The pharmacist Sir Alexander Fleming is revered not just because of his discovery of penicillin – the antibiotic that has saved millions of lives – but also due to his efforts to ensure that it was freely available to as much of the world’s population as possible. Fleming could have become a hugely wealthy man if he had decided to control and license the substance, but he understood that penicillin’s potential to overcome diseases such as syphilis, gangrene and tuberculosis meant it had to be released into the world to serve the greater good. On the eve of World War II, he transferred the patents to the US and UK governments, which were able to mass-produce penicillin in time to treat many of the wounded in that war. It has saved many millions of lives since.
Now, I’m not suggesting for a minute that tech firms are currently sitting on anything as important as penicillin (obviously). Nor am I am saying that technology patent-holders have a public duty to act in such an altruistic manner. But it’s fair to say that the patents ‘cold war’ that is currently engulfing the technology world has the potential to become highly damaging to all. And, unlike Sir Alexander Fleming, the protagonists appear unable to look beyond the short term material gain to see the bigger picture.
Patent disputes within the mobile industry are nothing new. Nokia and Qualcomm spent the best part of the last decade squabbling in the courts, spending millions of dollars on lawyers before reaching an out-of-court settlement. But the advancements in smartphone technology over recent years, alongside the arrival into the market of major new players such as Apple and Google, have seen the industry once again head for the courts. Apple v HTC and Google v Oracle are just two of the many smartphone-related disputes currently keeping the legal profession in fine wine and expensive cigars.
The eye-watering US$4.5 billion paid for Nortel’s patent portfolio last month – won by a consortium bankrolled by Apple – shows just how high the stakes now are. The new players may be leading the market but they haven’t been around long enough to control the key patents that make their products possible – but they’ve got deep enough pockets to pay for what they need. This scenario has seen the industry’s traditional players rush to see what they have in their locker; there are signs that both Nokia and Motorola, for example, are currently rummaging around to see what they can license to larger rivals. Here are two firms that used to be about making phones, but are now set on making it more expensive for other people to make phones. Depressing huh?
There is already evidence that the patent war is having a damaging effect on the industry. Take Google’s Android platform, for example. Its underlying principal has been open source and free-to-use. Not anymore. Now that Microsoft has sent its lawyers after Android vendors such as HTC and Samsung – and reportedly succeeded in extracting a royalty out of each – there is now a very definite cost involved in using the platform. If rumours are to be believed, Microsoft now stands to make more money from Android than via its own Windows Phone platform, which is a perfect example of how ridiculous the situation is becoming.
Look also at what’s happening in the apps space. Legal moves initiated by companies you’ve never heard of – “patent holding” firms such as Lodsys and MacroSolve – represent a serious threat to growth and innovation in the sector. By going after developers, rather than the big firms that build the devices and the platform (and have the means to defend themselves), they have put the wind up the very people who are driving the market forward. As one developer told The Guardian this month, it is now “far too dangerous” to do business in the US, with another arguing that “selling software in the US has already reached the non-viable tipping point.”
It is, of course, entirely right that companies that have invested millions in mobile R&D over the years should be compensated when others use their technology, assuming that the arrangement is “fair and reasonable” for both parties. But the current in-balance within the industry between those that control the crucial patents and those that don’t is having a distorting and damaging impact on the market right now. The best hope is that things eventually even themselves out; once everyone is suing everyone else, then (hopefully) some sensible compromises will be found. But that could be a long way off.
It’s enough to make you reach for the penicillin.
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members