Technology lawsuits have already removed one tablet from Aussie stores and could claim more, writes
Welcome to the copy-cat war.
BY all reports, Samsung’s third tablet computer is its best. The Galaxy Tab 10.1 has a powerful processor, fresh Google software and is thinner and lighter than its major competitor.
Although the tablet is on sale around the world, it is banned from Australian stores, held up by an injunction granted over claims it looks too similar to the Apple iPad.
The ban has made the Galaxy Tab 10.1 a tangible victim of a billion-dollar industrywide legal war.
Smartphone leaders including Apple, HTC, Samsung, Motorola, Nokia and RIM are suing and countersuing one another over patents, or exclusive rights to innovations, in what has become a spaghetti junction of lawsuits.
Keeping track of the smartphone stoushes is tricky. Recently, HTC sought to block Apple iPhone, iPad and Mac imports in the US over three patents, Samsung overturned its tablet-selling injunction in some European countries and Sony and LG settled patent disputes against each other.
ANU College of Law senior lecturer Matthew Rimmer says it is proof the patent system is out of control and creating technological ‘‘ gridlock’’.
‘‘ It’s mutually assured destruction if these holders of patent portfolios decide to keep suing one another.
‘‘ It’s not like one company will come out the victor,’’ he says.
Rimmer says the legal war began after courts started approving patents on software in the 1980s. These exclusive licences were granted for 20 years at a time. Big companies have since sought to accrue large portfolios of patents to charge rivals for their use, while some individual patent holders have used these licences to ‘‘ hold companies to ransom’’.
‘‘ Creating a phone involves hundreds of functions and hundreds of patents and if someone has just one patent they can stop the whole phone from coming out,’’ Rimmer says.
COMPANY V COMPANY
The legal war has inspired a spending spree by smartphone firms, with Google offering $ US12.5 billion for Motorola Mobility, not for its phones but its patents. The 80-yearold company that created the first mobile phone has more than 17,000 patents and 7500 more pending approval.
By comparison, Google has only 317 patents and applications, according to bankers MDB Capital Group.
The offer follows Google’s purchase of more than 1000 IBM patents and after a consortium including Apple, Microsoft and RIM bought 6500 Nortel patents for $ US4.5 billion. Google chief legal officer David Drummond alleges this consortium bought the patents so it could then claim a $ US15 fee on every Google Android smartphone sold.
‘‘ A smartphone might involve as many as 250,000 [ largely questionable] patent claims and our competitors want to impose a tax for these dubious patents that makes Android devices more expensive for consumers,’’ he says.
‘‘ They want to make it harder for manufacturers to sell Android devices.’’
Telsyte principal researcher Foad Fadaghi says the future of the smartphone market could hinge on these lawsuits and Google’s purchase is an attempt to protect its leading position.
‘‘ It’s a shame because the market was about technology and products and now it’s becoming about patents and litigation and having a defensive position,’’ he says.
Chief executive Larry Page says even under Google’s umbrella, Motorola will operate as a separate entity, telling analysts the company would continue to work with hardware partners such as HTC, Samsung and Sony Ericsson ‘‘ on an equal basis’’.
But Fadaghi is more sceptical, predicting Google’s stakeholders will demand joint Motorola-Google products to take advantage of the new asset.
‘‘ Time will tell but one would assume that shareholders and the market will be demanding a product from Google that more closely rivals its biggest competitor [ the Apple iPhone], which is more easily done with a single manufacturer,’’ he says.
As for the legal war, Fadaghi predicts more acquisitions.