This page is an archive from our previous website. Please check out our new website where you can read new COMMENTARY eNewsletters, TELL IT LIKE IT IS blog posts or Press Releases.
Intellectual property protection is important―companies spend a lot of money to develop technologies and products and have a right to protect what is theirs. However, the line blurs a little, for me, when the patent is purchased and then interpreted by the company that bought it.

I Am Not A Patent Attorney

Friday, June 08, 2007

But I have to tell you, I agree with the statement issued by CTIA -The Wireless Association.  that the United States International Trade Commission's announcement of an importation ban on handsets containing certain baseband processor, transmitter, and receiver chips and chipsets.In their statement they say, "The decision flies in the face of public policy that encourages the availability of broadband services and products, and could have the unintended effect of impairing the wireless industry's efforts to improve communications in areas such as public safety. Consumers should not have to pay the price for legal debate that could be settled by other means."


For those of you who have not been following the story, this is in reference to Broadcom's "victory" in convincing the ITC to rule against Qualcomm and order a ban on wireless phones that include certain chips made by Qualcomm that are part of an intellectual property dispute. According to the Broadcom statement on its Website, this ban is based on the May 2005 complaint by Broadcom on patent infringement by Qualcomm and the ruling by a U.S. Federal Jury on May 29th that Qualcomm was infringing on three of Broadcom's patents for which Broadcom was awarded almost $20 million in damages. And the wrangling goes on-the order states that existing phone models and PC data cards are exempt if they don't include Qualcomm's infringing chips.


Turning to the Qualcomm site, Qualcomm states that it disagrees with the decision and will seek a stay of enforcement in the Federal Circuit Court of Appeals. It goes on to point out that "the public industry that would result from the remedy imposed by the Commission is grossly disproportionate to any benefit flowing to Broadcom from such a broad enforcement of a recently-purchase patent." Qualcomm also states that Broadcom has never accused any wireless manufacturers or operators of infringement or any other wrongdoing.


I followed the entire NTP/RIM saga in the press, the threats of BlackBerry disruptions around the world and the settlement RIM had no choice but to enter into with a company that had no intention of doing anything but making money from someone else's products. There was no disruption of service and the matter was settled with a large amount of money flowing to NTP.


Intellectual property protection is important―companies spend a lot of money to develop technologies and products and have a right to protect what is theirs. However, the line blurs a little, for me, when the patent is purchased and then interpreted by the company that bought it. As I said, I am not a patent attorney, but I am not at all sure that a non-technical jury or judge can make objective decisions about the intricacies of patents, prior art and all that goes along with that. But such matters do belong in a court to be settled. Strong-arm tactics such as threatening to shut down BlackBerry service or invoking a ban on products that include Qualcomm chips that "infringe" on the patents reminds me of when I worked for a union shop as a non-union employee. The union went on strike and stayed out for months. Union members suffered and their families suffered. When the new contract was signed, I did some math and figured out that during the entire term of the new three-year contract, union workers would not even recoup the wages they lost during the three months they were on strike. Further, the companies that had been shut down during that period lost customers to other shops that were not unionized. When the dust settled, there was no winner.


Throughout history, the bigger a company gets, the more legal action is taken against it, merited or not. Just take a look at Microsoft and what it has had to deal with over the past decade.


The wireless industry is fragile at the moment and the world's economy is not what I would consider to be stellar, but the wireless industry is doing fairly well. To impose arbitrary sanctions on a company when there is litigation in progress, even after a ruling that is favorable to the other side, is counterproductive and in the end, the case will be settled, money will change hands and it will be life as usual.


That is the way our system is meant to work. Using tactics such as imposing an injunction or threatening to shut down wireless email around the world is simply counter-productive and, I believe, will ultimately hurt both parties equally.


I am not taking sides here, simply agreeing with the CTIA statement. This is not good for the industry or for our customers, and the fact that the decision is being made by the ITC, which is not made up of experts in this field, is just plain wrong!


COMMENTS: This is an archived post. Commenting is no longer available.

Miles Jackson - 06/08/2007 14:42:21

There is a geat deal of misunderstanding about patents which causes many people to just want to do away with them entirely. It is an unfortunate consequence of how patents operate that they only make it into the news in instances like this, and people see them as instruments for blackmail. My understanding is that (in the US) a patent grant only gives the patentee the right to PREVENT others from making, using, or importing the described invention. It is a promise from the US that the GOVERNMENT will enforce the promise. It is exactly this promise from which a patent derives its value, for if the government does not live up to its promise, then others have no incentive to pay appropriate licensing fees.

So I respectfully disagree with the CTIA. Having the ITC live up to the US government's promise to prevent importation of infringing materials validates the value of patents and encourages investment in leading-edge research. It is THAT research investment which made the 3G networks possible in the first place and the company that created the invention deserves to be able to recoup their investment by selling the patent rights.

The fact that the current holder of the patents is not the company that developed the technology should not give others the right to steal the invention without consequences. I would expect that you would laugh at someone who argued that it was OK for him to steal your car because you only bought it -- you didn't build it, therefore, it's OK for him to steal it. The same is true for patent rights. If those rights have value, the holder of the rights should be allowed to "sell" those rights to another in order to raise capital for their next venture. If those rights diminished upon transfer, the inventor would have to devote more and more of his time on his older inventions and not be able to shift his attention to developing the NEXT big thing.

Qualcomm can remove the ban by properly licensing the technology from the owners OR by re-designing their ICs to avoid the claimed material.

[This post represents the personal opinion of the writer only.]

Chris Coles - 06/08/2007 16:58:46

I have to admit to being caught between two stools. On the one hand I have to agree with both Andrew and the CTIA that this sort of thing can only do damage to the industry. But, sadly, on the other hand, this is something that was always going to happen. Miles is not correct to state that the US government takes responsibility for upholding patent rights. It does not. It grants a piece of paper that is very well known as a license to sue and from that moment onwards expects the patent holder to fight through the courts. If they cannot afford to; tough! The consequence is that, for many years now, there has grown an illusion that, you can always throw money at patent problems by purchasing the most expensive lawyer who keeps you out of harms way.

Patents are the bedrock of a free society and the rights engendered in them must be upheld. You break the speed limit, you get fined. The law has penalties. Just because the company is a household name does not prevent it from breaking the rules and getting fined. And just like any other area of life, if you can afford to pay the piper, you can string the whole process along for decades. But as Andrew correctly shows us; in the end, it would always have been better to deal than fight. Sadly it remains true, you can bring the horse to the water, but you cannot make it drink, if it does not want to.

Andrew Seybold - 06/10/2007 18:15:42

Thanks to both Miles and Chris for their views, I still stand by my comments, and agree with Chris, the United States Government is not responsible for the enforcement of patents, they issue them, in good faith, but we have also seen a number of patents that shoudl never have been issued, I don't know how we are going to prevent that from happening, but our economy, at the moment, is fragile in many areas, housing, energy, and more. This ruling could have a negative impact on our first responder community, and will have an impact on the health of the wireless industry, and I don't believe they should have acted this quickly without taking into account these issues.