In fact, the verdict is a sign that the system is far from being broken and is actually working as intended to help ensure innovation and competition for the benefit of consumers.
First, some have put forward the idea that a company like Apple shouldn’t be able to use patents to get an advantage on the competition. This might makes sense to some at first blush. However, the patent system was designed precisely to encourage companies like Apple to make significant investments in research and development. The efforts themselves create jobs and stimulate the economy. Obviously, Apple hopes that its huge investment will result in products that drive the next generation of communicating and computing devices. But the risks are huge and without the benefits of patent protection, few companies would engage in such costly and uncertain endeavors.
Second, some claim that a single company should not be able to hold exclusive rights to the most popular technologies. They argue that people gravitate toward one solution to a particular problem, and any company should be permitted to avail itself of that solution. Again, this idea would only serve to hamper innovation. A company – like Apple – should not lose its rights to differentiate its product because others choose to copy its features and make them ubiquitous. Instead, the patent system inspires companies to find new, better ways to please consumers and get the exclusive, enviable rights to their own work.
Samsung has over 50,000 employees in research and development alone in over 42 facilities around the world. According to Samsung’s website “they collaborate on strategic technologies for the future and original technologies designed to forge new market trends and set new standards for excellence.” And this year Samsung had churned out enough phones from its factories to sell over 93 million – in a single quarter. If any company is poised to design consumer electronics with a fresh look and feel and get them in consumer hands quickly, it’s Samsung. And when it does, its new iPhone-alternative will create more competition and push down prices for everyone.
The winners in this scenario wouldn’t just be Samsung. Economies around the world in need of an economic boost will benefit as Samsung and its suppliers will need to hire even more people to research, develop, manufacture, box, ship, market, and sell its new, innovative products – much like the economic boost Apple has spurred in recent years.
Finally, it’s important to understand that patent litigation is not new and often follows periods of robust innovation. Many different companies spent time developing technologies related to voice calls, e-mail, video, music, security, and browsing – and all of these technologies are now in a single device. History tells us that litigation ultimately provides clarity in times like these by sorting out who has proprietary rights to specific pieces. This clarity often leads to broad licensing agreements that allow competitors to use each other’s inventions while protecting the incentive to innovate. Most innovation builds on what came before; however, the responsible approach is to license those prior inventions and then build on top of them.
This doesn’t mean our system is perfect. Higher quality patents are needed. Applicants need to more clearly define and claim their inventions. And the USPTO needs more resources to provide a better search and examination.
But these needs are a far cry from the drastic measures some are calling for.
Watching lengthy interviews of the jury foreman explain the painstaking process and debate that led to the decision, it’s clear the judge and jury weighed this case carefully. And as Samsung pointed out when it lost, the jury’s verdict was one step in a larger process – there were many steps before the verdict and there will be many after it. Far from a system that’s broken, last weeks’ decision was a rational step in a well-planned process meant to secure an advantage for those large and small who have great ideas and achieve them. It could help lead to economic growth. And it even just might be the spark that creates the next revolutionary product.
Stoll is a partner in the intellectual property group at Drinker Biddle & Reath where he focuses on complex patent issues. He retired from the USPTO at the end of 2011 after a career that spanned the ranks from an examiner to his most recent position, Commissioner for Patents.