05.15.18

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Xiaomi, Samsung, TCL and Others Demonstrate That in a World With an Abundance of Stupid Patents Like Design Patents Nobody is Safe

Posted in America, Apple, Asia, Samsung at 9:26 am by Dr. Roy Schestowitz

Zach Snyder patent

Summary: The “Cult of Patents” (typically a cabal of law firms looking to have everything on the planet patented) has created a battlefield in the mobile world; every company, once it gets big enough, faces a lot of patent lawsuits and dying companies resort to using whatever is in their “portfolio” to destroy everyone else inside the courtroom (or demand ‘protection’ money to avert lawsuits)

SEVERAL days ago we wrote about failing mobile giants (Coolpad included) resorting to litigation. This is nowadays happening in China as well. As an Asian news site put it yesterday:

Smartphone maker Coolpad has sued Xiaomi for infringement of three patents that are associated with the user interface.

The company Coolpad asked a Shenzhen court to cease selling Xiaomi smartphones five.

Another Asian site (south Asia) mentioned it yesterday, albeit only among many other topics:

“Interesting patents – Voting just got interesting, Wear healthy, stay healthy!, Supreme Court issues notice to Nuziveedu Seeds, Coolpad Sues Xiaomi, Brazil & EU reject Gilead’s patent on hepatitis C & HIV drugs, Peripheral claiming versus Central claiming, Patent Tip of the week and other Weekly Patent News,” presented by the Patent attorneys and experts of BananaIP Counsels, India’s leading Patent Firm.

This isn’t the only legal battle Xiaomi is facing. On the patent front, as mentioned yesterday, there’s also the Shenzhen-based Yulong:

A lawsuit filed in China last week accused Beijing-based Xiaomi of developing mobile devices which contain patent infringing technology.

The complaint was filed at Jiangsu Province Nanjing Intermediate People’s Court on Thursday, May 10.

Yulong Computer Telecommunication Scientific (Shenzhen) Company, a provider of telecommunications equipment and a subsidiary of Coolpad Group, initiated the suit.

The complaint accused Xiaomi, a developer of consumer electronics and software, of infringing one of Yulong’s invention patents (Chinese patent number ZL200610034036.7). The patent covers a “multi-mode mobile communication terminal interface system and method for call recording”.

Further east in Japan Kyocera is becoming litigious — a rather rare thing for Japanese firms. It’s actually suing German companies in Germany using ‘haptic’ patents. Here are some details:

Japanese conglomerate Kyocera has very rarely asserted its patent rights in recent years; but a recent deal with Bosch and an assertion against another German supplier show that even in traditionally conservative Japan, the potential prize represented by the auto sector is too big to ignore. Last Tuesday, the company announced a licence agreement with Robert Bosch Car Multimedia, a subsidiary of industrial conglomerate Bosch. The noticed disclosed only that the German firm would gain access to haptic feedback technology for use in automotive solutions. This deal came just one month after Kyocera launched a German patent litigation suit against another auto parts supplier – Preh GmbH…

Right next to them in Korea there’s a battle Samsung faces half a world away — in the United States. Apple is dragging Samsung back to court — a patent battle that receives a lot of media attention (e.g. [1, 2]) mainly because Apple is involved. Corporate/mainstream media has a rather poor grasp/understanding of the case, so it’s mostly repeating superficial claims (without proper assessment/fact-checking/healthy level of scepticism). To quote Tech Spot‘s background to this (objective chronology of events):

Apple and Samsung are back in court over a patent dispute that started back in 2011. This will be the third court appearance over the same five design infringements. Two of the patents involve the front and back look of the original iPhone. A third violation is over the GUI (graphical user interface), and two others concern software functionalities such scrolling and pinch to zoom gestures.

In 2011, Apple sued Samsung claiming the South Korean company’s phones, including the Galaxy S2, copied the iPhone in both physical and software design. The Cupertino-based firm was awarded over one billion dollars in 2012. The judge in the case reduced the award to around $940 million citing that the jury had made an error in its calculations. A second trial resulted in the award amount being further reduced to about $400 million.

