Wednesday, 30 May 2012

Tim Cook Thinks U.S. Patent System Is Broken

Often in the tech world it seems that you can hardly go a day without hearing about some new lawsuit where one company is suing another for violating its intellectual property. Whether it’s non-practicing entities (i.e., patent trolls) going after companies like Apple or Microsoft to make a quick buck, or it’s companies like Apple, Samsung, Microsoft, Motorola, or Google going after one another, the patent wars have gotten pretty crazy.

Tim Cook Thinks U.S. Patent System Is Broken
In an interview with Kara Swisher and Walt Mossberg during the opening session of AllThingsD’s D10 Conference, Apple CEO talked at some length about these lawsuits, and expressed some pretty strong opinions. When Swisher asked whether Cook thought patent litigation was a problem for innovation, Cook responded “well, it’s a pain in the ass.”

He went on to echo comments he made during Apple’s quarterly earnings call last month. He stressed his belief that “it’s important that Apple not be the developer for the world.” He went on to draw an analogy between Apple’s innovation and art:

We can’t take all of our energy and all of our care and finish the painting and have someone else put their name on it. We can’t have that. The worst thing in the world that can happen to you if you’re and engineer and you’ve given your life to something is for someone to rip it off and put their name on it. And so what we want to accomplish is that we just want people to invent their own stuff.

Mossberg replied that there are companies that accuse Apple of ripping them off, and have therefore sued Apple. In response, Cook pointed out the difference between ordinary patents and standards essential patents. He said that “the vast majority of those [suits] are over standards essential patents.” A standards essential patent covers anything that is necessary to build a certain kind of product – Cook used the example of a kind of technology that is necessary to access a 3G data network. As Cook pointed out, owners of patents that are considered standards essential are legally obligated to license those patents on fair, reasonable, and non-discriminatory (FRAND) terms.

Companies that refuse to do so, Cook said, are basically trying to cash in: “they’re in essence telling you that they’re not going to license it because they want to go get an injunction.” Cook called the use of standards essential patents in litigation “an area where the patent system is broken today.” The suits that certain companies (Cook avoided using names, though Motorola is notorious for this) file over standards essential patents represent an attempt, Cook said, to use the court system “in a way that it wasn’t intended.”

He went on to say that Apple does not file lawsuits over the standards-essential patents it owns, “because we view that it’s fundamentally wrong to do that.” Such suits, he said, were “never the intention of a standards essential patent.”

Getting back to the original question of whether patent litigation is a problem for innovation, Cook said that it “is maddening, it’s a waste, it’s a time suck. However, does it stop innovation? It’s not going to stop us.” Cook concluded by expressing hope that “some of the regulators and so forth will charge at this and begin to fix it.”

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