Next wave of patent rulings could ease tech wars

August 22, 2011

By Reynolds Holding
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Today’s costly technology patent wars in many ways can be pinned on the courts. Google, Apple, Microsoft and others are spending billions of dollars for the rights to ideas and inventions powering devices like smartphones. But what they’re actually buying is legal protection. The next wave of rulings ought to sync up the law with the real world.

The U.S. Court of Appeals for the Federal Circuit is the exclusive forum for patent appeals, created in 1982 to keep the law consistent. But with consistency has come decisions upholding patents so broadly it’s hard to tell exactly what they cover.

In the 1990s, for example, software patent approvals began. Unlike with other inventions, however, they required only general descriptions — not code or other information showing exactly how concepts worked. The court used similarly loose standards to approve patents for business methods and certain technology.

Judges may have been trying to promote innovation. But the practical result has been overlapping claims to some of tech’s most valuable ideas. It means firms like Google cannot identify all the patents that may cover, say, the Android mobile operating system. The company’s chief legal officer says as many as 250,000 might apply to a smartphone.

That has led companies to introduce their products first and face consequences later. In the case of Android, Microsoft has asked Samsung to pay as much as $15 for each device using the software because of alleged infringement. The software giant also is suing in federal court to ban Motorola’s Android phones.

The latest tack, though, is to deter lawsuits and royalty demands by acquiring patent portfolios. By doing so, companies can counter infringement threats with claims of their own. It’s also a way to establish detente.

A more reasonable approach would be stricter approval standards. The U.S. Supreme Court seemed to agree last year when it affirmed the rejection of a proposed business-method patent. The decision comes too late for companies that have shelled out for infringement fights. But it bodes well for those that would rather use patents to promote innovation than squelch it.

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