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12.16.13

Fee Shifting (or Patent Trolls Busting) Not the Solution to Patent Problem, Scope of Patenting the Real Issue

Posted in Apple, Patents, Samsung at 2:54 pm by Dr. Roy Schestowitz

Summary: Corporations are still defining the problem with patents — wrongly — and then tackle the wrong problem so as to benefit themselves

Julie Samuels, who works for the EFF on behalf of billionaire Mr. Cuban (who invested in a patent troll, Vringo), continues to miss the point when it comes to patents. She focuses on trolls/fees rather than on software patents. “Today,” she writes, “EFF—along with Engine, the App Developers Alliance, and Public Knowledge—filed a brief asking the Supreme “Court to retain some sanity in the law and tighten up the rules around fee shifting. Fee shifting, sometimes called “loser pays,” is already in the Patent Act. While the statute currently says that “the court in exceptional cases may award reasonable attorney fees to the prevailing party,” the Federal Circuit has created a standard that makes this law essentially meaningless—fees are granted in but the smallest fraction of cases.””

Well, Apple is said to have “spent over $60 million on U.S. lawyers against Samsung”, which probably means that Samsung had to pay a similar amount. Apple has sued some other companies, notably HTC (which is how Apple’s litigious war on Android began). Reuters says that “Apple Inc has paid its leading outside law firm approximately $60 million to wage patent litigation against Samsung Electronics Co Ltd in a California federal court, according to Apple legal documents filed late on Thursday.”

Also, according to this other report, “On Thursday, a Korean court ruled that Apple did not violate three Samsung patents related to messaging services. The Seoul Central District Court rejected Samsung’s request that Apple should pay 100 million won ($95,000) in damages, as well as a ban on sales of older iPhones and iPads.”

This shows that scope and patents themselves — not fees — are the problem. Apple’s patents are beyond ridiculous and they relate to software. Samsung’s patents, by contrast, are often hardware patents because Samsung is a hardware company (Apple is a branding company that integrates components from suppliers such as Samsung).

The bottom line is, in order to address the core problem we need to restore the debate’s focus on software patents, not size of litigant (e.g. troll) or the fees. Here is Linux Foundation staff (front for corporations) writing about Samsung and Apple in the context of FRAND (which to a lesser degree relates to fees, not patent scope). Updegrove writes: “Ever since Apple set off the mobile platform wars by suing Samsung for what Steve Jobs believed were egregious borrowings of patented Apple smartphone innovations, the courts have been busy processing the disputes. One of the most effective weapons the combatants made use of has been the so-called “standards essential patent” (SEP). And the armament of SEPS is very large, because each mobile device which implements many hundreds of standards. For example, if a company owns a SEP necessary to include a camera, wireless function or other key feature, the owner of the SEP can its price to license it, or even refuse to license it at all.

“That is, of course, unless the SEP owner was part of the standards setting organization (SSO) that developed the standard in question, and had made a commitment to license that SEP on fair, reasonable and non-discriminatory (FRAND) terms.”

Since huge corporations hijacked the debate about patents (and now fund the lawyers at the EFF to do the same) we have sort of lost hope when it comes to fixing the US patent system. Corporations do whatever the heck they want there. No wonder Professor Lessig, a copyright pioneer, sort of abandoned his copyright reforming efforts and now works hard to tackle political corruption in his country. Patents, like copyrights, have become a political problem. It’s all about money and those who have the money set the rules. The EFF spoke about software patents a year ago; it no longer speaks about it. Follow the money.

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