In Technology Wars, Using The Patent As A Sword

[jpeyton]

Just a warning, this NYTimes piece is a long read and comes off indicting Apple as a company gaming the patent system for profit.

http://www.nytimes.com/2012/10/08/t...n-stifle-competition.html?pagewanted=all&_r=0

My favorite selections:

...Last year, for the first time, spending by Apple and Google on patent lawsuits and unusually big-dollar patent purchases exceeded spending on research and development of new products, according to public filings...

...Former Apple employees say senior executives made a deliberate decision over the last decade...to use patents as leverage against competitors to the iPhone...

Mr. Jobs gathered his senior managers...when it came to the new iPhone, “we’re going to patent it all,” he declared...“His attitude was that if someone at Apple can dream it up, then we should apply for a patent, because even if we never build it, it’s a defensive tool,” said Nancy R. Heinen, Apple’s general counsel until 2006...

...Patents for software and some kinds of electronics, particularly smartphones, are now so problematic that they contribute to a so-called patent tax that adds as much as 20 percent to companies’ research and development costs, according to a study conducted last year by two Boston University professors...

...Apple has been hard to pin down, said one person from Google who was not authorized to speak publicly. “Sometimes they’re asking for money. Then they say we have to promise to not copy aspects of the iPhone. And whenever we get close to an agreement, it all changes again. Our feeling is they don’t really want this to end. As long as everyone is distracted by these trials, the iPhone continues to sell"...

...The application by Apple that eventually became patent 8,086,604 first crossed desks at the Patent and Trademark Office on a winter day in 2004. In the next two years, a small cast of officials spent about 23 hours — the time generally allotted for reviewing a new application — examining the three dozen pages before recommending rejection. The application, for a voice- and text-based search engine, was “an obvious variation” on existing ideas, a patent examiner named Raheem Hoffler wrote. Over the next five years, Apple modified and resubmitted the application eight times — and each time it was rejected by the patent office. On its 10th attempt, Apple got patent 8,086,604 approved...

...Patent 8,086,604’s path to approval “shows there’s a lot wrong with the process,” said Arti K. Rai, an intellectual property expert at Duke University School of Law who reviewed the patent application for The Times. That patent, like numerous others, is an example of how companies can file an application again and again until they win approval, Ms. Rai said...

...Some experts worry that Apple’s broad patents may give the company control of technologies that, over the last seven years, have been independently developed at dozens of companies and have become central to many devices...

 

[Spoooon]

Yeah, I caught that, marked for later.

 

[shortylickens]

WRONG!
Lawyers are the sword.

Patents are the bullshit declaration of war you use to get people riled up and fighting.

 

[preslove]

Once companies start spending more on patents than they do on R&D, then you know the entire patent system has failed. The patent system was created to inspire R&D, but now it is strangling it.

 

[Brian Stirling]

It's a very well done and researched article and surprising from the NYT given the love affair they seem to have for all things Apple.

But, there will be plenty of folks here and elsewhere that think all these patents and lawsuits are good for innovation. It's also clear the many involved know that this is not good but play the game because they can...


Brian

 

[mosco]

It's a very well done and researched article and surprising from the NYT given the love affair they seem to have for all things Apple.

The article is from a series called "iEconomy" which is pretty much focused on Apple, so its no surprise most of the info is about them.

I actually don't think this is article was was that damming against Apple, as much as jpeyton wants everyone to hate Apple.

Everyone agrees the system isn't healthy, but as the article points out, this issue isn't specific to Apple. They talk about lingo/nuance. They talk about Creative suing Apple for a broad music device patent. I am guessing that ruling played a pretty big role in Apple's current strategy. Apple has been sued 135 times since 2006 over patents.

 

[cl-scott]

Having dealt with Apple for about 2 years on the business side of things, and having heard second and third hand from numerous disparate sources that my experiences are far from unique, the part about Apple constantly changing its mind is absolutely not surprising to me at all.

Their managers kept coming to me, expecting me to be able to make changes at a national retail chain when I was just a repair tech. Granted I worked just down the street from the corporate office, but really? And then one week they would be absolutely insistent that we follow this or that rule, and then the next week they couldn't seem to care less about that, they had moved on to some other rule or performance metric which is now all consuming in importance. You'd swear at the beginning of every week they have some wheel of obsession that they spin, and wherever it lands, that's what they're going to be singularly focused on.

So I would completely believe the idea that one day Apple says, "We'll settle for this" and then by the time the approval process makes its way up and down the corporate food chain at Google, Apple's decided now they want something else. Not sure if it's a part of some strategy to keep everyone off balance, or if the management at that company is just that inept.

And on a broader scope... At what point do we admit that the patent system is horribly broken and is not only failing to promote innovation, it's actively getting in the way and preventing it? Do we really want to wait until companies spend more on filing/fighting lawsuits based on existing products than they do developing new products?

 

[MagickMan]

So I would completely believe the idea that one day Apple says, "We'll settle for this" and then by the time the approval process makes its way up and down the corporate food chain at Google, Apple's decided now they want something else. Not sure if it's a part of some strategy to keep everyone off balance, or if the management at that company is just that inept.

