovation in firms who try to exploit the entire patent system for financial gain.
The European Parliament
The coalition of 35 companies and four industry groups, which includes Apple, Microsoft, and BMW, have written to EU Commissioner for technology and industrial policy Thierry Breton about patent trolls. The group wants Breton to come up with new rules to make it harder for patent-trolling firms to "game the system" by abusing existing regulations.
Specifically, the group demands the EU courts to make their rulings less harsh, reports the Financial Times, with some judges previously issuing blanket bans on some products across multiple countries, despite only a single patent being infringed.
Typically companies file for patents to prevent other firms profiting from new ideas and concepts they create. Patent trolls usually do not produce products of their own, and instead have a business model where they acquire patents and then sue other firms that may have infringed, in order to secure a payout.
The threat of having products so easily banned in the EU over a single patent infringement is a deterrent to companies who may otherwise fight the demands of the patent firms. Instead, there is an incentive to capitulate to demands or to negotiate with a settlement before reaching that stage.
It is argued the actions of patent trolls is making it difficult to create new innovations, under the possible threat of legal issues. However, as Apple has demonstrated, sometimes it is the expense and resources required to fight lengthy legal action that could be at issue.
Among the ongoing and long cases involving Apple is its fight with Straight Path IP Group, over four patents that relate to video conferencing and point-to-point communications between devices. There have also been repeated attempts by Uniloc to attack Apple over patent infringements, with the most recent concerning the process of performing software upgrades.
Apple has also joined together with Intel to file a lawsuit against the Softbank-owned Fortress Investment Group, claiming its repeated patent litigation violates US antitrust laws. In the complaint, Apple wrote it believed it "suffered economic harm in the form of litigation costs and diversion of resources away from innovation to respond to these entities' serial nuisance suits."
In Europe specifically, Apple became the subject of a potential sales ban in Germany in late 2018, after a German court ruled it was in violation of a Qualcomm patent. At that time, it was claimed Intel modems used in iPhones infringed on patents, making all iPhones using the modems stood to be banned from sale across the entire country.
"The experience of our member companies indicates that Europe's patent system is not working properly and is undermining Europe's ability to compete globally in the next frontier of technologies," said industry group IP2Innovate executive director Patrick Oliver. "We are urging Commissioner Breton to draft a set of guidelines that address imbalances in the patent system - in particular guidelines that support the application of a proportionality requirement in patent enforcement by judges around Europe, as required by EU law."
It is claimed patent lawsuits from the so-called trolls are becoming more prevalent in Europe than ever before, with the numbers steadily rising each year. One report from Darts-IP suggests the average number of patent troll lawsuits have grown by an average of 20% per year between 2007 and 2017.
The European Parliament
The coalition of 35 companies and four industry groups, which includes Apple, Microsoft, and BMW, have written to EU Commissioner for technology and industrial policy Thierry Breton about patent trolls. The group wants Breton to come up with new rules to make it harder for patent-trolling firms to "game the system" by abusing existing regulations.
Specifically, the group demands the EU courts to make their rulings less harsh, reports the Financial Times, with some judges previously issuing blanket bans on some products across multiple countries, despite only a single patent being infringed.
Typically companies file for patents to prevent other firms profiting from new ideas and concepts they create. Patent trolls usually do not produce products of their own, and instead have a business model where they acquire patents and then sue other firms that may have infringed, in order to secure a payout.
The threat of having products so easily banned in the EU over a single patent infringement is a deterrent to companies who may otherwise fight the demands of the patent firms. Instead, there is an incentive to capitulate to demands or to negotiate with a settlement before reaching that stage.
It is argued the actions of patent trolls is making it difficult to create new innovations, under the possible threat of legal issues. However, as Apple has demonstrated, sometimes it is the expense and resources required to fight lengthy legal action that could be at issue.
Among the ongoing and long cases involving Apple is its fight with Straight Path IP Group, over four patents that relate to video conferencing and point-to-point communications between devices. There have also been repeated attempts by Uniloc to attack Apple over patent infringements, with the most recent concerning the process of performing software upgrades.
Apple has also joined together with Intel to file a lawsuit against the Softbank-owned Fortress Investment Group, claiming its repeated patent litigation violates US antitrust laws. In the complaint, Apple wrote it believed it "suffered economic harm in the form of litigation costs and diversion of resources away from innovation to respond to these entities' serial nuisance suits."
In Europe specifically, Apple became the subject of a potential sales ban in Germany in late 2018, after a German court ruled it was in violation of a Qualcomm patent. At that time, it was claimed Intel modems used in iPhones infringed on patents, making all iPhones using the modems stood to be banned from sale across the entire country.
"The experience of our member companies indicates that Europe's patent system is not working properly and is undermining Europe's ability to compete globally in the next frontier of technologies," said industry group IP2Innovate executive director Patrick Oliver. "We are urging Commissioner Breton to draft a set of guidelines that address imbalances in the patent system - in particular guidelines that support the application of a proportionality requirement in patent enforcement by judges around Europe, as required by EU law."
It is claimed patent lawsuits from the so-called trolls are becoming more prevalent in Europe than ever before, with the numbers steadily rising each year. One report from Darts-IP suggests the average number of patent troll lawsuits have grown by an average of 20% per year between 2007 and 2017.
Comments
One problem is patent holders who observe an alleged violation but don't act on that for years and years as the alleged violator generates more and more revenue, only suing then they can maximize their payout. Part of the solution should be a requirement of prompt action once they learn of (or reasonably should have learned of) a violation. Perhaps that would help a little.
