Analysis: Legal fights over patents in the mobile handset industry are big business – but might peace break out?
The ending of hostilities in the Ericsson-Apple patent dispute concludes a year in which most major players in the smartphone industry have been embroiled in patent battles.
In early December, Samsung agreed to pay Apple $548m in damages over complaints that Samsung had copied the iPhone.
September saw Microsoft and Google signing an agreement to resolve around 20 lawsuits in the US and elsewhere, prompted by Google’s retaining of the patents of Motorola Mobility, which it acquired and then sold to Lenovo. Microsoft also sued Japan-based Kyocera in March.
In July Google, Facebook, Dell, HP, eBay and others submitted a statement to the US Federal Circuit Court of Appeals supporting Samsung against Apple, arguing that this kind of litigation was damaging the industry.
Could it be the case that patents are currently hindering progress rather than fulfilling their agreed purpose – to enable innovation by ensuring that the innovator will be the one that benefits?
"Patents are often used to try and limit innovation rather than protect innovation," says Rob Bamforth, Principal Analyst at Quocirca.
Bamforth questions the utility of companies battling over technology that is not a differentiator.
"Where the innovation should be is being disregarded. They should be standardising on, for example, connectors on phones. It’s not a competitive advantage, just a way of applying control.
"Tech companies used to battle over proprietary technology.
"Now we’ve levelled the playing field and opened so many areas, the battlegrounds have changed. But it has not moved into that much agreement over layers of standards."
He adds that "it’s very difficult for penalties to be sufficient to discourage infringement.
"In such a fast-moving market, often you can get ahead by just [releasing the product] rather than worrying about the detail."
Key to the protection of innovation is fair, reasonable, and non-discriminatory terms, or FRAND. This requires companies involved in creating industry standards to license the patents at a reasonable rate.
In the Google-Microsoft case mentioned above, Google was effectively fined for breaching this obligation.
The resolution of the Ericsson-Apple case, however, does suggest that the companies involved are attempting to facilitate real innovation.
As well as a sizeable pay-out by Apple to Ericsson, the two companies have created a blueprint for collaborating in the future on technologies such as "next generation 5G cellular standards, the optimisation of existing wireless networks for the benefit of operators and users worldwide, and video traffic optimisation," according to a statement from Ericsson.
Google and Microsoft also separately agreed to collaborate on patent matters and work together in other matters on future.
The Apple-Ericsson case may have other lessons for the industry. Rebecca Halford-Harrison, IP & Technology Disputes Partner at Kemp Little, argues that the Ericsson case provides a successful model for how to pursue a patent claim.
"Ericsson has put together a proper strategy and chosen what it is going to pursue. It is quite a strategic approach.
"The lesson is that considered patent litigation is one tool to create value in the underlying portfolio."
She advises companies to "approach it as they would a commercial transaction and come at it with clear objectives."