Semiconductor IP News and Trends Blog
New High for Litigation Low
Is every website in patent infringement? The depth of litigation craziness reaches a new high for both the semiconductor IP and global technology markets.
Our electronic-design automation (EDA) and semiconductor intellectual property (IP) industries are no strangers to patent litigation. Do you remember the Synopsys, Cadence and Avanti tussle of recent years? I’m hesitant to even mention current lawsuits for fear of nasty letters in my inbox.
As onerous as litigations have become in the niche EDA and IP market, it seems even worse in the larger world of electronic systems.
In analogy to the financial crisis of 2008 that seriously damaged the global economy, the technology litigation crisis of today threatens to damage innovation and market growth. Consider Google’s demand that Apple pay 2.25% in royalties for every iPhone sold. If that amounts to more than $3 per unit – a conservative estimate, then the total cost to Apple would be $100 million for just its last quarter sales of iPhone. Talk about wealth redistribution!
Or consider the case now pending in the U.S. Federal Court concerning whether the Internet is violating a single company’s invention. The price tag for this fiasco, if awarded, would be unimaginable. Almost every website would be in infringement. Wired reported that the claimant is Michael Doyle, a Chicago-based biologist who owns Eolas Technologies, Inc. Is this yet another case of what is commonly known as patent trolling? But wait, it gets better (or worse, depending upon your point-of-view).
Brian Bailey, editor at EDA Designline, recently blogged about a patent for “patent trolling.” Incredibly, this patent embodies the very essence of patent trolling, namely, to buy a patent with the intent to sue everyone else in violation of that patent. Brian elaborates the disturbing nature of this patent:
… (this comes from a) company who clearly believes that either they can make money from lawyers or they are afraid that there are companies who have patents that they violate and are scared of them ending up in the hands of someone who could sue them, so they will make it impossible for one company to sell a patent to someone else.
As a blog commenter noted, no patent troll would be able to operator without violating this patent or obtaining a license. I guess that would make this the grand-daddy of all patent trolls. I wonder what a high-profile advocate of patent buying and selling like Intellectual Ventures would say about this approach. (see, “Will Patent Trolls Liquify the IP Market?”)
One can not help but feel that the only beneficiary from this level of litigation madness will be the legal community. These days, the Lawyer-to-Engineer ratio must be running at an all time high.
What is the solution? Both Apple and Microsoft, purported holders of the world’s largest IP war chests (or should it be “shields?“), hope that a principal known as FRAND or “fair, reasonable and non-discriminatory” will be the guiding light to future patent licensing deals.
But the devil is in the details. How will “fair and open” be interpreted? What do these terms mean? For example, what Google assumes is fair compensation (as noted above) is hardly the view shared by Apple.
It would seem that we still have a long way to go before the litigation craze climbs down from its current heights.
This entry was posted in General and tagged Apple, Avanti, Brian Bailey, FRAND, Google, litigation, Microsoft, patent, patent trolls. Bookmark the permalink.
View all posts by John Blyler
John, I assume you like spreading FUD. Either that or even basic fact checking is beyond your capabilities. The Cadence Avanti case was about software being stolen by Avanti from Cadence and sold as its own. It resulted in criminal charges, hardly a case that can be classified as trivial as you imply. Suppose someone stole your car–would you shrug that off because you have no taste for litigation?
Brian should know, as should you, that the “patent” you quote is not a patent. It’s a patent application that will spend 3-5 years in limbo before being examined and rejected. The author is simply having some fun for a small expense until then.
There are very important and controversial points about intellectual property these days but you choose to pick extreme examples in order to scare or amuse people. Too bad you don’t have the intellectual capacity to write an article of substance that actually examines the pros and cons of current intellectual property law as it applies to high tech. It’s much more interesting that the Saturday morning cartoon you’ve written here.