Legal Archive

Joel Spolsky is ramping up the fight against patent trolls, the scourge of small companies and startups trying to advance technology in new and interesting ways. Sadly, while Spolsky is right on the money on everything, and even though the fight has to start somewhere, I think he - and others - are doing the industry a huge disservice by focussing entirely on pure patent trolls, without actually addressing the other side of the coin: medium and large business engaging in the same patent troll behaviour.

Late last week, Nokia dropped what many consider to be a bomb on the WebM project: a list of patents that VP8 supposedly infringes in the form of an IETF IPR declaration. The list has made the rounds around the web, often reported as proof that VP8 infringes upon Nokia's patents. All this stuff rang a bell. Haven't we been here before? Yup, we have, with another open source codec called Opus. Qualcomm and Huawei made the same claims as Nokia did, but they turned out to be complete bogus. As it turns out, this is standard practice in the dirty business of the patent licensing industry.

Nokia has gotten an injunction against HTC in Germany over a patent on a power-saving feature in Qualcomm chips (?!). Nokia's response illustrates why the company started its recent patent offensive: "Nokia is pleased with this decision, which confirms the quality of Nokia's patent portfolio." If nobody buys your phones and your business is failing spectacularly, you have to promote something else of value to paint yourself as an interesting acquisition target. Patents it is, then. If you can't compete, litigate. Update: HTC's statement is pretty damning.

"Google and MPEG LA announced today that they have entered into agreements granting Google a license to techniques that may be essential to VP8 and earlier-generation VPx video compression technologies under patents owned by 11 patent holders. The agreements also grant Google the right to sublicense those techniques to any user of VP8, whether the VP8 implementation is by Google or another entity. It further provides for sublicensing those VP8 techniques in one next-generation VPx video codec. As a result of the agreements, MPEG LA will discontinue its effort to form a VP8 patent pool." The word that stood out to me: the auxiliary verb 'may', which has a rather low epistemic modality. To me, this indicates that this is not so much a clear-cut case of VP8 infringing upon patents, but more a precautionary move on Google's part.

"The European Commission has imposed a EUR 561 million fine on Microsoft for failing to comply with its commitments to offer users a browser choice screen enabling them to easily choose their preferred web browser. In 2009, the Commission had made these commitments legally binding on Microsoft until 2014. In today's decision, the Commission finds that Microsoft failed to roll out the browser choice screen with its Windows 7 Service Pack 1 from May 2011 until July 2012. 15 million Windows users in the EU therefore did not see the choice screen during this period. Microsoft has acknowledged that the choice screen was not displayed during that time." Burn.

Judge Lucy Koh has almost halved the $1 billion in damages the jury awarded to Apple. "Koh found two main errors in the way the jury calculated the damages awarded to Apple. They used Samsung's profits to determine the amount the company owed for infringing some of Apple's utility patents - a practice only appropriate when calculating damages owed when design patents have been infringed. They also erred when calculating the time period Apple should be awarded damages for. Koh explains that Apple was only due damages for product sales that occurred after Cupertino informed Samsung of its belief that the violations were taking place." It's almost as if the bunch of random people in this jury had no clue what they were doing in what is possibly the most complex patent trial in history.

"The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded - which, as evidence shows, has no correlation with measured productivity. Both theory and evidence suggest that while patents can have a partial equilibrium effect of improving incentives to invent, the general equilibrium effect on innovation can be negative. A properly designed patent system might serve to increase innovation at a certain time and place. Unfortunately, the political economy of government-operated patent systems indicates that such systems are susceptible to pressures that cause the ill effects of patents to grow over time. Our preferred policy solution is to abolish patents entirely and to find other legislative instruments, less open to lobbying and rent seeking, to foster innovation when there is clear evidence that laissez-faire undersupplies it. However, if that policy change seems too large to swallow, we discuss in the conclusion a set of partial reforms that could be implemented." Written by economics professors Michelle Boldrin and David K. Levine, published in the winter issue of the Journal of Economic Perspectives. Via John Siracusa.

Back in 2010, Apple, Google, Intel, Adobe, and a few others settled with the US Department of Justice regarding their anti-poaching agreements concerning employees. While the CEOs did a good job of escaping possible prosecution, the affected employees filed a class action lawsuit about this, and judge Lucy Koh has just unsealed a number of emails concerning this case. They paint a pretty grim picture of Steve Jobs and Eric Schmidt engaging in mafia practices, threatening smaller companies with patent litigation if they didn't agree to the no-poaching agreements, or demanding to handle matters verbally as to not leave a paper trail.

"The Chinese government issued new rules on Friday requiring Internet users to provide their real names to service providers, while assigning Internet companies greater responsibility for deleting forbidden postings and reporting them to the authorities." The crazy thing is not that China is tightening its control over the internet. No, the crazy thing is that if it were up to our own politicians, western governments should do the same.

"Samsung's move to drop all requests for injunctions against Apple in Europe may not be enough to escape sanctions from the European Commission over the alleged abuse of its standards essential patents. EC Vice President Joaquin Almunia said during a press conference on Thursday in Brussels that his office will continue with its investigation against Samsung and will release a 'statement of objections' within the coming weeks."

Lots of news about Apple vs. Samsung (and vice versa) in both the US and Europe today. In the US, judge Koh dealth two blows: one to Samsung (no retrial based on juror misconduct), the other to Apple (no permanent sales ban). In Europe, in the meantime, Samsung announced it will cease all lawsuits injunction requests against Apple... But only in Europe.

"The European Commission has fined seven international groups of companies a total of EUR 1,470,515,000 for participating in either one or both of two distinct cartels in the sector of cathode ray tubes. For almost ten years, between 1996 and 2006, these companies fixed prices, shared markets, allocated customers between themselves and restricted their output. One cartel concerned colour picture tubes used for televisions and the other one colour display tubes used in computer monitors. The cartels operated worldwide. The infringements found by the Commission therefore cover the entire European Economic Area. Chunghwa, LG Electronics, Philips and Samsung SDI participated in both cartels, while Panasonic, Toshiba, MTPD (currently a Panasonic subsidiary) and Technicolor (formerly Thomson) participated only in the cartel for television tubes." The EU can do good things.

Interesting news in the middle of the night: Apple and HTC have announced they've settled all their patent disputes, bringing an end to all running lawsuits between the two companies. The companies signed a ten-year cross-licensing deal. Considering Apple's legal assault on Android hasn't been going particularly well, this really shouldn't come as a surprise.

Yet another loss for Apple in Europe - Dutch courts have just ruled in favour of Samsung concerning supposed infringement of a patent detailing ignoring multiple touch inputs, affirming last year's provisional ruling. Apple asked for a ban on loads of Galaxy devices. However, the courts ruled that Samsung and Android do not infringe this patent, also referring to similar rulings in the UK and Germany where Apple lost on similar grounds, while also affirming the British judge's ruling that the patent in itself isn't 'inventive'. Apple has been ordered to pay all legal proceedings, too. In case you're wondering, you're not alone when it comes to pattern recognition: Apple's only true win so far has been in a jury trial in the US. Make of that what you will.