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A recent update in the mobile phone sector: Samsung, one of the biggest Android phone device makers, criticizes the Google management of the IP problems with Android saying that they know they can’t rely on Google. Samsung wonders if the takeover of Motorola will help Android manufacturers.
It’s why they made an agreement with Windows “to settle their dispute over software patents in the Android operating system” (1). For each phone running Android, Samsung will pay royalties to… Microsoft. It is a good compromise for Samsung which avoids going to court thanks to “the cross-licensing of [their] respective patent portfolios” (2).
Samsung also agreed to make further investments into Windows Phone 7. This is not the first shot for Microsoft which achieves its eight agreements with Android phone makers (3). Motorola is the only company in the US that hasn’t made such a deal yet. Microsoft earns more money through Android than through Windows Phone 7 and has clearly won some points in this patents war.
(1) http://thenextweb.com/google/2011/09/29/samsung-we-can%E2%80%99t-rely-on-google-so-we-addressed-android-ip-issues-on-our-own/
(2) http://www.ipwire.com/ip-deals-and-opinion/microsoft-and-samsung-extend-ip-and-cross-licensing-partnership.html
(3) http://www.managingip.com/Article/2908777/Managing-Patents-Archive/Microsoft-and-Samsung-strike-patent-deal.html
Yes, this is a useful update on the patent wars and strategies in the mobile phone sector.
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1. Google acquired Motorola Mobility for different reasons.
First of all, it will help Google grow and enter new markets. Indeed, the Internet Giant has always been focused on a specific area and would like to become more diverse. Google will consequently become involved in the Mobility and in the TV industry, Besides, Google, while buying Motorola, steps further in its attempt to unseat Apple.
Moreover, Google will gain a portofolio of 17,000 patents and 7,000 patents pending. Google will consequently be stronger and able to control the market of the new genertion of smartphones. It will be the absolute leader in this new market and be able to design and devellop this new smartphones as it wishes to, with the legal warrranty to be the only one developping this technology.
Having gained those patents, Google will be better armed to face its opponents in future legal battles. Patents are a very efficient weapon against antitrust behaviours. It is consequently a good defensive move against Apple, Microsoft and Oracl in the patents war.
2 . The acquisition of Motorola Mobility by Google reveals that the patent system today has been stifling innovation rather than encouraging it. Why? Because American public companies more and more suit each other for IP litigations. A study of 2008 found out that the costs of those litigations were far larger than the american public companies’ total profit from patents. Since Google has been defeated in a recent auction of patents (belonging to Nortel), it wants to bolster its arsenal of patents by acquiring Motorola Mobility which will procure him 17,000 new patents, with another 7500 in the pipeline. Indeed, this will strenghten its position in current and future legal battles. This acquisition thus showed that Google is , like many other companies, involved in a lot of lawsuits and that to make its innovation possible without being hampered by endless and costly lawsuits , it has to buy the patents of other companies.
3. The Economist sounds quite negative on the American patent system. We will identify and criticize the arguments.
The first problem that is pointed out by the Economist is that the terms for patents are too homogenous. There is no difference between patents in a swift-mooving industry and in a industry characterized by stagnation. It is a real problem and we should promote differenciated terms; a shorter term in fields where innovation mooves fast and a longer term in fields where it is slower and more expensive.
The second problem is that all industry are under the same patent system. We should definitely try to differenciate the system among industries. Indeed patent-holders have different even competing interests.
The Economist is definitely right on these two elements . We are currently in an over-simplifaction of the system. We should definitely try to devellop legal categories. The American system is based on case law, However developping such categories in an organic whole may be quite difficult to do in court ( especially in such a big country as the US). The solution to that problem may consequently be to adopt a uniform code on the matter as they did in other areas.
The third problem is that the bar for obtaining a patent is too low. The Economist suggests to move to higher bars. We don’t agree with this statement. We think that it will discriminate against small firms or individuals having great ideas and discovering new technologies. They will be unable to get their discoveries patented. It will also give more power to the industry’s giants. There is according to us a risk to create some kind of a “patent oligopply” with some huge companies owning all patents.
The fourth problem is that the process of reevaluating bad patents is obscur an almost in-existent. It is, according to us, an important process. We are convinced that it should be more open and efficient. In order to reach efficiency, the US should improve transparency and make the patent system more accessible.
The last problem is that there is no specialsed court system for patents. IP law is a very complex an abstract branch of law. We definitely need skilled judges and juries. It is quite difficult for a lay man to understand those issues.We will only reach more justice in this field with a specific court system. It will be better to avoid olygopolies as well as trolls will have to defend cases in front of well-knowing judges. We agree on that point as well.
