Smartphone industries case study, when software patents become advanced in this generation
Software patents, considered to be a red ocean industry from my point of view, involve different fields of companies. Right now, almost everyone in the world has smartphones; depended on brand loyalty and individual preferences, people have smartphones as their indispensable object, tool, or somehow part of livings. The case study mentioned Apple, RIM (Blackberry), Samsung, and Nokia from smartphones companies. The InterDigital company — a technology research and development company that provides wireless and video technologies for mobile devices, networks, and services worldwide — develops technology for Apple and RIM, moreover, they have got patent-licensing agreements for keeping a contract too. The result turned out well by Apple achieved in containing 200 patents — relating to iPhone only — and gained $20 million from the license. RIM also seemed to be satisfactory in the InterDigital contract agreement and just extended the license agreement not very long ago.
Seems like a bitter-sweet story for Apple and RIM, but when the third wheel company got involved, making this story was not a good happy ending as it thought. NTP — the patent-holding company — decided to field a complaint to RIM that the company has been alleging patent infringement and requesting Apple and RIM to negotiate an agreement to license NTP’s technology. The winners of this study case, so obvious and distinguish, are patent tech companies like InterDigital, NTP, and Qualcomm (a grubby patent troll) by obtaining advantages from this red ocean in a competitive market and a large number of big players. The losers would be companies like Apple, RIM, and other high players of smartphones companies, however, Samsung has to be admitted being the saddest company by refused to negotiate a patent-license agreement with InterDigital company, causing loss at an estimated cost of $400-$500 million when InterDigital field a patent lawsuit to Samsung.
This case study shows that there is a huge amount of money streaming through this red ocean currently. In 2020, the global software market is estimated to be around $400–$500 billion, having new players in the technological development field day and night makes this competition become fierce and captivates the latest companies. Despite the high expected return on investment, the costs of software patents can vary significantly depending on the complexity of the invention and the law firm responsible for patents. Also, when we think about it, software patents are considered to be harmful. They are vague in terms of what is actually invented, can be passed along as property, and the most dangerous view is that whoever can sue for infringement without making the product to which the patent applies.
As mentioned earlier, the word “grubby patent troll” refers to a company that doesn’t really make a tangible product at all. This patent troll builds up a folder of patents for their clients’ companies and hires some lawyers, trying to apply those patents to products made by software developers in the actual market. In many ways, the business of being a patent troll is much like an illegal protection racket. The patent troll can sue many companies, moreover, if those companies aren’t lucky enough, they can’t hire or maybe afford some lawyers to defend them and there are also other risks that the case might be defeated in an actual court. This ends up with a waste of time and money for defendants.
In my conclusion, software patents can secure other businesses from using the companies’ software and provide a competitive advantage in this new rapidly changing world. But, the companies have to assure that they have enough knowledge and budgets in case of litigation that must involve lawyers.