Intellectual Propriety

The mess that is the U.S. patent system has become a major impediment to both technological innovation and economic efficiency.

In an attempt to provide clarity and reduce litigation, Court of Appeals Judge Richard Posner, who "commands a respect and influence surpassed on the federal judiciary only by the nine justices of the U.S. Supreme Court", recently threw out a lawsuit between Apple and Google in which the tech giants accused the other of patent infringement. Judge Posner has deplored the "social waste" of phenomena such as defensive patenting and patent trolls:

Defensive patenting means getting a patent not because you need it to prevent copycats from making inroads into your market, but because you want to make sure that you're not accused of infringing when you bring your own product to market. The cost of patenting and the cost of resolving disputes that may arise when competitors have patents are a social waste.

Patent trolls are companies that acquire patents not to protect their market for a product they want to produce -- patent trolls are not producers -- but to lay traps for producers, for a patentee can sue for infringement even if it doesn't make the product that it holds a patent on.

The Apple-Google case that Judge Posner dismissed was just a warm-up to the Apple-Samsung "Patent Trial of the Century" that began this week in San Jose. The case's resolution could well alter the "trajectory" of future litigation. The issues are complex and important. One example--the rules for standards-essential patents:

When an industry decides that a technology shall become the standard, companies with those patents on the technology get an immediate financial windfall, because everyone has to pay for its use.

The trade-off for those companies: agreements and rules to prevent them from price gouging. Holders of standards-essential patents typically agree to license them on terms that are "fair, reasonable and nondiscriminatory."

But what constitutes a "fair" or "reasonable" price is a matter of much debate. What should happen if a company balks at a licensing offer and uses the patent anyway is also an unsettled matter.

The law surrounding them is "extremely murky," according to Brian J. Love, a patent expert and law professor at Santa Clara University. The Apple v. Samsung case could provide some clarity.

43-year-old Judge Lucy H. Koh will need the wisdom of Solomon to sort through all the claims and steer the jury toward a satisfactory resolution.