The past year has seen smartphone giants Apple, Motorola, and Samsung spend time, energy, and billions of dollars on intellectual property to gain an edge in the worldwide smartphone market. Patent litigation by Motorola achieved an injunction against Apple’s iCloud service as well as an injunction against the sale of certain iPhone and iPad models in Germany. Apple filed for an injunction of Samsung tablet devices in America, Germany, and South Korea.
The approach towards patent portfolios varies considerably between tech giants. Google, Microsoft, and RIM have taken an acquisition approach. Google acquired Motorola Mobility on May 22, 2012 for $12.5 billion primarily to obtain access to Motorola’s extensive patent portfolio which relates to Android, Google’s mobile OS. In a similar fashion, Microsoft paid $1.1 billion in April for a portfolio of 1100 patents owned by AOL. The latest news on potential acquisitions of RIM attributes a large portion of its value to an extensive patent portfolio.
The other approach to the smartphone patent war uses licensing rather than acquisition. Rather than developing/acquiring a large portfolio of technical patents with which to gain an edge, Apple apparently chooses to license patents from other inventors. For example, the core 3G and 4G technology used in Apple’s iPhone and iPad are licensed from Qualcomm, the largest holder of smartphone-related seminal patents. In order to litigate, Apple develops patents that are focused on the user interface of mobile software. For example, Apple recently won an injunction against Motorola based on the unlock screen on Motorola’s mobile phones.
Although some debate whether the extensive litigation that has ensued in the smartphone arena is a sign that the patent system is failing, it is clear that patents have become valuable weapons in this highly competitive field, a trend that promises to continue. For example, AOL’s patent portfolio sold for nearly four times the industry prediction.
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Summary by: Ramin Wright