At first glance, it looks like we’re in the middle of a patent lawsuit Super Bowl party. Nearly every large mobile phone player–with the exception of Microsoft and Palm — and, so far, Google, have recently been involved in some sort of patent litigation around their mobile technologies.
The graphic above shows a range of these lawsuits, which can be almost dizzying to look at and decipher. Within the last year, for example, Apple was sued by the Taiwanese company Elan Microelectronics, allegedly infringing on its touch screen patents. Nokia also went on a lawsuit spree, suing Apple, Samsung, LG and a variety of other mobile handset companies. Kodak sued a number of companies over patents related to the companies’ digital-imaging technology. And of course yesterday, Apple sued HTC, the Taiwanese handset maker.
Although patent litigation is not new in the technology world, these suits, specifically around mobile, point to the drastically changing mobile landscape. Lawyers I spoke with explained that mobile technology is still in its infancy and these large computing companies are trying to stake their claim to the future of computing.
On Tuesday when I spoke with Eric Von Hippel, a professor of technological innovation at M.I.T.’s Sloan School of Management, he pointed out that patent lawsuits have turned particular unpleasant lately as a result of companies that only buy and sell patents.
In the past, Mr. Von Hippel explained, if companies entered a litigious dispute “they would usually come to an agreement to simply share each other’s patents.” Mr. Von Hippel said that now, a new genre of patent lawsuits, brought on by what he calls “patent trolls,” changes the nature of the disputes. These companies have no interest in using the patents, but instead hope to reap large sums of money from the lawsuits.
I'm well aware that individuals use law suits as a way to reap huge profits from businesses and corporations for minor fouls, but I had no idea that companies sued each other for profit. I wonder what this does for consumers in the long run. I think that by creating a monopoly of sorts (like Apple) that has more power and resources to effectively sue other companies (like considerably smaller HTC), eventually competitors will go completely out of business and others will be hesitant to enter the market for fear that no profit can be gained. While this is great for Apple, I think consumers will loose a lot of variety and purchasing power.
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I totally agree with Bridget. These lawsuits are effectively making the big companies stronger. They are the ones who have the power and resources to support their lawsuits, which will drain the smaller companies of their money, and force them out of business. This leaves the already big companies with less competitors and an even greater monopoly. I don't think it''s right that there are companies that only buy and sell patents. Something seems strange about it--liket ehy should be focusing a business on creating output for the economy rather than reaping money from other companies' clahes with one another.
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The whole point of being in business is to make the most profit possible and the best way to do that is to create a monopoly. Cell phone companies will find any similarities in a product they can to create a lawsuit against another firm. A lawsuit will bring in more profit for their company if they win the dispute in court. I think that unless the product is an exact copy of the other product, other firms should be able to product the product. Consumers need choice and on a product and competition will bring the price down because of the higher supply. I know all of these cell phone companies want to make the most profit, but that diagram above just seems ridiculous with all the lawsuits going around. (A T)
ReplyDeleteI, also, find it surprising that companies sue each other for profit. It will be curious to see what this means for consumers. Less options? Higher prices?
ReplyDeleteAnd what Cierra said about companies existing to buy and sell patents, does seem like an oddity. Business was originally between the buyer and seller. Pretty simple transaction. Now it seems sellers have become more and more like buyers, as they are also sellers, and this creates a new market for those who provide patents, or legal aid. What was so easy to understand before, now has layers and levels to be understood.
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Yeah I would never have guessed that there were this many lawsuits being exchanged between large companies. It's never really crossed my mind that they would file so many lawsuits against each other. Although, I have thought about how similar products are to each other in the past, I guess I just never took it a step further and thought they would be suing each other. It is a good way to make some extra money, but at the same time I think they need to cut each other some slack. Like Jason said, unless it is an exact replica or pretty much identical to another companies product, theses businesses shouldn't be so strict and hard on each other. With technology being so advanced, it seems like there is only so much left to do and that each company is just trying to make the best product possible. A E
ReplyDeleteI'm in the same category with many people in this group that the number of companies suing each other is surprising. It's all just a way to get to the end result of bringing in more profit. By suing over patent laws, the companies are reinforcing their barriers to entrance of the market so they can possibly create an even stronger monopoly. It's clear that the bigger companies will eventually clear out competition and have a greater monopoly. A
ReplyDeleteI'm afraid I don't know much about patents, but the intense litigation seems a big drain to consumers. If these companies need to be competing to such an extent in the legal arena, they are almost sure to pass their expenses on to the consumer. It would be interesting to see if there has been a disproportionate increase in these lawsuits in the past few decades.
