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Patent Engineering, Smartphone and Wireless Technologies, The Smartphone Patent War Dr. Tal Lavian http://cs.berkeley.edu/~tlavian tlavian@cs.berkeley.edu UC Berkeley Engineering, CET
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Recognizing Intellectual Property Trademarks Logos & symbols Copyrights Right to reproduce an idea or information Includes software Patents Invention that is new and useful Trade Secrets Non-disclosed information that is valuable
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Patents—US Constitution US constitution, Article 1, section 8 granting congress the power to promote the progress of science and useful arts by securing for a limited time to authors and inventors the exclusive rights to their respective writings and discoveries
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What is a Patent? Right to Exclude the Making, Using, Selling, Offering for Sale or Importation of a Specified Invention Limited Time (Typically 20 Years from date of filing with USPTO) Limited Geographic Territory (issuing country) Monopoly awarded by the Government for sharing the Invention with the public
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How Patents Are Used Corporate Product protection Corporate value Defensive portfolio Licensing Consultant Entrepreneurial Professional credibility
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How Patents Are Used (cont.) Product protection Traditional use for patents Blocks competitors from using invention Corporate value Part of the “book value” of a company Return on R&D investment Some small companies are acquired just for their patents Defensive portfolio (war chest) Have patents to “trade” (i.e., cross-license) if a competitor accuses company of infringing their patents. Licensing License to customers or for non-competitive applications Cross-license with other companies
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Recognizing Intellectual Property Learn to view things within an IP framework: Recognize inventions in your own work Be able to detect and avoid infringement Distinguish confidential information from general knowledge Preserve confidentiality
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Trademarks What is a mark? A word, name, symbol or device used to identify the source of a product or service
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Trade Secrets Trade secrets are generally any info that is confidential and valuable, such as: Customer lists Sales or profit data Product weaknesses Internal designs, processes and procedures Formula for Coke or processing algorithms Is “supposed” to be marked or identified as confidential, but does not necessarily need to be Can be generally known and used by others – the fact that the company uses it also may also be a trade secret A trade secret is anything a company says it is. Must have some benefit (i.e. competitive advantage)
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Trade Secrets Example trade secrets: Products Formulation, algorithms, database schema Data (e.g., translation tables) Manufacturing processes Business Practices: Schedules Suppliers & partners Engineering processes: Tools and how they are used Development cycles Testing processes and results
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Smartphones – what are they? 11 Small size, light weight, easily fitting in palm and pocket Display screen with touch input and small virtual key board Also known as portable handheld device or handheld device (e.g. Smartphone, PDAs etc.)
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How they are different from traditional computation? Mainframe computer: Large, expensive, capable of supporting hundreds or even thousands of users simultaneously. Single mainframe can replace dozens or even hundreds of smaller servers Minicomputer: Power of minicomputers lie between a PC and a mainframe. Supports 4 to 200 users simultaneously. PC: PC contains a central processing unit (CPU) on a microchip (the microprocessor), a memory, a bus system and I/O ports. Processing power is less than a Minicomputer. Mobile device: Less functionality than a PC and may require specific operating system software to operate. A smartphone today has more computation power than a mainframe when you were born
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Device Architecture 13 Small device Weight Screen Size and Interface Memory Processor Battery Hardware components Camera SIM FM radio GPS Wi-Fi and Bluetooth Other features
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Smartphones - History 14 Company/ Vendor ModelReleasedOperating System (OS) IBMSimon1993- Nokia, Hewlett- Packard Nokia 96001996- PalmKyocera 60352001Palm-based OS RIMBlackBerry2002BlackBerry OS AppleiPhone2007iOS Samsung, Sony, HT, Motorola Different models2008Google’s Android SamsungOwn model2009Bada
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Smartphone Patent War We will take an in-depth look at the many different skirmishes comprising the patent war, including Who’s suing who Over what technology And for what possible reasons We will also discuss alternatives to litigation, such as licensing IP
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Smartphone Patent War Initial understanding of the Smartphone Patent war: Smartphone is a radical technology change with a lot of money at stake and growing. Patent war is a major tool to slow down the competition and get better market share Very large business…and growing Apple, Google, Motorola, LG, HTC, Microsoft, Nokia…. Extremely expansive litigation, with a lot of risk Time is critical - slowing down the competitors
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Smartphone Patent War Overview Similar to the GSM patent war of the 1990s, there is currently a patent war stirring up the mobile telecommunications market Major actors include Apple, Microsoft, Google, HTC, LG, Samsung, Motorola, Nokia, (Oracle,) and others Great example of companies leveraging their IP to obtain a competitive edge
