Mon, Apr 16, 2012 - Page 11 News List

Patent litigation becomes key Internet age strategy

TROLL FEES:The ranks of ‘patent trolls’ are expanding to include companies that use litigation to not only cash in financially, but to also gain or protect market terrain

AFP, San Francisco

The Internet age is becoming as well known for patent litigation as it is for online innovation.

From the makers of computer chips to creators of smartphones and designers of videogames, rivalries have spread from marketplaces to courtrooms with combatants warring over the right to use technology.

“For many years there was basically a stalemate in the patents arms race with an understanding that companies would not sue each other,” said Colleen Chien, a law professor at Santa Clara University in Silicon Valley.

“That was disrupted by a new business model of patent assertion,” she said. “It has become acceptable to violate the gentlemen’s agreement of not suing and now it is the new norm.”

The break in the unofficial truce was inspired in part by “patent trolls,” entities that buy or file patents with the sole intent of some day suing entrepreneurs who use the ideas.

The ranks of patent trolls are growing, as is the number of companies turning to patent litigation not just to cash-in, but to gain or protect market terrain, Chien said.

“What do you call an AOL or a dying company that turns to patent lawsuits?” she asked rhetorically. “Do they become corporate trolls?”

Struggling Internet pioneer Yahoo Corp last month filed a lawsuit against Facebook, accusing the social networking star of infringing 10 of its patents.

The suit claimed that “Facebook’s entire social network model, which allows users to create profiles and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology.”

Facebook returned fire with a countersuit accusing California-based Yahoo of being the one infringing on patents and not the other way around.

Even business software giant Oracle has weighed in. A trial is scheduled to start today in a patent case Oracle filed against Google based on software used in Android operating systems.

As patent suits proliferate, Internet firms with ample war chests are spending small fortunes to arm themselves with portfolios purchased from technology companies selling off intellectual assets.

AOL last week announced plans to sell more than 800 patents to -Microsoft in a US$1.056 billion deal that gives the faded Internet star a badly needed cash injection.

Microsoft general counsel Brad Smith said that the software giant is getting “a valuable portfolio that we have been following for years.”

Facebook last month confirmed that it bought 750 software and networking patents from IBM to beef up it arsenal on an increasingly -lawsuit-strewn technology battlefield.

Early this year, Google bought 188 patents and 29 patent applications related to mobile phones from IBM, but did not disclose how much it paid.

Last year, IBM sold Google about 2,000 patents ranging from mobile software to computer hardware and processors.

Google has been strengthening its patent portfolio as the fight for dominance in the booming smartphone and tablet computer markets increasingly involves patent lawsuits — with Apple a prime litigator.

The technology titan behind Android mobile device software last year transferred patents to smartphone giant HTC Corp (宏達電) to help the Taiwan-based company in an intellectual property clash with iPhone maker Apple.

Apple has accused HTC and other smartphone makers using Google’s Android mobile operating system of infringing on Apple-held patents.

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