The Rotten Apple Part 2: Exploiting a Flawed Patent System

The spirit of patent law, and its recent corrupted implementation
The stated purpose of the U.S. patent system is “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;” in other words to encourage innovation. However, recent legal maneuvering by Apple has sought to stifle innovation by seeking injunctions and restraining orders banning sales of competing products.

Sure, Apple will claim that their lawsuits are designed to encourage innovation by preventing others from stealing its inventions, but does anyone really believe that is the company’s true purpose? Does anyone actually expect Apple to develop more innovations at a faster pace once its competition is locked out of the market? Recent history indicates just the opposite.

Broad, Vague Patent Language
One of the biggest problems with the way the patent system is implemented now is that the patents granted are very vague in their wording and overly broad in definition and scope. For example, Apple filed a legal brief last December in which it provided a list of “look and feel” changes Samsung should have made so as not to infringe on the Cupertino company’s iPhone and iPad patents. Even professed “die-hard Apple fan” A.T. Faust III at AppAdvice acknowledged that Apple’s list of non-infringing alternative designs was “absurd.”

This unbelievably outrageous list implied that Apple has the exclusive right to manufacture tablets that have a black, rectangular slab with rounded corners and a flat screen. It should be noted that Apple actually won injunctions in Australia and Germany against Samsung based on these ridiculous claims (see this document filed in Germany that illustrates the design features Apple claims exclusivity for).

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Apple’s “exclusive” tablet design illustrated in a German legal document

Arguing that a “black slab with rounded corners” tablet design should be patented is like saying that Ford should sue all other auto manufacturers for designing their vehicles with four wheels in a rectangular formation, a spare tire, and a steering wheel. Just imagine how that would have affected the auto industry had Ford gotten injunctions against all those other automakers.

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A Ford Model T, with “four wheels in a rectangular formation, a spare tire, and a steering wheel”

Patents Traded, Bought, and Sold
Another huge flaw in the modern patent system is exploited by Apple for the purpose of attacking rivals, and said rivals for the purpose of counterattacking Apple. The problem is that these days, patents are commonly treated as property that can be traded, bought, and sold as “investments” rather than being exclusive to the original inventor.

Case in point: Apple, Microsoft, and 4 other companies formed a coalition to outbid Google in an auction last year for a portfolio of over 4,000 patents belonging to Nortel, a Canadian manufacturer of telecommunications equipment that had gone bankrupt. The patents covered a wide variety of technologies, ranging from smartphone address books to adaptive call forwarding (similar to what Google Voice does). Not surprisingly, Google accused the 6 companies of banding together for the purpose of attacking Android by its winning bid.

The U.S. Department of Justice, even while approving the acquisition of these patents by the “Rockstar Bidco” coalition, acknowledged that these patents could be exploited for anticompetitive means. The Department of Justice noted specifically that “Apple would likely benefit significantly through increased sales of its devices if it could exclude Android-based phones from the market or raise the costs of such phones through IP-licenses or patent litigation.” It should be noted, however, that the DOJ provided a counterbalance in the same filing, announcing its approval of Google’s acquisition of Motorola and its patent portfolio.

Unqualified Judges and Outdated Legal Protocols
A third major flaw in the global patent system lies with the judges who hear the case, and with the outdated legal procedures of many courts that are ill-equipped to deal with modern technological and intellectual property concerns. It seems that few of the judges in the U.S. court system, major international courts such as the ones in Germany and Australia, and the ITC are actually familiar with the underlying technologies being represented in these patent suits. Apple was no doubt counting on this and has profited immensely from it.

A Judge In Over her Head in Australia
Consider a case in which an Australian court granted Apple an injunction against the Samsung Galaxy Tab in part because its “look and feel” bore a close resemblance to Apple’s iPad. Had Justice Anabelle Bennet been qualified to make an adequate ruling on the case (and had Samsung’s attorneys been competent enough to present this evidence), she might have taken a work of “prior art” into account produced by a company called Knight Ridder in 1994. In an old YouTube video, the company (yes, it’s spelled “Ridder”, with two “d”s) envisions a tablet newsreader that bears a striking resemblance to the iPad (or, I should say, the iPad bears a striking resemblance to the tablet envisioned by Knight Ridder).

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The future, as envisioned by Knight Ridder (the newspaper company, not the David Hasselhoff crime drama Knight Rider)

However, even Knight Ridder wasn’t the first to envision a tablet computer. In 1968, the movie 2001: A Space Odyssey contained a clip of two astronauts eating their meals, with tablet computers accompanying their food on the table. Samsung did in fact include this work of prior art in its defense in the United States. Samsung has since sued the Australian Patent Commissioner, claiming that the official’s rulings superseded the office’s authority.

