Amanda Letourneau is a J.D. candidate at Osgoode Hall and is taking the Patent Law course.
News of Apple’s patent infringement lawsuit broke earlier this month and did not come as much of a surprise, given the relative frequency of IP lawsuits being launched in the mobile phone industry. A fellow classmate blogged about the lawsuit and the nature of computer programmes. It is no secret that Apple’s iPhone has revolutionized cellular phone devices. Since its release in 2007, the iPhone has dominated the smart phone market; which prior to the iPhone was a small niche market for tech enthusiasts.
As a result of the iPhone’s success, the already booming cell phone market was forced to adapt at a rate that was unprecedented. But how can companies adapt fast enough to even compete? Many cell phone makers are forced to make a choice between being left behind with dated technology, or “copying” the race leader’s success. Given that nearly every aspect of the iPhone is protected by patents (Apple holds nearly 200 patents relating to the device) it is no wonder that a lawsuit has arisen. One such company is HTC, and they are paying for it in a recent lawsuit claiming that they have infringed on 20 patents relating to the iPhone’s user interface, hardware and underlying architecture.
The burning question is why companies are so willing to borrow patented features from other companies and use them in their own devices. One probable answer is that the company believes that they could persuade a court that the patents they’ve infringed are invalid, likely on the basis that the claimed invention was obvious in light of existing prior art. This means that Apple is risking invalidation of their patents should the case continue to trial, and a judge find in favour of HTC. It may also be that defending infringement allegations (the vast majority of which settle out of court) would be cheaper than developing new features, especially when the patented features work well and have been received well by the public, as is the case with the iPhone.
A possible reason that Apple chose to go after HTC first is that they are the makers of the “Nexus One” Google Android phone, arguably the iPhone’s greatest potential market competitor. Given that Apple has specifically called out phones that use Android (Google’s open source operating system) there is a good chance that targeting HTC is a strategic move by Apple to get at Google by proxy. The Android operating system represents a significant threat, as Android is accessible to all handset makers, allowing them to adapt the software to suit their needs. The result of this, and likely Apple’s primary concern, is that use of the software will become ubiquitous. Further, as it is open source, the software allows for third-parties to have access to the source and modify the architecture of the operating system.
At first glance, the issue is straight forward, as Steve Jobs stated: "We can sit by and watch competitors steal our patented inventions, or we can do something about it. We've decided to do something about it. We think competition is healthy, but competitors should create their own original technology, not steal ours". Apple holds the patent rights to aspects of their invention, and now they are enforcing those rights (although opinions vary as to the validity of Apple’s claims, especially considering that some of the patents date as far back as 1995, and were not filed in contemplation of use in touch-screen phones) . However, the lawsuit is demonstrative of broader points of contention in patent law.
The theory of patent law is based on the principle of an exchange of information between society in general and an inventor who is averse to disclosing the information underpinning their invention. The resulting protection is premised on the assumption that absent a patent regime, competitors will inevitably imitate, in lieu of innovating, because imitation results in greater gain without having to invest in research and development. However, there comes a point where putting too much emphasis on the rights of the patent holder and allowing the enforcement of frivolous patents goes against the public interest by stifling creativity and competition.
If the claims made by Apple are construed too broadly, the public interest in promoting innovation, in this case through incremental improvements on existing technology, would be impeded. When the boundaries of what is under patent protection are not made clear, competitors risk infringing patents whose boundaries were not properly or plainly set out by the claims. A fair determination of claim boundaries would strike a balance between avoiding granting of over-broad monopolies, while ensuring sufficient economic return on the innovation protected by the patent in question.
Although intuitively patents do encourage innovation, especially groundbreaking innovation, it has been argued that they cause a chilling effect on further innovation. This is especially true when patents are overly broad, and the patent holder refuses reasonable access. While Apple’s iPhone was a ground breaking product, at what point should protecting patent rights give way to encouraging innovation, improvement and competition in a given industry? Eric Von Hippel, a professor of technological innovation at M.I.T.’s Sloan School of Management, stated : “It’s a bad scene right now. The social value of patents was supposed to be to encourage innovation — that’s what society gets out of it, the net effect is that they decrease innovation, and in the end, the public loses out.”
Too much ownership in a particular area results in the tragedy of the “anticommons” in which resources are underused, for fear of enforcement of ownership rights. As such, the public is deprived of further innovation in the field and market competition which would drive down costs of acquiring the patented invention. What is needed is a way to strike a balance between protecting against profiting from the innovation of others, while still allowing for the development of similar products to promote competition. As it stands, the use of patents as a strategy to protect against competition means that it is the public who loses out, as companies shy away from innovation in order to avoid having to defend costly lawsuits.
Unfortunately, it is inevitably the consumer who loses out when technology giants pursue IP rights through lawsuits. Patent law has become less about promoting the creation of new and useful products to benefit society as a whole, and more about stifling competition. When making improvements on existing software patents, or producing products that use similar concepts, companies and individuals risk costly and lengthy legal battles. If Apple wins this case, it will secure itself as the only producer of phones with features such as pinch to zoom and slide to unlock, which essentially are concepts, not inventions in the technical sense. Allowing protection of these ideas would mean that Apple could continue charging higher prices without actually providing greater innovation. Surely Apple should benefit from its state of the art device, but should it benefit by preventing the ideas the device embodies from being used by others? It leads one to wonder whether the technology industry, and society in general, would be better served if less time and energy was spent pursuing frivolous legal battles, and more emphasis was put on disseminating technological innovation to the public?