Tuesday, November 15, 2011

Growing fears of a bubble in the market for patents

The proliferation of court fights between companies for alleged patent infringement, purchases of companies whose most valued asset is the portfolio of patents or the acquisition of patents millionaires packages are justifying a company that many analysts start talking about the existence of a bubble in the market for patents. And more specifically on the planet of mobile telephony.

The launch of Google's mobile operating system open source, Android, and its success has been accompanied by increasing legal conflicts. Apple, a case is pursued in court phone manufacturers using Android on the grounds that it violates patents owned. In fact, Google has made ​​purchases defensive patents to protect this fence judicial Android. In just three months has purchased two packages of a thousand patents each in IBM . And the purchase of Motorola Mobility can also be explained because it is with the 17,000 patents for this manufacturer. They are his response to consortium created by Apple, Microsoft, Sony and RIM to acquire, for about 3,100 million euros, 6,000 patents auctioned by the Canadian company Nortel, which filed for bankruptcy in 2009. Intel also bid for them without achieving their goal. After learning of this operation, Google reported it considering it a "hostile campaign" against Android to be excluded from the consortium. Microsoft said that Google had offered to enter the same, an offer rejected the company's search engine.

Microsoft, through patents, Android is making money. Windows firm has reached agreements with several manufacturers using Google's operating system, such as Samsung, to get paid a certain amount of money per unit sold of these phones. Microsoft argues successfully that there are lines of code in Android that violate its patents. Google has had to stand up for some of these manufacturers like HTC, transferring patents.

The episodes are almost endless. Comes Carles, patent expert engineer, the price that a patent is worth the price at which someone is willing to buy it. Comes requires a fundamental difference in this market, including patents related to a standard, such as MP3, and those that are not. In the first case, the legislation of many countries, the owner is required to license it and if no agreement on price can intervene on an authority to arbitrate the dispute. In the second, the owner is free to retain

What has changed, according to Comes, is the use of patents. When the owner is a manufacturer of devices, and not a company dedicated solely to trade with them, which is looking to differentiate their own products rather than make money from their sale. Another use is to protect the products against a claim by a third. Patents have always provided a negotiation, "sticker exchange." Comes not fair to talk of a bubble.

Moreover, the legal differences between the U.S. and Europe on this topic have nuanced. It is no longer true that U.S. software can be patented only unconditionally and in Europe is not patentable, Comes said. United States now requires that the program will associated with a machine or involves a transformation. In Europe can be patented if it has a technical character and gives a solution to a problem. A file compression program or encryption can be patented in Europe.

Florian Mueller believes that there is no objective mathematical formula to calculate the fair price of a patent. Mueller, a consultant in this area, maintains the blog Foss Patents, which has become a reference in international news. Mueller also distinguishes the problem of patents related to a standard and which are not. In the first case can not be used as a weapon to prevent others from obtaining a license. The only thing to discuss is the price, and even at this point could come if the authorities to monitor the conditions imposed by the patent holder violates antitrust law. If no patents, Mueller said that the business is similar to the film. "There are many movies, but few blockbusters. The patent agencies that validate only spend 10 or 15 hours to study. Its adoption, therefore, is fragile and can be subjected to legal disputes. A patent has overcome several assaults against their validation is a strong patent and may have a much higher price to another patent has spent only formal validation of an agency. "

For Mueller, Apple battles are not intended to do business with the sale of licenses. "Apple wants the patents to differentiate their products and do not want to license it to anyone." Said expert believes the patent litigation in the mobile technology is very complex because they hold different companies and is very laborious to determine who contributed what and novelty. For the purchase of Nortel patents, Mueller said that there is a circumstance favorable to buyers. Being a company that is no longer active, the companies that bought them are not required to meet the commitments of Nortel.


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