ReplyDeleteAlso, browsing Wikipedia looking for such a statistic, I stumbled upon the Patent Reform Act of 2009 (H.R. 1260). I can't say anything as to the quality of the bill, but it's interesting that it has been dead in committee since last March.
This makes it tough for the smaller companies to succeed. I mean, a company like Apple can take on just about any other mobile company in a lawsuit, because they have the money and resources to prosecute other companies, and also defend themselves unlike any other company can. Also, a motif for the smaller companies to bring these lawsuits against bigger companies is to weaken their competition, because if a company like Apple loses a lawsuit, it not only hurts them because they have to pay millions, but it is also going to hurt their image. This can also be done by a stronger mobile company, to further lessen their competition and create a more monopolized market for them. The motif of weakening competition makes sense, and a good way to do this is by bringing these patent lawsuits against your competition, which is probably a big reason why there have been so many of these lawsuits between these mobile companies recently. (A)
ReplyDeleteI would like to point out that the companies provoking the most litigation are the ones that are doing the worst in the cell phone market and in larger economic markets. Kodak, has the most lines jutting out of its bubble followed by Nokia, neither of which are particularly prevalent in the market at all. It is my belief that the law suits come about as a way to try and compensate for thier lack of techinical knowledge and capital at the same time. beyond the cameras that are in the phones, kodak barely even has a place in the phone market and im sure it wouldnt mind a larger chunk. A E
ReplyDeleteI think that law suits due to patenting are more likely to get out of hand and escalate in this political climate where there is so much competition from all sides. No one can maintain a monopoly for very long because over international lines there is less market controls. I think that the law suits are sort of silly on one hand. But somehow justifiable. Whoever first engineers something obviously invested more time and money in it, but it is unrealistic to think that it will remain their own forever.
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I think the lawsuits are necessary for innovation, as we discussed in class. It doesn't surprise me that these huge companies are suing each other over patents, but it would have to be difficult for the courts to determine who invented the technology first. I do think that the companies who invented the item first should get the money, and that whole "lets share the patents" idea is ludicrous. If I were to invent something and another company stole it from me, I would be suing them for every dime they made off of my product, because it's simply stealing. I think the lawsuits are also about market share gain and trying to see who is the premier company. For example, Apple is a huge company that can afford to wipe out smaller competitors because they have more capital. However, if an up and coming company were to win a few lawsuits, their credibility and capital would increase dramatically as well. I feel these companies know what they are doing, and it is mostly intimidation and muscle flexing for market share.
ReplyDeleteEconomies of scale, esp. the ones mentioned above are seriously competing for profits. The best way to do this is to have a monopoly on the market.
ReplyDeleteThis will lead to lower or higher prices depending on the decisions of the companies. Also, other businesses will be prevented from entering the market and also making profits and impacting other households. Some consumers will also suffer due to a lack of variety in these monopolies. A
It’s amazing how companies are willing to do everything in their hands to gain more power and money from other companies. Although many companies try to sue Apple; their history of success will take Apple to another level and even though small companies try to sue them it’s going to be hard to bring them down. Cell phone companies, share their resources and can sometimes become involve in conflict but will eventually fire something out. E.A
ReplyDeleteIs it a matter of ownership and the ability to have an economies of scale that businesses such as Apple are aiming for? The reason people go into business is to increase their profit gain. Technology has become a competitive field in which advances are being taken in quite frequently.Businesses want to be paid for their innovation and if there is a possibility to take measures to gain a profit for even the slightest bit of similarity, those measures will be taken.
ReplyDeleteBefore I saw this, I thought that companies primarily used lawsuits to put up the barriers of entry we discussed in class. Now, I guess lawsuits are just another tool to squeeze out profits from other countries. I suppose it's killing two birds with one stone then. The whole business with "patent trolls" and sharing patents comes off to me as a bureaucratic mess and a little bit arbitrary.
ReplyDeleteWhat people will do for profit...
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Wow this is very surprising. Patent laws must be very confusing, because it must answer the question who can so who under what circumstances. This seems tricky.
ReplyDeleteMonsanto actually does very much the same thing to keep their monopoly over the pesticide/seed industry. They actually have a team of lawyers ready to sue any farmers they suspect, with or without sufficient evidence, they will sue because the lawsuit will cost way too much for the farmer, they will have to settle, they will lose money, and nearby farmers will be scared of ever threatening Monsanto. Jerks.
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