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Smartphone Patent War – Relevant Technologies Smartphone designs e.g., Apple Samsung over the Galaxy Tab German judge ruled that the Tab infringed the iPad 2 with its “smooth, simple areas”
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Smartphone Patent War – Relevant Technologies (cont.) Operating systems e.g., Microsoft Barnes and Noble over Android in Nook ebook reader Patents involved: #5, 778, 372 – “Remote retrieval and display management of electronic document with incorporated images.” #6, 339, 780 – “Loading status in a hypermedia browser having a limited available display area.” #5, 889, 522 – “System provided child window controls.” Microsoft also involved in many licensing deals with OEMs Means of avoiding litigation for both parties (otherwise Microsoft would assert software patent rights in court)
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Smartphone Patent War – When Did It Begin? Patent litigation concerning smartphone technology began in late 2009 Nokia sued Apple over 10 patents Apple countersued Nokia for infringement of 13 patents Notice the “eye for an eye” mentality in patent litigation Nokia-Apple litigation quickly expanded from district courts to the International Trade Commission Also opened the door for other companies to sue competitors for smartphone patent infringement “Opening salvo”
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Smartphone Patent War – Who’s Involved At This Point Apple vs. HTC: 20 software patents ELAN vs. Apple: touchscreen patents Oracle vs. Google: Java patents Qualcomm vs. Nokia: 3G tech. Apple vs. Nokia: data and speech coding Nokia vs. Apple: 2G, 3G and Wi-Fi tech. This list is not exhaustive
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Smartphone Patent War – Who’s Involved At This Point (cont.) Smartphone patent war also includes actors not directly involved with the smartphone industry Kodak First attempted to assert patent rights in court in order to raise capital from licensing to smartphone manufacturers Eventually sought to sell patents to avoid bankruptcy Some think litigation was actually a means of marketing their patent portfolio Non-Practicing Entities (NPE) i.e., companies that assert patent rights but do not produce or market the patented inventions they own
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Non-Practicing Entity (NPE) An individual or company that primarily licenses patents Sometimes referred to as “patent trolls” Does not sell products based on the invention (hence “non-practicing”) Usually very aggressive, go after many companies Example: Ronald Katz (RAKTL) Telephony IVR related patents $1 billion in license fees Ref: http://www.hec.unil.ch/isa/RiskMan07/KatzLetter.pdf
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Smartphone Patent War – Different Actors, Different Motivations Motivations for resorting to patent litigation are often multi-pronged: Principle – patents rights have been infringed, not going to tolerate it e.g., Apple suing Samsung over iPad design infringement Damages – plaintiffs in patent cases can recoup profits lost due to infringement, sometimes treble (3x) damages if judge finds willful infringement http://phandroid.com/2012/12/03/judge-says-motorola-patent-claims-wont-score-injunction-against-microsoft/
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Smartphone Patent War – Different Actors, Different Motivations (cont.) Injunction – if product found to infringe, court can order injunction against manufacturer Essentially, a mandate to stop producing the infringing product e.g., Apple sued Samsung over Galaxy Tab in Germany, won an injunction that forbade Samsung marketing it Licensing – sometimes if a competitor wants to use your IP, you let them pay you for it This has largely been Microsoft’s strategy throughout the patent war Arguably mutually beneficial: one side gets access to competitor’s IP, while competitor need not manufacturer to profit from IP
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Licensing Patent owner can license patents If patent used in formulation of a standard, must be made available to everyone on equitable terms Licensing may be a corporate profit center Companies may cross-license with other companies for access to their IP
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Licensing: The Typical Sequence The patent owner becomes aware of an (alleged) infringement Patent owner sends an “invitation to take a license” letter to infringer Some dialog takes place, regarding terms and conditions of license A license is taken or litigation is started (or perhaps cross-license)
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Smartphone Patent War – Jurisdictions The smartphone patent war is a global span of litigation taking place in various courts, including: U.S. district courts Most patent cases in the United States are heard in Eastern district of Texas Delaware Northern district of California European and Asian courts Most often with the aim to win an injunction in a foreign market
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Smartphone Patent War – Jurisdictions (cont.) International Trade Commission (ITC) Quasi-legal venue where many patent cases are heard Two reasons plaintiffs often file complaints to the ITC: While not having the ability to award damages, it can grant injunctions Speed – proceedings are usually much faster than in district or appellate courts http://www.macobserver.com/tmo/article/itc-judge-apple-did-not-violate-any-samsung-patents
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Smartphone Patent War – Questions To Ask Are there more mutually profitable alternatives to “patent wars”? Cross-licensing? Patent pools? What effect does such litigations have on consumers? the market? innovation? When will it be “over”? Bankruptcy? Product bans?
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