Yes, they do it to keep everyone off balance. It was part of Jobs' philosophy of keeping people hopping and not letting them get comfortable. It's in his bio, he talks about it extensively.

 

[BladeVenom]

Once companies start spending more on patents than they do on R&D, then you know the entire patent system has failed. The patent system was created to inspire R&D, but now it is strangling it.

Outside of chemical patents, our current system does more economic harm than good.

 

[jhansman]

More like a club than a sword. My guess is we've seen about all the "innovation" we're going to from that bunch. From here on out, they're going to have to either stick with their cult or truly compete. My money is on the former.

 

[cl-scott]

Yes, they do it to keep everyone off balance. It was part of Jobs' philosophy of keeping people hopping and not letting them get comfortable. It's in his bio, he talks about it extensively.

Well, that explains it then, and it's bloody annoying. I might even go as far as saying it's disingenuous. However, it does fit in nicely with the fact that Apple seems to think it plays by a different set of rules. You sign a contract with Apple, and Apple's free to completely wipe their arse with the contract any time they please, but you don't follow it to the absolute letter, and they will land on you like no other.

I can just see the likes of Foxconn and every other supplier up and down the supply chain, just biding their time. Once it no longer is a situation where the money is too good not to do business with Apple, there's no way they will continue putting up with this.

 

[MagickMan]

Well, that explains it then, and it's bloody annoying. I might even go as far as saying it's disingenuous. However, it does fit in nicely with the fact that Apple seems to think it plays by a different set of rules. You sign a contract with Apple, and Apple's free to completely wipe their arse with the contract any time they please, but you don't follow it to the absolute letter, and they will land on you like no other.

I can just see the likes of Foxconn and every other supplier up and down the supply chain, just biding their time. Once it no longer is a situation where the money is too good not to do business with Apple, there's no way they will continue putting up with this.

Considering how much cash Apple has, that day won't be here for a very long time.

 

[PowerYoga]

Apple is the biggest patent troll out there. Only difference between them and other patent trolls is they actually have money to hire lawyers.

 

[Mopetar]

You sign a contract with Apple, and Apple's free to completely wipe their arse with the contract any time they please, but you don't follow it to the absolute letter, and they will land on you like no other.

What part of negotiations constitute a valid, signed contract? And I doubt that they can or do disregard contracts very often unless they've found a loophole, which probably doesn't happen very often.

I can just see the likes of Foxconn and every other supplier up and down the supply chain, just biding their time. Once it no longer is a situation where the money is too good not to do business with Apple, there's no way they will continue putting up with this.

I'm sure that day will be here any time now.

Apple is the biggest patent troll out there. Only difference between them and other patent trolls is they actually have money to hire lawyers.

I didn't realize that they were an NPE now. Someone should do something about all those products they still have on store shelves.

 

[cl-scott]

Considering how much cash Apple has, that day won't be here for a very long time.

I would have agreed with you right up until Tim Cook was quoted as saying Apple has too much money and reinstated dividend payments.

And once again Mopetar... I'm not going to respond to anything you ever say if you insist on splitting up the message. After about 2-3 posts all context is lost, and you just have two idiots who don't know when to quit quibbling over what the meaning of is is. Now if you want to be one of those idiots, be my guest, but I'll not be your second. You want to respond to the post as a whole, so that people can see the context, then if you say something worth a response...

 

[Mopetar]

I would have agreed with you right up until Tim Cook was quoted as saying Apple has too much money and reinstated dividend payments.

What does that have to do with anything? They still have boatloads of cash. Them paying out a dividend doesn't change that, and he was right, they do have too much cash. Sitting on it doesn't really do them any good unless they there's something that costs more than they currently have on hand, which would be a pretty damned big acquisition.

And once again Mopetar... I'm not going to respond to anything you ever say if you insist on splitting up the message.

I suppose that probably saves me the trouble of pointing out how misguided half of what you say is.

After about 2-3 posts all context is lost, and you just have two idiots who don't know when to quit quibbling over what the meaning of is is.

If you say so.

You want to respond to the post as a whole, so that people can see the context, then if you say something worth a response...

When you make multiple different claims in each post, it's easier to address each of them one by one. There's no context to be lost when the two points have nothing to do with one and other. Take your previous post.

What does your claim that Apple violates contracts (which you haven't shown any evidence of by the way) have to do with your second point about Foxconn wanting to drop Apple as a partner have, other than serving as a false premise.

 

[mosco]

Once companies start spending more on patents than they do on R&D, then you know the entire patent system has failed. The patent system was created to inspire R&D, but now it is strangling it.

Just to give more context to that part of the article, I suggest you read:

http://www.technovia.co.uk/2012/10/...nts-than-rd-yes-but-its-not-all-it-seems.html

Basically there were some large single purchases (2.5billion for Apple, 5.5million for Google) that put things out of the whack last year.

Also, Apple's RD went spending when up 33%, and Googles went up too.

 

[PowerYoga]

I didn't realize that they were an NPE now. Someone should do something about all those products they still have on store shelves.