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1) There are mainly two kinds of reasons that can be examined to explain the acquisition of Motorola Mobility by Google:
The first reason lies with the facts. Indeed, Google needs grounds for expansion and entrance in new markets. To overthrow its concurrent Apple, significant growth in Smartphone devices is not sufficient. If Google wants to rise higher, it must “control the experience from software to hardware”. That is what Larry Page meant by saying Motorola will “supercharge” Android.
On the other hand, legal grounds for this massive acquisition shall foster their position in the patent field. Those mobile patents represent the biggest part of the acquisition price, and in the event of a failure in developing their position in the market, that portfolio of patents could still save the day. Where it once was a laggard (it possessed only 2000 patents), Google’s acquisition ten folded its portfolio, gaining over 24,000 patents (7,000 of these being pending but still, 7,500 according to The Economist). Strong with this fostered patent portfolio, Google shall therefore be able to defend itself in legal battles.
2) The acquisition of Motorola by Google reveals broader issues about the patent system, about which it is clear that the redaction of The Economist is rather negative. Initially thought as to encourage innovation, the patent system would rather be tackling it down nowadays, and seem to become somehow perverted, as demonstrated by the Google’s bid. Three problems stand out:
– A first problem with patents is that there is too much emphasis on their quantity (“the heights of their respective piles”) rather than on their quality. Patents are now part of a market where big money makers have the legitimacy because they have the means to buy many of them. But before looking at the quantity, we should focus on the content!
– Another problem is the number of “dubious patents” (particularly in the fields of software and business methods) that should never have been awarded.
– A last problem is the “patent trolls”. Firms have now a tendency to treat patent as lottery tickets.This leads to a overbid of time-consuming and expensive lawsuits.
3) The criticisms of the US patent system put forward by The Economist are threefold:
– First of all, it says that ‘patents in field where innovation moves fast and is relatively cheap should have shorter terms than those in areas where it is slower and more expensive’.
– Secondly, it says that ‘the bar for obtaining a patent should be much higher and the process of re-evaluating bad patents should be more open and efficient’.
– The third criticism is that ‘there should be greater disclosure requirement of the ownership of patent portofolios, and that patent cases should be heared by specialised courts’.
The Economist informs us that a patent-reform act is about to be passed in the U.S., but that it will not make much difference because the reforms are not bold enough. If this information is true, then those remarks about the US patent system seem rather justified, although they seem to focus more on improving the possibilities for technological breakthroughs by making the patent system clearer, more open and more efficient, rather than protecting the innovations and new inventions of researchers. The solutions proposed by the authors of the article might benefit much more to big companies with high resources rather than to small companies with young, talented researchers.
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Well-written.
For your information: the reform of the US patent has been voted in the meantime and President Obama signed the law (America Invents Act) on Sept. 16, 2011. You have already a summary on Wikipedia: http://en.wikipedia.org/wiki/Leahy-Smith_America_Invents_Act
You might consider whether this law responds to some of the criticisms mentioned in The Economist. You can thus continue to reflect on this issue…
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The various reasons behind this acquisition is:
1a) google wants to enter in the new market of mobility hardware, in the sense of producing, its own android phone as Apple does for year.
1b) the number of phones sold puts google android system and this choise under attack of the other companies like MIcorsoft or Apple.
1c)Conflict between companies will be played in the field of patents
1d)The reason are buying a portafolio of patents with which to protect Android, we also think that google had already tried to buy the portofolio of Nortel, but this has been bought by a joint action by MIcrosoft and Apple.
2) Now companies, especially in the field of software, see law of patens in the opposite direction to that for which it was designed. Companies,so-called “trolls” do not seek to have the most patents for significant innovations but a multitude of patents with which to engage dispute with the other companies.
3)The American system is criticized by the economist because it allows you to start debateon everything and it is very slow.
I can not say whether these criticisms are justified, but from reading I can share.
I think it’s useful to have a substantial change in legislation, new standards for patents and procedural point of view the possibility of appeal courts with special procedures.
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1) The main reasons behind Google’s acquisition are the following:
– the first one is linked with patent issues: the acquirement of Motorola’s portfolio of 17.000 patents in order to have a better defence against his competitor in patent lawsuits.
– the second and third reason are much more a bet as Google want to enhance his situation in the TV area and extend his smartphone market share.
