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Smartphone patent fight: 'World War III'

Matt Hamblen | May 5, 2011
Smartphone-related patent infringement lawsuits Apple and Samsung recently filed against each other are but the latest in an escalating series of Android and open-source-related complaints filed by major corporations over the past 18 months.

Some of the patent claims in the smartphone cases have been derided, even by insiders, as somewhat specious.

"These claims are all about competing companies wanting to get a piece of the [smartphone revenue] pie, although I do see some of the claims that are eye-opening, to say the least," remarked Mitchell Stein, an intellectual property litigator at Silver Freedman in Los Angeles.

"One claim that killed me was that Apple sued Amazon over Amazon's Android store, which is called the Amazon Appstore," he added, noting that Apple's is called the App Store. "So, Apple thinks Amazon can't call its store an 'appstore'? That shows how creative and aggressive some of these companies are in this field, with all the money being made."

Enter the patent trolls

Several of the smartphone cases were filed by a number of so-called nonpracticing entities, such as NTP, which have purchased or gained rights to enormous numbers of patents.

While it may sound derisive, these companies are widely referred to by patent insiders as "patent trolls," a term that goes back nearly 20 years. The term has lost much of its pejorative value in recent years as such trolls have become useful to just about any company trying to defend itself in a patent suit.

NTP became famous for winning $612.5 million from RIM in March 2006 in a settlement of a patent dispute that lasted four years. In July 2010, NTP also filed smartphone patent infringement claims against Apple, Google, LG, Motorola, Microsoft and HTC.

NTP co-founder Donald Stoute claimed that use of its intellectual property without a license is "just plain unfair to NTP and its licensees," a group that now includes Nokia and, ironically, RIM.

"You will see smartphone competitors sue for the next couple of years, but the suits by the nonpracticing entities, the trolls, will drag on for a while as they go after Apple and all the handset makers," noted patent attorney Greg Bishop of Goodwin Procter in Menlo Park, Calif. "That's where the biggest money is."

In a sense, the patent troll tradition has given birth to newer, more respectable gambits where companies like Intellectual Ventures collect patents and give a variety of vendors the right to license those patents, thereby creating a kind of patent licensee collective, Bishop said.

"That big portfolio of patents adds to the inability of one player to dominate the patent arena," Bishop said.

Michael Specht and Glenn Perry, patent attorneys at Sterne Kessler Goldstein, noted in a recent article that HTC and Samsung recently licensed the 30,000-patent portfolio of Intellectual Ventures to protect themselves against smartphone suits filed by Apple and others. The moves are apparently intended to generate a legal debate over who owns what smartphone intellectual property rights.


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