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The biggest weapons in the smart phone and tablet wars of 2011 aren’t processors, touchscreens, operating systems or app stores. They’re patents.
The last three years have been a blur of product and software innovation in the mobile industry, driven by the engineers at Apple, Google and numerous phone makers, as well as the talented developers making apps for their devices. Now the lawyers are making their presence felt. Who’s suing who? It would be quicker to explain who’s not suing who.
In fact, the legal situation around mobile patents has been so tangled for some time, people have had to resort to diagrams to make sense of it. Back in October, the Guardian and New York Times published a colourful flow chart festooned with arrows to show the interweaving lawsuits between Apple, Nokia, Motorola, Microsoft, HTC, Samsung, Google and the rest.
More recently in March, specialist blog FOSS Patents created a chart tracking only Android-related litigation in the previous 12 months, with 27 separate lawsuits.
The pace hasn’t let up since, with Apple, Google and Microsoft the companies at the epicentre of the patent battlefield, although there are plenty of other combatants too. There are tens of thousands of patents relating to mobile phones and the software that runs on them, meaning that as a rule of thumb, most of these companies can at least have a crack at a patent infringement case against any of the others. And so they have.
Deals being cut
Whatever metaphor you use — Cold War governments with nuclear missiles on standby or gangsters growling in a room while pointing loaded guns at one another — the logical answer is thrashing out deals rather than mutually assured destruction. That’s often been the conclusion, with often surreal implications. In May, industry blog Asymco calculated that Microsoft had made $150m from sales of HTC Android handsets, thanks to a settlement that gave it $5 per handset. At the time, Microsoft’s total revenues from Windows Phone were thought to be a mere $30m.
The swirl of litigation has recently got more serious, though. Earlier this month, Apple won a temporary injunction barring the distribution of Samsung’s Galaxy Tab 10.1 tablet across the EU, apart from in the Netherlands, where it had a separate case going — in both cases focused on design rather than patent infringement.
Although that injunction has since been suspended, Apple has filed a deeper complaint that aims to remove every Galaxy-branded Android device from sale across Europe, including the Galaxy S smart phones. It’s also training its sights on the Motorola Xoom.
So what’s really going on here?
The official statements in most of these lawsuits are heavy on the faux-outrage, presenting the litigation as a principled stand against expensively developed intellectual property being wilfully stolen. And there’s certainly an element of necessity to these lawsuits: if you have the patents, you’re obliged to defend them (or license them).
But actually, a much bigger factor is the desire to take any steps possible to slow down rival companies in the current landgrab around the smart phone and tablet markets.
There is huge growth in both, as people buy their first tablet, and upgrade from a feature phone to something smarter. Much as we’d like to think technological innovation is the key to selling lots of devices, there’s as much focus on litigation as a way to stop rivals from doing just that. Not least because if the goal is to get that rival to stump up licensing payments for every phone or tablet they sell, the prospect of those devices being removed from sale for even a month or two during this growth period is a handy lever to strike a deal.
Do you need to know or care about this?
If you’re looking to buy a Galaxy Tab 10.1, it’s pretty important. Otherwise, probably not. Most of these lawsuits will be settled either in or out of court in the end, with large sums of money changing hands before it ever gets to the point of products being whipped off the shelves.
Even so, the patent warfare is having some much more visible effects too. Google’s announcement earlier this week that it’s going to buy Motorola for £7.6bn is the perfect example. There are dozens of reasons why Google shouldn’t buy Motorola, most importantly the risk of alienating its other Android manufacturer partners.
The only convincing reason to do the deal was to get its hands on Motorola’s 17,000 patents, to defend Android against Apple, Microsoft and other big tech firms waving lawsuits. This, after Google lost out in a bidding auction for 6,000 patents from Nortel Networks in June this year to a group including Apple, Microsoft, BlackBerry makers RIM and Sony.
Now Google owns Motorola, which should at least mean some interesting smart phones a year or so down the line, and possibly means the likes of HTC and Samsung will start putting some weight behind non-Android phones, providing more choice for potential smart phone buyers. Meanwhile, Nokia — caricatured for much of the year as an industry dinosaur lurching down the dumper — suddenly looks like a red-hot potential acquisition. Why? When it settled its legal battle with Apple in June, it claimed to have more than 10,000 patent families — not just individual patents.
It’s dispiriting to think that one of the big factors governing the phones and tablets we’ll be buying in 2012 and beyond will be the backroom machinations of industry lawyers in 2010 and 2011. Still, here’s hoping we can soon get back to gawping at product shots of innovative new devices, rather than scratching our heads at patent battle flowcharts.