– finally, Google wants to extend software and hardware for Android phones
2) The reason of Google’s acquisition linked with Intellectual Property issues is simply that with his new portfolio of patents, Google shall strenghten his defence in legal battles against his industry rivals (as Microsoft, Apple,…). This, as a hole, will reduce his litigation costs by enhancing Google’s chances of winning lawsuits lodged against him.
3) The economist raised 3 problems that are making the patent system “sifling innovation rather than encouraging it”: the first one is that the system focus on quantity rather than on quality of the patents, the fact that patents has been unjustifiedly granted is the second problem and finally the existence of “patent trolls” that create a system of lottery in patent lawsuits.
In my opinion, the critics of the economist are well-founded. I’m very far from being a specialist in the matter but we could ask ourselves if this new acquisition of Google making of him a monopolist on the patent market ( Erick Schonfeld is briefly talking about the deal passing antitrust review) is a good thing. Patent become a commodity that we could sell and buy without any regard to the inventor and the type of technology protected. This fact is, according to me, a bad way to deal with this matter. We should rather focus on the particularity of each patent and create a protection that match with the specific feautures of the circumstances.
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1. Google’s $12.5 billion bid for Motorola indicates that Google wants to make mobile one of it’s main “growth drivers”. By acquiring Motorola, Google wins a portfolio of 17,000 patents and 7,000 pending ones. Since the iPhone is still the most popular smartphone, Google acknowledges by buying Motorola that it must “control the experience from software to hardware” if it wants to unseat Apple. Indeed, by owning Motorola, Google can create the smartphones and beneficiate from all newest advances in the operating system, exactly like Apple does.
In case Google messes it up, it will still own the mobile patents. This portfolio will help Google to stand up against “Microsoft, Apple, and other companies” and defend Android against those companies’ smartphones.
2. The acquisition of 17,000 plus 7,000 patents will strengthen Google’s position in future and current lawsuits with greater industry rivals.
Indeed, Google knows that in the last years, the patent system has been slowing down innovation rather than encouraging it. And Google also bears in mind that if the total profits from patents can be high, the associated litigation costs can be huge. Those costs are the reason behind the Motorola acquisition: Google wants to strengthen its position in lawsuits concerning smartphones with the great patents portfolio of Motorola.
3. – The patents are valued regarding their quantity rather than their quality
– The number of uncertain patents that never should have been awarded is rising, especially in the areas of software and business methods.
– The problem of “patents trolls”, firms treating patents as “lottery tickets” and filing expensive lawsuits against those who presumedly infringed them.
The Economist suggests some reforms are needed: – patents in areas where innovation is fast and is cheap should have shorter terms.
– the bar set for the acquisition of a patent should be much higher and the re-evaluating of bad patents process should be more efficient and open, especially for software and business methods.
– The disclosure requirements of the ownership of patents portfolio should be greater
– Specialized courts should hear patents cases.
Those critics are probably justified, but since we know nothing (yet) about the patent system in the U.S., we can only believe what this article is telling us. As for the different reforms suggested by The Economist, they seem, for us novices, necessary, especially the idea of specialized courts hearing patent cases. Indeed, now that matter has taken a great place in the legal system and all lawsuits involving patents or any other IP should beneficiate from specialized judges and courts, capable of understanding the underlining issues behind the IP cases as such.
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1. Google intend to make one of its biggest acquisitions in an area where it still a laggard, an area where Google could have a larger control than it has as up to now. The idea behind this bid is to create Android phones to its exact specifications and take advantage of the latest advances. We could say that this bid is a sort of defensive move against Microsoft, Apple, … Indeed, the Motorola Mobility will bring a strong patent portfolio that will help Google defend the Android sector.
2.
Nowadays, the patent system doesn’t encourage innovation anymore, but rather stifles it. Google is here interested in the quantity of patents it will receive trough the acquisition of Motorola Mobility and it is not really interested in innovating the technologies already developed. Indeed, gaining such arsenal will strengthen its position in future legal battles. It is said that the profits made from patents is lower than the profit made by the associated litigation cost. If you have a lot of patents, you have a “supra” legal force and means you’ll make more money. Today’s patents acquisitions is more about quantity than quality. If you have a lot of patents, you will be more protected against lawsuits from other companies. That’s the reason why we see some patent trolls developed recently. Some patents should have never been awarded as well or were awarded for the wrong reasons. We could relate this system to some sort of lottery.
3.
According to the Economist, the patent system needs reforms. First of all, patents that evolve in the fields of fast innovations should have shorter terms, while the slower and more expensive areas should have longer terms of patents.
