In the patent wars, Samsung has just declared victory, with one battle at least — Apple will no longer be able to sell the iPhone 4 and iPad 2 in the U.S.
A disappointed Apple will very likely appeal the decision made by The International Trade Commission (ITC) and this process will take close to forever, months at the earliest. The trade agency order can also be invalidated by President Barack Obama, but if so, must be done within 60 days of the decision.
Apparently, according to the ITC, both the iPhone 4 and iPad 2 infringe on a U.S. patent regarding 3G mobile data links, which is somewhat ironic, considering that Apple sought a similar ban on Samsung tablets and smartphones after a jury reached a verdict in the company’s favor last summer. A judge denied the permanent injunction, and the damages awarded — $1 billion — were eventually slashed in half.
“Samsung is using a strategy which has been rejected by courts and regulators around the world,” an Apple spokesperson told AllThingsD. The strategy in this case is an import ban because the devices are assembled in China — that’s how the U.S. trade agency comes into play.
“This is more of a core communications patent than some sort of look-and-feel or square versus rounded corners issue—hence the ‘FRAND’ [fair, reasonable and non-discriminatory] question—so Apple is being a touch cavalier attempting to pass this off as not serious,” said Wally Swain, Senior VP of Research, Yankee Group.
Patents, Patents Everywhere
Mobile technology – smartphones and tablets —is relatively immature. The rush to conquer such technology is evident in the amount of applications to the U.S. Patent Office.
Chetan Sharma, author of a research paper Mobile Patents Landscape: An In-depth Quantitative Analysis – 2013, said mobile-related patent grants have increased 591% in the last decade, and in 2013, almost one quarter of all patents granted in the U.S. will be mobile related. Compare this to the paltry 2% in 1991, and only 5% a decade later in 2001, just years away from the mobile explosion.
Sharma’s research, a comprehensive study based on more than seven million patents granted in the U.S. and Europe, shows that the U.S. accounts for about 72% of the mobile patents. That’s quite a chunk. Also according to the report, “Companies like Amazon, HTC, Google, ZTE, Lenovo, Adobe and Apple have approximately 90% of their mobile patents granted in the last 5 years. For platform players like Amazon and Google, most of their mobile patent activity is fairly recent.”
In 2012, Samsung had the most mobile patents granted in the U.S., followed by IBM, Sony, Microsoft, RIM, LG, Qualcomm, Ericsson, Panasonic, Alcatel-Lucent, and Nokia. AT&T had the most mobile operator patents granted in 2012, while Samsung lead in mobile infrastructure patents and mobile OEM patents.
The top filer of patents was actually IBM, although only 16% of its filings were related to mobile. What makes up the bulk? “I haven’t examined other IBM patents. They are likely to be in software, databases, microelectronics, network and storage systems etc.,” Sharma replied in an email to Mobile Enterprise.
Who is Suing Who?
Basically, everyone is suing everyone else. Microsoft went after Motorola in 2010 for a lawsuit still ongoing, claiming Android infringed on intellectual property rights. Then Nokia and HTC duked it out over 42 patents….yet teamed up when NPE (IPCom) came after them both. Nokia won a patent claim in Germany against HTC….shortly before a judge threw out the injunction. HTC and Apple came to a patent licensing agreement by the end of 2012, while Huawei and ZTE had their own party going on in court in France. Even Intertrust Technologies Corp, (the software firm is part of a group that includes Sony Corp. and Royal Philips Electronics,) sued Apple for infringing on security patents.
And of course, it’s Samsung vs. Apple, and Apple vs. Samsung.
So, are tech companies suing everyone over everything in order to gain competitive advantage? On the face of it, it looks like the major players strategically have dozens of lawsuits going, all claiming property rights infringement. Then, there are companies the CES refers to as “patent trolls” — those that purposely purchase patent rights just to sue other companies.
Sharma explained, however, that the quantity of patents does not come into play in terms of lawsuits, although it would play a significant role during negotiations and licensing agreements. “Generally, the legal disputes in courts are on specific claims in specific patents,” he said. “There could be multiple patents from the same family in the litigation but it is not a requirement. Only one claim from one patent can lead to a dispute (in practice though, there are at least 6-12 claims for 2-5 patents).”
And, How Does it Affect the Enterprise?
The patent wars may or may not make for entertaining reading, and could spur innovation as tech companies strive to create the next big thing, but what is the bottom line for business? IT departments, always trying to just keep up with the next device, might be wary of deploying one (no matter how much users demand it) that is currently subject to litigation and may not even be available somewhere down the road.
Apple, for example, is dominant when it comes to tablets in the enterprise. According to ABI Research, the iPad accounts for 50% of all tablet shipments in Q1, 2013. Android, however, is pulling up fast. “It’s inevitable that Android tablets will overtake iOS-powered slates, though we see no single vendor challenging Apple’s dominance anytime soon,” said Jeff Orr, Senior Practice Director, ABI Research.
The reasons for Android’s surge actually have nothing to do with patent problems, but if the recent Samsung verdict stands, it certainly doesn’t help Apple’s position.
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