News today that a second prominent Apple smartphone patent — this one on “pinch-to-zoom” (allowing the user to zoom in or out by moving two fingers apart or closer together while touching the display) has been invalidated by the U.S. Patent and Trademark Office. This is the second PTO invalidation of a big Apple patent in a few weeks — the last one to be knocked down by the PTO, back in early December, was Apple’s “bounce-back” or “rubber-banding” patent (i.e., the bounce that you get when you scroll to the end of a smartphone’s screen).
In both cases, the PTO ruled that the Apple patent is both non-novel and obvious based on the existence of prior patents that disclose a very similar feature.
Here’s the most important question: The Apple “bounce back” and “pinch-to-zoom” patents were among the patents that the jury in federal court in San Jose ruled Samsung had infringed. But considering that the PTO has deemed that these patents are worthless, what should the San Jose court do now? Apple will likely appeal the PTO’s determination in both cases, so in a sense the validity of the bounce back and pinch-to-zoom patents is still up for grabs. But should a damage award based in part on patents that are of no current effect stand? Or should the court vacate the damage award and order a new trial on the question of damages? Or should the court at least suspend the damage award pending resolution of the patent validity questions?
One thing the San Jose court should not do is make final an award that may be based in part on bad patents.
Samsung announced today that it will no longer be seeking injunctions against Apple’s iphones in European courts based on claims that those phones infringed Samsung’s “standards essential patents” covering certain 3G cellular networking technologies. Samsung says that it’s doing so for the good of consumers. Um, maybe. A more likely explanation is that it fears possible action by EU antitrust officials, who are increasingly wary of injunctions in patent cases involving patents that are “essential” to industry standards.
This is an important development in the Apple/Samsung fracas, because it deprives Samsung of a bit of leverage that it thought it had. Stay tuned.
News today that Apple and the major Taiwanese smartphone company HTC have reached a settlement in their long-running patent battle. Apple had won several important rounds, including a patent judgment in the U.S. International Trade Commission that enjoined HTC from importing into the U.S. several of its popular phones.
Now HTC can get back to business. But notice that the terms of its licensing deal with Apple are secret. So watch closely. Will HTC re-emerge as a vigorous competitor in the smartphone market, as it was before the ITC ruling? Or has Apple succeeded in imposing on HTC such a significant “patent tax” that its competitive vigor will be reduced?
Time will tell.
. . . this time in the United States International Trade Commission. An administrative law judge at the ITC has ruled that Samsung has infringed four Apple patents, including one of Apple’s “rectangle” iPhone design patents, and utility patents including pinch-to-zoom. The ruling, if upheld by the full ITC, could result in a ban on the importation into the U.S. of a number of Samsung’s products. We’ll see what happens next . . .
News that a Dutch court has ruled that Samsung has not infringed Apple’s patent on smartphone “pinch-to-zoom” — i.e., the function of zooming on a smartphone screen using a two-finger gesture. Apple’s billion-dollar patent victory in U.S. federal court in California is surely the big event thus far, but outside the U.S. Apple has been on a bit of a smartphone patent losing streak, with judgments coming down against it in courts in the U.K., Japan, Germany, and now the Netherlands. This is going to be a long war, but so far the result is unclear — both sides have won some important battles.
Nobel-winning Harvard economist Eric Maskin has a letter in today’s NY Times where he argues that patents for software should be scrapped. His point echos something we say in The Knockoff Economy — i.e., in creative industries where a lot of innovation involves incremental improvements to and extensions of others’ work (what we refer to as “tweaking”), patents (and copyrights) are often not necessary and indeed may impede creativity by discouraging tweaking. Here’s Maskin’s take:
“[I]n the software industry, progress is highly sequential: progress is typically made through a large number of small steps, each building on the previous ones. If one of those steps is patentable, then the patent holder can effectively block (or at least slow down) subsequent progress by setting high license fees.
Moreover, like any other monopolist, it has the incentive to set such fees.
Thus, in an industry with highly sequential innovation, it may be better for society to scrap patents altogether than try to tighten them.”
Federal Trade Commission headquarters, DC
News in today’s NY Times that the Federal Trade Commission has opened an antitrust investigation into Google’s use of “standards essential patents” — i.e., patents that are necessary to the basic operation of smartphones and tablet computers. Google has represented to standards setting organizations (private industry groups that define and adopt rules meant to allow devices from different manufacturers to work together on a common standard) that if standards were adopted that would require smartphone and tablet makers to use its patents, that it would license them on “fair, reasonable, and non-discriminatory” terms. Many standard setting organizations require this sort of “FRAND” licensing commitment as a condition of participation in the standard setting process. In any event, the article suggests that the FTC is investigating to see whether Google is living up to these commitments, or whether they are using their standards essential patents to disadvantage rivals.
This is an important issue. Abuse of standards essential patents can harm competition. And the FTC is well aware of that fact. In Senate testimony in July, Edith Ramirez, an F.T.C. commissioner, speaking of the potential abuse of standard-essential patents, said, “Holdup and the threat of holdup can deter innovation by increasing costs and uncertainty for other industry participants, including other patent holders.”
From today’s NY Times Bits Blog, a short follow-up on Monday’s long article on the dysfunctions of the patent system. Today’s entry briefly tells the story of Apple’s early-1980′s patent entanglement with IBM, the then-dominant computer maker. IBM had a stack of PC-related patents, and it was using them partly to collect licensing fees, but mostly to fence out competitors. Big Blue brandished their patents against Apple and demanded licensing fees. But in the negotiations that followed, it emerged that IBM was concerned in particular that Apple not be competing against it in the mainframe computer business. As a condition of the patent license, IBM demanded that Apple never manufacture a computer larger than a government worker’s desk.
I’m surprised that the Apple people didn’t burst out laughing. In any event, the IBM threats apparently left an impression — Apple learned that if you aren’t a patent aggressor, you might be a patent victim. And that reminds me of this famous and wonderful bit by Auden:
“I and the public know
What all schoolchildren learn,
Those to whom evil is done
Do evil in return.”
Kal is interviewed for the “All Tech Considered” segment — in which he and reporter Laura Sydell compare the patent-heavy market in smartphones with the relatively patent- and copyright-free world of fashion. The winner? Fashion.