Secondly, it is said that the bar for obtaining a patent is too low. It should be higher. On the same level, bad patents should be re-evaluated in a way that is more open and efficient.
Finally, the ownership of patent portfolios should be more protected regarding the disclosure requirements. The Economist also holds in favor of specialized courts for patent cases.
The criticisms of the Economist seems quite fair to me, except regarding the terms of the fast/slow innovations patents. It is not because the innovation moves fast that the idea and its development cost a penny.
The idea of specialized courts for IPrights should be followed, as this area of law is very technical. It is important that it is not tried by laymen/non expert juries.
Yes, but the paradox is that there are specialized courts in the US (at the level of the Court of Appeal where the Federal Circuit is exclusively competent). But in first instance (trial level), there are juries, which is probably not a good idea for such a technical area.
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The various reasons behind this acquisition is that Google winn gain a portfolio of 17,000 patents and another 7,000 pending. By owning Motorola, Google can create Androids phones to its exact specifications and take advantage of the latest advances in the operating system like Apple does.
With Android under attack on the patent front by other big companies (like Apple or Microsoft), buying Motorola is much a defensive move than anything else.
As we can see in the Economist article, there are some issues about the patent system, especially in the US.
In recent years, the patent system has been stifling innovation rather than encouraging it. The US companies total profits are often less than their associated litigation cost, due to patent legal issues.
What’s wrong in the system is the prizing of patent quantity rather than quality.
there is also a rise in dubious patents that should never have been awarded.
Finally, there’s a growing problem of patent trolls firms, that treat patents as lottery tickets. These issues lead to file expensive and time consuming lawsuits against companies that have supposedly infringed them.
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1. What are the various reasons behind this acquisition?
The reasons behind this acquisition are various, it will give the opportunity to google to have a better place on mobile market as well as providing a beter control on the android system in order to compete Apple and be stronger in negociation.
On the legal side we can see that it can be explained by the fact that buying Motorola gives to Google the property of not less 24 000 patent in a field where they are a bit late and thus a bit weak for légal battles around patents. Indeed, reight now google owns only 2000 patents More than just the acquisition of Motorola as phone maker it gives them control over its patent portofolio.
2. What are the broader issues about the patent system that this acquisition might reveal?
The economist underlines the fact that in the race to patent acquisition focus on the number of them instead of the real quality. In the case of google we can see that they are mainly interested by the huge number of patent available. Another reason is that by focusing on quantity we can see that some patent are not good, linked to that there is also the probkem of firms that file lawsuits without really thinking deeply just to make money.
The article also underlines the disparity between the patent they all have the same time of « Monopoly » whereas some fiel are growing much more quickly than other and some fiel like pharmacy requires more work to obtain a result which desserve a patent.
Another problem is that patent dispute are not heard by specialized court whereas patent is a very difficult marrket and expert- judge would give a much better resuly.
3. The Economist is very negative about the US patent system. Could you briefly present the main criticisms contained in The Economist‘s article? Do you think those criticisms are justified? Do you have arguments to partly rebut the criticisms put forward in “Patent Medicine”?
For the first part of the question, response may be found in the answer of question nr 2. Concerning the second part, I unfortunately don’t have enough knowledge on patent to really criticate this article, their argument seems interesting and thought of.
Amandine Faucon
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1. What are the various reasons behind this acquisition? (Focus on the legal aspects)
The main reason Google has been eager to acquire Motorola Mobility concern the impressive and significant amount of patents the company accumulated over the years. In fact, with its 17.000 actual patents and 7.500 still pending, Motorola Mobility could largely contribute to Google’s strong position on the market and its protection against potential future legal battles.
Indeed, as the article in The Economist states, the whole patent system in the United States has lately been more about lawsuits rather than real protection of new technologies.
Plus, this reason may not be as in the abstract as it would seem since Google’s smartphone software is currently sued by different companies about patent issues.
Another legal issue that seems to be raised by this possible acquisition by Google, is whether or not it would pass the antitrust review and the consequences it might have on the whole smartphone market. At the moment, the software Google created counts many licensees, but there is no doubt that if the acquisition process goes through and if the antitrust test is passed, Google would favor the Motorola’s smartphones over their rivals and would thereby stand a chance against the Apple’s iPhones.
2. What are the broader issues about the patent system that this acquisition might reveal?
As I wrote above, the prime goal of the whole patent system has recently changed; it went from a purpose of protection to a simple matter of lawsuit and money.
