Smart-phone lawsuits

Nasty legal spats between tech giants may be here to stay

Oct 21st 2010

Clarification to this article

HISTORY buffs still wax poetic about the brutal patent battles a century ago between the Wright brothers and Glenn Curtiss, another aviation pioneer. The current smart-phone patent war does not quite have the same romance, but it could be as important.

Hardly a week passes without a new case. Motorola sued Apple this month, having itself been sued by Microsoft a few days earlier. Since 2006 the number of mobile-phone-related patent complaints has increased by 20% annually, according to Lex Machina, a firm that keeps a database of intellectual-property spats in America.

Most suits were filed by patent owners who hail from another industry, such as Kodak (a firm from a bygone era that now makes printers), or by patent trolls (firms that buy patents not in order to make products, but to sue others for allegedly infringing them). But in recent months the makers of handsets and related software themselves have become much more litigious, reports Joshua Walker, the boss of Lex Machina.

This orgy for lawyers is partly a result of the explosion of the market for smart-phones. IDC, a market-research firm, expects that 270m smart-phones will be sold this year: 55% more than in 2009. “It has become worthwhile to defend one’s intellectual property,” says Richard Windsor of Nomura, an investment bank.

Yet there is more than this going on. Smart-phones are not just another type of handset, but fully-fledged computers, which come loaded with software and double as digital cameras and portable entertainment centres. They combine technologies from different industries, most of them patented. Given such complexity, sorting out who owns what requires time and a phalanx of lawyers.

The convergence of different industries has also led to a culture clash. When it comes to intellectual property, mobile-phone firms have mostly operated like a club. They jointly develop new technical standards: for example, for a new generation of wireless networks. They then license or swap the patents “essential” to this standard under “fair and reasonable” conditions.