The future of patent litigation
Skip to content
Jun 8, 2012

The future of patent litigation

By Tim De Chant
Patented

Nothing came of the much-hyped Apple-Samsung negotiations. Not that anyone really thought much would come of them. Samsung had the most to gain by settling, and Apple is famously protective of its intellectual property. A settlement would have been a surprise. Still, the anticlimactic conclusion of these talks belies their importance. They were more than just a step along the way in another patent suit. They were negotiations in an extremely large patent suit. A harbinger of the future, perhaps.

“I think that in telecom they’re going to be the norm,” James Conley, a clinical professor of technology and expert in intellectual property, said of such large patent suits. “In telecom, IP is important.”

Wide-ranging patent litigation isn’t likely to be limited to telecom, either. To identify where such patent suits will bubble up, Conley said to look up the value chain. Telecom is a perfect storm in this case because wireless providers are the primary gateway to consumers. While Apple has partially cut providers out of the equation by selling iPhones directly to consumers, they haven’t been able to excise them completely. Most phone manufacturers have to go through this gateway, which lessens the opportunity for direct customer engagement. The intellectual property behind each device then becomes vitally important. It is, in a sense, the only thing that differentiates one phone from another in the consumer’s eyes.

Some other industries have the same idiosyncrasies, while others don’t. “I’m not sure we’ll see large patent suits in each and every industry. It depends on the context,” Conley said. Banking is one industry where he expects more litigation, but he doesn’t see the same happening for pharma. “The big firms don’t have enough blockbusters to block the generics.”

It may seem that large patent suits like Apple-Samsung are to blame for the recent explosion in patent litigation. But that would overlook the rise of non-practicing entities, or NPEs, which have played a major role. NPEs are firms that hold intellectual property like patents, but don’t sell or manufacture any products. In the tech and telecom worlds, they’re often derided as “patent trolls.”

A famous recent example is NTP’s suit against BlackBerry maker RIM. NTP is simply a holding company with about 50 patents in its portfolio—it doesn’t produce any goods or services. In a 2006 suit, NTP alleged RIM was infringing on patents it held for wireless email. Eventually, RIM settled for over $600 million. The holding firm then went on to sue Apple, Google, Microsoft, and others.

“These NPEs have run up the litigation, but the laws are slowly changing,” Conley remarked. “Probably not fast enough.”

This is part 4 of our coverage of the Apple-Samsung negotiations. Read parts one, two, and three.

Photo by SoulRider.222.

Trending

Editor’s Picks

A mentor puts capes on proteges.
Careers

Podcast: How to Be a Great Mentor

Plus, some valuable career advice that applies to just about everyone.

Kids decide whether to buy water or soda.
Marketing

A New Way to Persuade Kids to Drink More Water and Less Soda

Getting children to make healthy choices is tricky—and the wrong message can backfire.

Computational Social Scientists discuss solutions.
Innovation

How Can Social Science Become More Solutions-Oriented?

A conversation between researchers at Kellogg and Microsoft explores how behavioral science can best be applied.

An entrepreneur enters an established company.
Innovation

Buying a Company for Its Talent? Beware of Hidden Legal Risks.

Acquiring another firm’s trade secrets—even unintentionally—could prove costly.

Careers

Take 5: Tips for Widening—and Improving—Your Candidate Pool

Common biases can cause companies to overlook a wealth of top talent.

Drug innovation at a pharmaceutical company
Innovation

Everyone Wants Pharmaceutical Breakthroughs. What Drives Drug Companies to Pursue Them?

A new study suggests that firms are at their most innovative after a financial windfall.

Careers

4 Key Steps to Preparing for a Business Presentation

Don’t let a lack of prep work sabotage your great ideas.

Healthcare workers meet in a hospital corridor.
Healthcare

Video: How Open Lines of Communication Can Improve Healthcare Outcomes

Training physicians to be better communicators builds trust with patients and their loved ones.

A man tries to improve OR scheduling.
Operations

Here’s a Better Way to Schedule Surgeries

A new tool could drive savings of 20 percent while still keeping surgeons happy.

Voters who do not trust each other.
Politics & Elections

Why Economic Crises Trigger Political Turnover in Some Countries but Not Others

The fallout can hinge on how much a country’s people trust each other.

A clerk scans brand trademarks.
Marketing

Building Strong Brands: The Inside Scoop on Branding in the Real World

Tim Calkins’s blog draws lessons from brand missteps and triumphs.

two coffee growers harvest beans
Economics

How the Coffee Industry Is Building a Sustainable Supply Chain in an Unstable Region

Three experts discuss the challenges and rewards of sourcing coffee from the Democratic Republic of Congo.