Being a patent troll doesn't preclude you from selling products. A company with a bunch of bogus patents suing everyone is still a troll.

 

[MagickMan]

I would have agreed with you right up until Tim Cook was quoted as saying Apple has too much money and reinstated dividend payments.

That doesn't change the fact they're sitting on >$120B. The dividend payout and stock buy-backs don't even scratch the surface. Unless they start buying TV networks, telcoms, and funding their own space missions, nothing short of the collapse of Western civilization is going to stop their roll at this point.

 

[cl-scott]

Being a patent troll doesn't preclude you from selling products. A company with a bunch of bogus patents suing everyone is still a troll.

Have you ever seen the web series Red vs. Blue? There's a bit in the 6th season where two of the characters are trying to explain to their former CO that the guy he hated was made the CO of a new squad. No matter how many different ways they try to explain it, the guy cannot accept what they're saying.

There are a couple people like that here when it comes to Apple. You try and say absolutely anything even remotely negative about the company, and somehow or another they'll figure out a way to claim you're an idiot and don't know what you're talking about. There could be a legitimate photo of Steve Jobs in a Hitler mustache and Nazi uniform throwing puppies into a wood chipper with throngs of Apple employees all cheering him on, literally bathing in the blood of the puppies, and they'll still find a way to claim you're the @sshole.

That doesn't change the fact they're sitting on >$120B. The dividend payout and stock buy-backs don't even scratch the surface. Unless they start buying TV networks, telcoms, and funding their own space missions, nothing short of the collapse of Western civilization is going to stop their roll at this point.

There was a time when Microsoft was making money at an insane rate, and had near total dominance of the entire market. Look at them now. Still a major player, but also a pale shadow of the Microsoft of the 1990s.

I'm not saying Apple's going to close their doors tomorrow, I'm betting it'll be more like 2020. All the things you see going on at the Foxconn factories is seriously just the tip of the iceberg. Apple is like the abusive spouse to its "partner" companies. When other people are looking, it's all smiles and kind words. When the public's attention is elsewhere, they're kicking, punching, and slamming heads into walls up and down their supply chain. I've witnessed it first hand, even been singled out for some special attention when I tried to point out some questionable actions of the NA Field Service manager Jason Hsi.

There is going to come a point where companies will decide that it's just not worth doing business with Apple, no matter how much money they might make, because eventually Apple will just kick them in the teeth and eat their lunch like they did with the AASP network and all third party retailers. And if you sue Apple, because Apple decided it didn't want to live up to its end of a contract, then you can forget about ever getting another contract with Apple. Just ask Samsung about that, and how even after winning the opening round in the US, Apple has been slashing the orders of Samsung components.

 

[lopri]

Intellectual property laws are a mess as everyone knows, and it needs a serious fix from the ground-up. In my view it is one of the two most important legal challenges that will affect our future. (The other one being informational privacy)

Both of them have profound impacts on our every day life and freedom of speech, and the importance will only grow. It is kind of (too) late but I am glad that people are paying attention to what has been actually going on. Better late than never, I guess.

On a related news:

Trolls filed 40% of patent infringement lawsuits in 2011

 

[cl-scott]

And for anyone interested in listening to one of the article authors talking about the article and it's subject, there's this Fresh Air interview from today:

http://www.npr.org/2012/10/11/162717373/in-digital-war-patents-are-the-weapon-of-choice

 

[MagickMan]

There was a time when Microsoft was making money at an insane rate, and had near total dominance of the entire market. Look at them now. Still a major player, but also a pale shadow of the Microsoft of the 1990s.

That's why I made the comment about TV networks (NBC), MS sunk a lot of cash into MSNBC. Also they put billions into AT&T's media ventures. Then there was Skype for $8.5B. They have themselves to blame for their cash position.

http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Microsoft

 

[jpeyton]

NM

 

[pandemonium]

Totally legit read.

I especially loved these parts:

Mr. Phillips and Vlingo are among the thousands of executives and companies caught in a software patent system that federal judges, economists, policy makers and technology executives say is so flawed that it often stymies innovation.

“There’s a real chaos,” said Richard A. Posner, a federal appellate judge who has helped shape patent law, in an interview. “The standards for granting patents are too loose.”

Almost every major technology company is involved in ongoing patent battles, but the most significant player is Apple, industry executives say, because of its influence and the size of its claims: in August in California, the company won a $1 billion patent infringement judgment against Samsung. Former Apple employees say senior executives made a deliberate decision over the last decade, after Apple was a victim of patent attacks, to use patents as leverage against competitors to the iPhone, the company’s biggest source of profits.

Apple has filed multiple suits against three companies — HTC, Samsung and Motorola Mobility, now part of Google — that today are responsible for more than half of all smartphone sales in the United States. If Apple’s claims — which include ownership of minor elements like rounded square icons and of more fundamental smartphone technologies — prevail, it will most likely force competitors to overhaul how they design phones, industry experts say.

Oh good, I see Mopey has already entered the ring. I guess I better keep my personal feelings out of this one and keep it to the facts - no hypothetical scenarios!