Thursday, November 4, 2010

Bizmology

Bizmology

Mobile phone patent disputes heat up

Posted: 04 Nov 2010 01:11 PM PDT

Need cash for R&D? Try suing your competitor.

Patent disputes are nothing new in technology, but the latest battles — particularly in the mobile phone market — indicate they just might be the way to deal a setback to rivals, carve out market dominance, and earn a little cash for developing new products.

“Filing patent suits can increase uncertainty about competitors’ prospects, legal experts say, while helping plaintiffs generate financial returns from their patents,” write Don Clark and Shayndi Raice in The Wall Street Journal. ”Some technology firms have built up patent-licensing businesses — following the lead of companies like International Business Machines Corp. and Qualcomm Inc. — and use lawsuits as a tool to win lucrative settlements.”

In the course of my research for the Telecommunications Equipment Manufacturers industry here at Hoover’s, I discovered that 22 large tech patent suits were filed during the first three months of 2010, more than double the number filed during the same period a year earlier.

Recent skirmishes include Nokia vs. Apple: the former sued over 10 patents it claims were violated by the iPhone; the latter counter-sued over 13 patents it says Nokia infringed. Oracle and Microsoft have sued Google and Motorola, respectively, over Android patents.

Putting the smackdown on your competition while earning a few million extra bucks isn’t the only incentive for big-tech patent suits. “Microsoft has also used patents to barter with other companies for access to their inventions,” write Clark and Raice.

It’s a strange twist to the concept of collaboration, to say the least. With friends like these in the marketplace, who needs enemies?

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Photo by Claudio Gennari, used under a Creative Commons license.
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