Some critics say the US patent system is in the midst of an lively battle, or patent conflict. We’re listening to of 1 notably egregious offender: normal important patents for smartphones.
But empirical knowledge on patent litigation doesn’t assist this narrative. Actually, it flatly contradicts it. Smartphone patents and SEPs are to not blame for the traditionally modest quantity of patent litigation occurring within the US.
There’s room to reground the dialog on the state of patent litigation within the smartphone {industry} by specializing in the info, somewhat than hyperbolic anecdotes, to disclose what the smartphone patent conflict alarmists are lacking.
Decreased Litigation
To know the extent of patent litigation within the smartphone {industry}, we examined the most important cellular wi-fi system suppliers, which we outlined as smartphone authentic tools producers with over 5 million shipments in not less than one yr between 2005 and 2020. There are 53 such OEMs.
Subsequent, we reviewed patent litigation in each US federal district courts and the Worldwide Commerce Fee, occurring amongst these main smartphone corporations, discovering 85 circumstances involving 321 distinctive patents.
This novel knowledge set exhibits the variety of smartphone patent lawsuits between 2005 and 2020—when normalized to the scale of the smartphone market— is definitely declining.
Credit score: Cravath, Swaine & Moore and Qualcomm
Subsequent, we normalized by each the variety of US smartphone shipments and the overall greenback quantity of US smartphone gross sales. In each circumstances, the normalized patent litigation charge exhibits that smartphone patent litigation has truly decreased since its peak in 2005.
In different phrases, the present complete smartphone patent litigation docket is smaller in proportion to the scale of the smartphone market than it was in 2005.
Moreover, smartphone patent litigation includes lower than 0.5% of all patent circumstances—on the peak of smartphone patent litigation, there have been solely 20 smartphone patent circumstances amongst nearly 4,000 complete patent circumstances.
By comparability, biotechnology and biopharmaceutical circumstances account for almost 15% of the overall US patent docket. To make use of the nomenclature of critics, any perceived patent conflict within the smartphone {industry} is considerably deescalating, not escalating.
We additionally should take into account that individuals within the smartphone {industry} usually are not monolithic, and the patent litigation that does exist within the {industry} is basically confined to a couple market individuals.
For instance, smartphone patent litigation spikes in 2010-2012 and 2016 will be attributed overwhelmingly to Apple. Of the 58 complete circumstances occurring in these time intervals, Apple was concerned, as both plaintiff or defendant, in 37 (or 63.8%) of those circumstances.
Apple’s outsized position in smartphone patent litigation is unsurprising given its enterprise technique has most popular litigation over licensing.
Boris Teksler, former head of patent licensing at Apple, defined in The Economist that “environment friendly infringement, the place the advantages outweigh the authorized prices of defending towards a swimsuit, may nearly be considered as a ‘fiduciary duty,’ not less than for cash-rich companies [such as Apple] that may afford to litigate with out finish.”
Credit score: Cravath, Swaine & Moore and Qualcomm
SEPs Not Accountable
On the middle of the overhyped debates are SEPs, which defend know-how that normal improvement organizations have deemed important to an industry-adopted technical normal. In accordance with critics, SEPs are a root reason for, and probably the most devastating weapons utilized in, smartphone patent wars.
Critics declare that SEP homeowners abuse SEPs, referring to this theoretical danger as patent “holdup”: the chance that the SEP proprietor coercively calls for—underneath risk of a damages declare or an injunction—an unjustifiably excessive royalty charge from implementers searching for to make use of the {industry} normal.
Nonetheless, the bulk (53%) of smartphone patent litigation circumstances didn’t contain any SEPs. Furthermore, of the 321 distinctive patents concerned in smartphone litigation, solely 115 (or 36%) have been SEPs. Plainly, SEPs usually are not the driving drive behind smartphone patent litigation, as they don’t seem to be even asserted typically.
Credit score: Cravath, Swaine & Moore and Qualcomm
Conclusion
For years, critics have warned that so-called patent wars are engulfing American innovation and particularly the smartphone {industry}. These critics have misinterpreted or ignored the empirical knowledge, which paints a starkly totally different image.
It’s excessive time our science-based coverage returns to discounting non-factual rhetoric, and as a substitute takes heed of information and knowledge. Let’s take a primary step in direction of this by calling out smartphone patent conflict rhetoric for what it’s: patently fearmongering.
This text doesn’t essentially replicate the opinion of Bloomberg Trade Group, Inc., the writer of Bloomberg Legislation and Bloomberg Tax, or its homeowners.
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Creator Info
David J. Kappos is a companion within the company division of Cravath, Swaine & Moore. Beforehand, Kappos served as Underneath Secretary of Commerce and Director of the US Patent and Trademark Workplace.
Kirti Gupta is vice chairman and chief economist at Qualcomm and senior adviser at Heart for Strategic and Worldwide Research.
