Innovation fears over smartphone 'patent wars'

Innovation fears over smartphone 'patent wars'

Innovation fears over smartphone 'patent wars'

Updated 1 November 2012, 18:23 AEDT

A series of high-profile patent disputes among the world's biggest smartphone makers is raising concerns over the future of innovation.

In the latest salvo, a California jury awarded more than $1 billion against South Korea's Samsung for illegally copying features from Apple's iPhone and iPad.

For an industry where the launch of a smartphone or tablet has become an eagerly awaited event, and software changes and designs spark vehement debate, that decision has proved controversial.

Matthew Swinn, IP Partner from Corrs Chambers Westgarth Lawyers says in a fiercely competitive market, innovation - and protecting that innovation - has been the key to success.

"Apple has made its mission to create products which are good to look at and easy to use," he said.

"That's its marketing advantage, that's the reason it can charge more for its devices than other competitors, so I think it's entirely to be expected that Apple will use every tool at its disposal to defend that turf."

One of the biggest of those tools is a combative approach to patent claims - an approach revealed by a New York Times investigation as a deliberate strategy.

In 2006, just before the release of the first iPhone, Apple agreed to pay $100 million to a Singaporean firm, Creative Technology, to settle a claim against the iPod.

Apple's then-CEO, the late Steve Jobs, was said to be bruised by the experience.


Technology analyst Ross Dawson says Jobs told his lawyers that from then on, they should patent everything Apple could come up with.

"Steve said 'we want to patent it all'," he said.

"And this is paying off, because the breadth of patents they have is enabling them now to dominate, to potentially pick up $1 billion from its arch rival Samsung, and to dominate the landscape."

That $1 billion pay day came courtesy of a Californian jury, which found that Samsung had infringed six of the seven patents in dispute.

Matthew Swinn says the patents related to both functionality and design.

"On the one hand, there were patents for the way things work - overscroll bounce, tap to zoom, and pinch to zoom," he said.

"And there were three design patents, one for the look of the iPhone, one for the look of the iPad, and one for the appearance of the icons on the iPhone homescreen."

Samsung is the world's biggest smartphone maker, while Apple is the most valuable company in the world, and together they control more than half the global market.

"It is a big award of damages," Mr Swinn said.

"In the context of the smartphone sales though, and in particular in the context of Samsung's larger business, it's still a drop in the bucket."

Samsung has been just as aggressive in its response - counter-suing Apple for allegedly infringing its own patents and alleging juror misconduct.

All up, the world's two biggest smartphone makers are battling it out in 10 courtrooms around the world.

The final ruling in the US case is still to come, but Samsung says if the verdict stands, consumers can expect fewer choices, less innovation and potentially higher prices.

With 200,000 patents covering the smartphone market alone, there are growing concerns the 'patent wars' are stifling innovation, especially among smaller start-ups.

Technology analyst Ross Dawson says some of the patents are so broad and so vague, it's become difficult for software designers to avoid overstepping the mark.

"More and more true innovation in the start-up space is being stymied because there are large companies that are blocking that, or suing small companies that don't have ability to respond," he said.

"So clearly we're seeing the current patent landscape detrimental to start-ups, and [to] a lot of innovation that would be greatly beneficial to consumers and society."

But Matthew Swinn is more sceptical of the impact - particularly to the larger companies.


"I think that large companies like Samsung when faced with patent blockers, whether Apple or not, will use that as an opportunity to innovate around them," he said.

"[We] will continue to see better, new devices come to the market which is probably good for consumers."

It's estimated that buying and litigating over patents have cost the smartphone industry as much as $20 billion in the last two years, and Ross Dawson says that needs to change.

"It's clear that the patent system today is broken, and one radical proposal which merits consideration is doing away with patents altogether," he said.

"We do need to be able to find innovation that rewards companies, but we also need to be sure their ideas can be taken and built out - so patents need to be an enabler, not a blocker of innovation."