Patent bullying hurts innovation
By Kim Yoo-chul
Global patent pool companies should not use patents as weapons to attack their counterparts because such moves can hurt innovation, according to market experts.
Patent bullying has emerged as the major headache for information technology industries. Simply put, a firm that is strong in terms of patent portfolio is inclined to abuse market power by asking third-parties to pay more royalties.
``A concern with patent pools is that they might include some patents in the pool that are not necessary. Even worse, they might include expired patents,’’ said Michael A. Carrier, the chairman of the Executive Committee of the Antitrust and Economic Regulation section of the Association of American Law Schools (AALS), via email, Monday.
``By themselves, the owner of these patents couldn’t force a licensee to take them since they’re expired. But in a pool, they could be combined with other needed patents. The result of this could be harm to consumers and innovation,’’ stressed Carrier, who is also a leading authority in patent and anti-trust in the United States.
In the 21st century, whenever a company like Samsung Electronics, Apple or even Motorola Mobility introduces a new Web-enabled mobile device such as a smartphone or tablet, it risks losing billions in lawsuits as it may be infringing on another firm’s patents or intellectual property.
Amid the blurring lines between hardware and software, patents pull a high-price tag.
There is more patent trolling in technology industries as patents are recognized as a weapon to strengthen a company’s bottom-line by just paying some commission to lawyers.
``The practice of hoarding patents is bad because it restricts competition and general consumers need to pay more resulting from what I want to call patent bullying,’’ said a senior official from the Korea Intellectual Property Protection Association (KIPPA) by telephone.
Samsung Electronics and LG Electronics will soon have to renew their licensing agreements with MPEG-LA, a patent pool firm that manages most video- and audio-related patents on behalf of several dozen industry players.
Representatives from the Korean companies declined to give any specific details about their respective licensing negotiations with the company, though they have admitted that they will start talks soon.
MPEG-LA is becoming a patent troll, according to some patent experts.
They said that the organization is ready to charge the Korean firms more royalties despite the fact that video and audio functions are already common and nothing new in today’s tablets and smartphones.
``From a legal perspective, Apple’s design-related patents are in doubt. That means Apple is trying to abuse its market power. Another controversy is MPEG-LA’s licensing rates make no significant changes even as the patents that offer the protection and right to license near expiration or have already expired,’’ said Lee Chang-hoon, a patent attorney at top-rated local law firm Aju Yanghun.
``MPEG-LA’s patents are widely used in most handsets and digital TVs. As their video- and audio-related patents are becoming standardized formats, the failure of these licensing fees to lower will cause a hike in prices and innovation will slow down, which I believe is truly bad for consumers,’’ said Lee.
Last week, Google signed the same standard license agreement with MPEG-LA for hundreds of other video- and audio-related licenses, said German-based patent expert Florian Mueller on his popular FossPatents blog.