But I agree with the Wizard in this case: lots of things that are allowed to be patented are silly and obvious. Looking at you, "one-click checkout" and "swipe to unlock"!
So some of these issues may be solved if the patent system took a page from the way that trademarks are handled.
The onus for trademark protection is on the trademark owner. If a trademark owner does not protect their trademark, it risks losing its protected status. Additionally trademarks need servicing, you don't pay once and own it forever, and the trademark applies to selected product and service categories only. The result of this is that trademarks are owned in proportion to the company size and product portfolio, since a small company, or company without products/services can't service a large number of trademarks due to cost. This doesn't prevent small players from owning or protecting their trademarks against large players. What it does prevent though is an otherwise small player from amassing a disproportionately large number of trademarks, which they then weaponise against companies.
Applying this to patents we get a few advantages: if there is an entity (such as an NPE/patent troll) that has allowed the market to engage their patents, only to pounce later on those which made a profit, then perhaps it should be too late to levy an action as the patent has now entered the public domain:
- This would serve the iterative nature of technology (since tech has numerous basic patents which seem ridiculous now and are held simply for defensive reasons.)
- It would encourage the possession of meaningful patents, since it would be too costly to keep a large library of difficult to levy patents.
- It would keep patent ownership in proportion to the entity's product portfolio and revenue, again due to the cost of servicing the patents.
- It means NPEs are effectively starved, because the cost notifying breaches to all infringers of their patents (not just cash-rich companies) would exhaust their capacity to operate such a business model, nor will they be able to scoop up swaths of patents for venus-fly-trap style weaponisation. Just like trademarks, small patent-holding innovators wouldn't have trouble protecting their small collection of patents provided they act in good faith.
There is no new disadvantages to small players because this system already works well for trademark holders and court lodgement costs are tiny in comparison to the cost of patent acquisition - also companies can still write out C&D letters as a means of notifying companies of believed infringement.EEEEEEEEEEEEEUUUUUUUUU!
Wrong, ideas and concepts are of course never patentable.
Big firms should fix this if they are honest and want to increase innovation.
Inventors and makers like myself are in a real disadvantage against big corporations, because its impossible to pay for legal defense or sue for (against) an obvious patent (like they almost always) are.
Even applying for a patent is to costly and cumbersome for smal (or single person) companies.
I should have a shitload of computer software patents for inventions I did when I was 18 years old, yet I have none.
Hows that for fair.
Herein lies the problem with software patents, which are wholly unlike physical inventions. Software is code and code is speech and written speech is protected via copyright. Most software shops write their own code rather than steal code and paste it. But because software patents are (bogusly) granted on ideas rather than actual implementations, you get these patent cases. Which is why many developers argue copyright is all this is needed, since it protects our code, and patents on general ideas are overreaching. (Ex: Amazon’s crazy patent on a digital shopping cart, 1-click checkout, etc)
With a physical invention you can implement it on paper without manufacturing, because you can draw physical things in functioning mechanical detail, and that warrants protection. But you can’t do that with software, you can only describe the idea or implement it in code. Ideas aren’t detailed enough to be patented, implementations are. And software implementation is code...and code is protected via copyright.
The (your) point gets blurred when the computer becomes the ‘apparatus’ (implementation) because of the software that runs on it, like for example a drawing application, or an synthesizer (application) or a game generator. A computer is in fact a universal machine you know.
Also, its a gray area between idea and implementation. Software is typically designed first, that is very far away from an implementation, but a lot more than an idea. So should this be patentable, then?
The same goes for novels with a specific ingenious setting and plot, which can actually be protected by copyright.
Also, its not that ideas outside the specific software realm should have a different treatment than within.
So I think the ‘copyright trick’ on software ideas is not really applicable.
edit: your argument about implementing with drawings (on paper because patent offices can understand that) is also flawed, its like saying Mozart didn't wrote his sonates because you cannot read music notes or software isn't specified in sufficient detail because you cannot read code. Drawing, music notes or code are all viable ways to specify an implementation. On the other hand its difficult to see all the problems a specific implementation on paper has until you actually build it. A famous example is Babbage computer design implementation on paper (fully specified in each mechanical detail) which had, while actually implementing it a few hundred years later, a flaw because one part was a mirror image (but I still regard him the inventor of the computer)
A second example, a company, Acme Inc., invents something. They own the patent. They can keep using that patent, and even license others to use it, but the patent still belongs to Acme. Other companies might want to take over Acme, but they know they won't get the patents. No more hostile takeovers. No more buying a company, firing everyone, and closing the doors, just because they want the patent portfolio. Some day Acme folds, probably after a liability lawsuit from the Coyote. Coyote gets cash, the patents though become public.
Apple and other firms wish to prevent companies from exercising rights on patents they legally own. If you create it, you can do whatever you want -- including nothing.
Patent trolling is a legal and profitable business model. Companies argue against it, in the name of furthering innovation, yet they also complain China's theft of IP has committed the greatest transfer of wealth into their nation in world history... ???
Does anyone see the irony in this?
To China, the entirety of Western Commerce is a patent troll.
What we do need is reform in the patent office, which often awards duplicate patents, like the one awarded to both Intel (using Apple) and Qualcom, concerning 3/4/5G modem IP; but also the frivolous patents awarded, such as when Microsoft attempted to patent the XOR logic truth table, and also successfully patented the use of short, long or double clicks to launch different applications on “limited resource computing devices”, such as PDAs and mobile phones.
One solution is to compose patent claims as software, where its utility (inputs vs outputs) can be measured.