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The future, as envisioned by the movie 2001: A Space Odyssey

A Convenient Choice of Venue in Germany
Consider another case in which a German court granted Apple an injunction against Samsung’s Galaxy Tab 10.1. In this case, the legal intricacies of the German court system weighed heavily in Apple’s favor, as described by Florian Mueller of FOSSpatents (and in this article):

  • Samsung was not present at the hearing in which Apple was granted the injunction, so it could not present arguments in its defense before the injunction was granted. To grant an injunction without even notifying the alleged infringer of the hearing is apparently standard procedure in Germany.

The request for injunction was filed with no notice to Samsung, and the order was issued without any hearing or presentation of evidence from Samsung.

Samsung Electronics
  • In Germany, the only requirement for granting an injunction is to provide proof that the patent was infringed upon. No consideration is given to the fairness or “equity” of granting an injunction, the validity of the patent, or whether the court would be overreaching in granting an injunction. Injunctive relief is considered an absolute right of the patent holder.

Built-in bias towards the plaintiff is another major issue, not only in international courts but also in the United States. Patent courts that inherently lean towards the accuser can cause significant harm to defendants who may not be guilty of infringement in the first place. This doesn’t even take into account the overly vague patents that should never have been granted in the first place, because the patent is often simply accepted at face value. Especially is this so when an injunction granted by a single court in Europe, such as the Düsseldorf district court in Germany, can affect sales of a product throughout the European Union. Apple knew exactly which court to file its injunction request in.

The Düsseldorf district court has a reputation for being our equivalent of the Eastern District of Texas in terms of a strong tendency to favor the interests of right holders over those of alleged infringers. About half of all European (!) patent litigation takes place before that court.

Florian Mueller, FOSSpatents

The Injunction: A Nasty Anticompetitive Patent Weapon
In another article, Mueller ranked the most harmful ways to use software patents, ranking their use to eliminate competition by means of injunctions against the sales of competing products at the top. Apple, of course, has used this weapon to cross over into the realm of hardware, seeking to have Android manufacturers barred from importing or selling their devices based on software features, rather than suing Google itself. Apple accuses Samsung, Motorola, and HTC of infringing upon iOS in their custom skins (TouchWiz, MotoBlur, and Sense respectively), but the features patented are actually a part of Android itself.

There’s only one type of patent holder who would seek injunctive relief without being willing to grant a license on acceptable commercial terms: a strategic patent holder who wants to monopolize a market or maintain a gap between the functionality of their products and those of the competition.

Florian Mueller, FOSSpatents

Judges should be laughing Apple out of the courtroom but many are instead are merely accepting patents at face value and taking Apple’s pathetic arguments seriously, resulting in a global epidemic of hastily granted injunctions. Apple’s strategy involves rushing to the courthouse at the last minute, and pressuring courts to issue preliminary injunctions and temporary restraining orders quickly enough to prevent (or at least postpone) major launches of competing products.

For example, as I stated before, Apple has long been aware of the Galaxy S III and had ample opportunity to file a separate injunction against Samsung to block imports of this device. By leaving as little time as possible for the opposition to mount a defense, Apple is trying to force judges to make hasty decisions based on less than all of the relevant facts. Of course, Apple’s “eleventh-hour” strategy backfired in this case, as U.S. District judge Lucy Koh pushed back, saying “I just don’t have the human bandwidth” to accommodate Apple’s excessive demands.

Apple probably doesn’t expect to ultimately win most of these lawsuits, but its lawyers are keenly aware that the competition would have a strong foothold in the market by the time these lawsuits actually go to trial. On the other hand, if Apple can at least delay a rival product from reaching the hands of impatient customers, they know many of the uninformed among them will actually blame the rival manufacturers for “botched” product launches.

Many customers that would otherwise have gotten a high-end Android device would now get an iPhone to satisfy their demand for instant smartphone gratification. Thus they run to the courthouse just before a major rollout of a major Android device and rush the courts into making hasty pretrial decisions based on the face value of their patents.

Will Google Counterattack?
With the recent patents Google has acquired via its purchase of Motorola, along with its IBM patents and the (pending) notification bar patent, Google has an arsenal of its own that it could use to sue Apple. Alternatively, Google could use its patents as leverage to force Apple to back off from its own lawsuits against Android phone manufacturers. Unfortunately, the manufacturers themselves might not be able to use Google’s patents as a defense against Apple, as HTC recently found out. It should be noted that the HTC case was heard by the ITC and not a traditional court of law, so it remains to be seen if U.S. federal courts will take the same stance.

Nothing New Under the Sun
Apple has time and again exploited flaws in patent systems and courts around the world to try to block competing products (Android in particular) from the market, yet, as I stated in my previous editorial, Apple itself is an avid copier of other companies’ technologies. Not only are the concepts, designs, and technologies Apple has patented not unique to Apple, but most aren’t even unique to the to the companies Apple copied from. Stay tuned for Part 3 of this series, which covers concepts patented by Apple that have existed for decades, centuries, and even millenia.]]>

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