US Congress Mulls Broken Patent System; Rethinks Sales Bans on Infringing Patents

Discussion in 'Android Tablet News' started by dgstorm, Jul 12, 2012.

  1. dgstorm

    dgstorm Editor in Chief Staff Member

    Jan 5, 2011
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    The United States Congress may finally wade into the deep waters of the broken U.S. patent system. Yesterday, Congress began discussions regarding the ramifications of sales bans on patent infringing products, and are considering reducing/eliminating them. They are trying to determine what can be done to limit or stop rival companies from banning the importation of competitors products because they infringe on controlled patents. Sen. Patrick Leahy (D-VT), Judiciary Committee Chairman, contacted representatives of the Federal Trade Commission and Department of Justice for the hearing. Leahy announced that the goal is to "further explore the competitive impact of ITC exclusion orders and whether more needs to be done to ensure consumers are not the victims of the tech patent wars."

    Don't get too excited yet though. At first, this may not make much of a difference for Google and it's OEMs, and in fact may hurt them. It's ironic really, but the reason why Congress is looking at this isn't because of the oppressive legal nature of Apple and Microsoft, but is actually because Motorola is attempting to ban the sales of the XBOX 360 and the iPhone because they infringe upon some of Motorola's FRAND (fair, reasonable, and non-discriminatory terms) patents. In his statement, Leahy specifically identifies the Xbox and iPhone. The hearing was called while the ITC is currently deciding whether to stop imports of these products because of standards-essential patents owned by the Google-owned Motorola Mobility.

    The difference between Motorola's import sales ban request at the ITC against Apple and Microsoft, and the import sales bans that Apple is levying against Samsung is that the patents that Samsung is supposedly infringing are non-industry-standard patents. The patents that Motorola is calling Apple and Microsoft out on are FRAND or standards-essential patents (SEP). There are loose terms defined for SEP that basically make it a requirement for companies to allow use for and/or license with fees their SEP patents, but the problem is that a FRAND/SEP patent compared to a non-industry-standard patent has not been properly defined. In this instance, Motorola required Microsoft to pay royalties of 2.25 percent of the retail price of each Xbox 360 to use Motorola's WiFi and video streaming patents. Normally a company will instead apply that percentage to the portion/part of the device that uses the infringing technologies. Microsoft scoffed at this and refused; now Motorola requested a sales ban on the XBOX 360.

    In fact, the FTC is currently investigating this issue now as well. Here is a quote with the details,

    This viewpoint is valid, because tech companies must build products that comply with industry standards in order to compete, and they shouldn't have to face import bans when patent holders ask for unreasonable amounts of money.

    Still, the only reason that Motorola has taken this approach at all is because they are trying to fight back in a patent war that they didn't start. It's possible that this was a strategic move on Motorola's part designed to get this ball rolling to begin with. Maybe Motorola started making unreasonable demands on purpose in order to finally focus attention on the broken patent system, (although this is purely speculation). It also could simply have been a purely defensive move of desperation.

    Regardless if that was their intent, it could have that effect in the long run. Senator Leahy seems to be taking a reasonable point-of-view on this. Here are a couple of quotes from the Arstechnica article with his perspective,

    He also added,

    This seems to leave the door open a little bit to fixing everything in the future. In the mean-time, if Congress does get involved, it will probably drag things out even further and involve passing some sort of legislation to help standardize the industry and give the ITC broader scope. It doesn't look like anything will be accomplished yet to abate the legal violence of the patent wars, but at least steps are being taken in the right direction.

    Sidenote: It's almost comical that the reason the broken patent system is finally getting the attention it deserves is because of a gaming console. Fictional headline: "Broken U.S. Patent System Saved by XBOX!" :)

    Source: ArsTechnica and Reuters and TheRegister

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