For a better, in-depth analysis of this we suggest reading informed blogs. We previously wrote about the design patents at hand [1, 2] and so did Josh Landau (CCIA), who last night noted that “[i]f design patents on a small piece of a product can regularly be applied to the profits on the entire product, it will have a huge impact on whole swaths of industry—many of them far from the high-tech sector.”

Indeed. Apple’s designs aren’t even particularly clever; some are downright laughable!

As Landau put it:

A district court trial. A retrial, after part of the verdict was vacated. An appeal to the Federal Circuit. A Supreme Court opinion with a remand to the Federal Circuit. A remand from the Federal Circuit back to the district court. Seven years after Apple originally filed suit against Samsung, we’re right back in Judge Koh’s courtroom for the sixth part of this dispute, a third jury trial on damages.

[...]

If design patents on a small piece of a product can regularly be applied to the profits on the entire product, it will have a huge impact on whole swaths of industry—many of them far from the high-tech sector. Those industries will be placed at risk of in terrorem threats of litigation and chilling effects on product design and development. Disgorgement of total profits on the whole product for a design patent covering only a small component will reduce willingness to work with smaller suppliers who can’t indemnify the manufacturer. It will make manufacturers seriously reconsider providing open access to their systems. It might even drive a wave of design patent troll lawsuits.

Another decent analysis came from Florian Müller, who has been following these trials for 8 years. Here’s his latest:

There we go again. For the fourth time in six years (minus a few months), Apple and Samsung will square off again, starting today, in the San Jose building of the United States District Court for the Northern District of California. It’s the third trial in the first Apple v. Samsung case (the related complaint was filed in April 2011) and the fourth in total (if we add the 2014 trial in the second case, filed in 2012).

Via Twitter I provided the parties with a link to the Guinness Book of Records website. This might be a new record: four trials between the same two parties in one federal district court within less than six years.

In some ways, it’s déjà vu all over again, or Groundhog Day, as Korean-American Judge Lucy H. Koh calls it. But not in all ways. Samsung scored a major victory in the Supreme Court in 2016 on what should be considered the appropriate article of manufacture for determining design patent damages in the form of a disgorgement of unapportioned infringer’s profits under 35 U.S.C. § 289. Apple had been awarded huge amounts at two previous trials, based on a standard overthrown by the highest court in the land. Now it will be up to a jury whether the ultimate outcome will, or will not, be reflective of Samsung’s SCOTUS victory.

There’s the legal part, which is a test that the U.S. government laid out in an amicus curiae brief filed with the Supreme Court. That one is suboptimal, and people far more qualified than me to discuss design patent law find it wanting. There are various restrictions on the parties, especially on Samsung, as to what kind of evidence and testimony they’re allowed to present and what kinds of argument they’re allowed to raise. And what may ultimately decide is psychology: whether the jury will, or will not, buy Apple’s portrayal of Samsung as a copyist.

What will happen at the end? Well, we hope that not only will Apple’s case collapse but design patents as a whole will collapse as well, in due course. Nobody benefits from these except patent lawyers, who already made a fortune from these pointless patent disputes between Apple and Samsung.

We suppose that one day in the not-so-distant future Apple will become another BlackBerry. Apple may become just a pile of patents and a long list of lawsuits. This certainly is what happened to Ericsson, whose latest news isn’t about a product but about a lawsuit (Ericsson Inc. et al v TCL Communication Technology Holdings Limited et al). Ericsson no longer does much except feeding patent trolls and suing lots of companies using patents. Now it wants millions for doing nothing at all, just sitting on a bag/bundle of very old patents:

The court granted plaintiff’s motion to reconsider an earlier order granting defendant a new damages trial and upon reconsideration reinstated the jury’s $75 million verdict because the extensive evidence of unaccused products was not reflected in the verdict.

Notice the trend in all the above cases; companies love to brag about patents being “defensive” and all, but once their real business grinds to a halt all they have to show for it is a list of lawsuits. This means that the underlying problem is the patents themselves, not only who uses them and when.

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