We must keep in mind that despite the magnitude of damages discussed in court cases, no country has yet to interfere significantly with the sales of major smartphones. For example, when Samsung won a ban on older iPhone and iPad models at the International Trade Commission, President Obama chose to veto the ban.
One prominent blogger, Tero Kuittinen, bitterly wrote
No matter what patent infringements may have taken place, judges simply cannot stomach issuing rulings that might actually have a material impact on major phone vendors. As a result, sales injunctions are typically limited to minor models (like HTC One mini) and then even those are stayed by appellate courts.
And once various appeals have been heard and processed, the models in question are 18 months or older — effectively at the end of their product runs.
The end result is that the patent system is effectively becoming welfare for people who have double degrees in engineering and law [emphasis added]. IP lawyers can charge upwards of $1,000 dollars per hour, but the work they do will never have any substantial impact on the competitive landscape in the phone industry.
I disagree with Tero Kuittinen's comment. IP lawyers DO have a substantial impact on the competitive landscape on the phone industry. It is because of them that engineers are able to patent their innovations. Having an IP lawyer prepare a poor patent your invention can be as good as having no patent as all; competitors won't even bother paying royalties but will instead easily develop similar, if not identical products that evade the stipulations in the patent. Intellectual property lawyers are compensated well because there are so few of them; very few engineers are interested in pursuing a career in law. It's the same idea behind why CEO's are also paid very well. It's a simple supply and demand problem.
ReplyDeleteThis is an interesting perspective. I do agree with Jega's comment that filing a poor patent can end up hurting your company in the long run. I think that even the damages that companies could be rewarded may still be worth it, even if that doesn't mean removing competition altogether. It will be interesting to see policy changes regarding length of such cases.
ReplyDeleteWhile it may seem like these results are futile in the scope of leveling the market for competing cell phone giants, we have to consider the economic implications of restricting sales of a product as deeply ingrained in the culture as iPhone. Whether or not Obama's veto of the ruling is in accordance with the spirit of intellectual property protection, the effects of allowing the ban could have been catastrophic for Apple, which holds a symbolic role as an indicator of US technology sector health.
ReplyDeleteIn my opinion, courts should make decisions, which maximize the benefits to the common man. These court decisions definitely do not do that.. I think it's pretty hilarious that the people benefitting the most are lawyers with experience in technical fields though.
ReplyDeleteAkshay, what do you mean by "common man"?
DeleteDara, do you agree with Tero?
ReplyDeleteDo you not consider President Obama’s veto to be a significant interference? Or do you consider it the prevention of significant interference? Do you think the veto was motivated by protectionism, or a free-trade philosophy?
What challenging questions! I agree with Tero that the "winners" in the smartphone patent wars are patent attorneys (not a particular company, excluding trolls) and that the patent wars are a financial drain (a cost on our economy as a whole).
DeleteI disagree with Tero's statement that the work of IP lawyers "will never have any substantial impact on the competitive landscape in the phone industry." Even if we haven't seen any major injunctions, the risk of one is enough to impose a financial burden on companies. In class, you mentioned NTP suing RIM/BlackBerry and RIM settling to prevent the risk of service disruption. I also suspect that companies may delay research and development and product design in order to assess the risk of litigation and work around any problems, which costs these company valuable time and competitiveness.
I have mixed views on Obama's veto. On one hand, I understand why Obama would veto an ITC injunction that wouldn't be as immediate if it were a district court and which hurts a major US company. On the other hand, Obama did not veto Apple's import ban on Samsung. The injunction on Samsung was not as bad as the one on Apple would have been, but from what I know, it does seem at least slightly politically motivated.