Today, the companies do not seek for the quality of the patents but rather for the quantity. They want to own as many as possible in order to go to court and sue other companies on ground of potential infringements.
The author proposes different mechanisms to correct the system such as reducing the length of the protection in fields that permit fast and cheap evolution. He also suggests raising the standards requirements to obtain the patent or improving the re-evaluation system for what the author calls “bad-patents”. Finally, according to him, the patent cases should be judged by specialized courts.
All those propositions are meant to make the quality prevail against the quantity as it used to do.
3. Could you briefly present the main criticisms contained in The Economist‘s article? Do you think those criticisms are justified? Do you have arguments to partly rebut the criticisms put forward in “Patent Medicine”?
According to the author, patents are, in some fields, awarded for a too long period of time (20 years) and this should change, especially in the computing domain.
Moreover, in the U.S. system, they are obtained too easily which results in some dubious patents accumulated by some companies for no other reasons than filing lawsuits against their rivals.
Finally, the patent cases are heard by non-specialized jury that makes it even easier for companies to use “patent trolls”.
I do not think I am in any position to know whether or not those attacks on the American patents system are justified. However, considering the comparison he makes with the acquisition by Google of the Motorola Company and all the advantages that Google would reap of the transaction, it clearly appears as a patent matter. And yet, a system that allows such abuses does not seem flawless.
As for the criticisms, I don’t think that reducing the protection length would change anything to the problem since firms would just try to circumvent the problem by for example in some cases applying for trademark (as we saw in the Lego case) and keep their technologies secret which would considerably slow down the evolution.
But otherwise, I agree with all his other suggestions and I think that strengthening the patenting conditions may be beneficial either way.
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1) Larry Page, CEO of the Google group, explains why the acquisition of Motorola Mobility is strategic from a legal perspective. It will allow Google to strengthen its patent portfolio. Major companies are indeed facing several trials with respect to the intellectual property rights. For instance, Apple has recently obtained a temporary ban on the marketing of Samsung’s digital tablet in Australia and in Europe.
2)- The prizing of patents : to promote quantity rather than quality.
– dubious patents: awarded for wrong reasons. – growing of “patent trolls”: costs and time consuming of useless litigation introduced only for economic reasons.
3) The criticism essentially concerns the accessibility to the patent protection. The procedure is too cheap, and the bar for obtaining a patent is too low. The protection is too long in fields where innovation moves fast. There is an overwhelming of litigation and the judicial system is not adapted to rule patent cases. There is a need for a specialized scheme.
According to the Author, the patent system must be more restrictive in some areas, for instance, for software or business methods, in order to promote innovation instead of litigation.
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Google is not so much buying a cellphone company but has its eye on the portfolio patent of Motorola Mobility. Google is actually buying patents.
Google wants to acquire the most patents possible to outrun its opponents like Apple.
The broader issues about the patent system is that companies are in a war, a war for patents. The more patents you’ve got, the more “powerful” you can become. So it is not so much about the quality but better yet about the quantity and “size” of your patent portfolio. The more patterns you have the more protected you are against lawsuits from other companies.
In the Economists criticisms I specially agree (for all I know) on the fact that patent cases should be heard by specialized courts. Cause it’s seems to be such a complicated area of law and also a very ‘growing’ one. I think it will become more and more important to focus on that aspect of the market, the way businesses work.
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1. The main reason behind this acquisition is that it strengthens Google’s position in futur legal battles. Indeed, Google gains 17OOO patents and 7000 patents pending globally which made a huge portfolio of 17OOO patents. Thanks to these, Google can create Android phones to its exact specifications and take advantage of the latest advances, like Apple does. On a legal point of view, thanks to these patents and the rights that came with, Google hopes to win further legal battles against other heavily armed industries. Furthermore, Google hopes that this acquisition will help him to unseat Apple. Indeed, despite the importance of Motorola Mobolity mobile phone business, the Iphone is still the most popular smartphone and it represents the biggest Android phones market. So, those patents will help Google defend Android against Microsoft, Apple and other companies.
2. The first issue that this acquisition might reveal is that, nowadays, the patent system stifle the innovation while, at the origin, it was invented to encourage it. Indeed, the costs of litigation due to the patent system are much higher than the profits raised by it. This is a reason why Google wanted to acquire those patents, to increase its legal force.
The second issue is the reason why the patent system had gone wrong. Firstly, because of the prizing of patent quantity rather than quality. Secondly, because of the rise in dubious patent that should never be awarded. Finally, this is due to patent trolls, firms that treat patent as lottery tickets.
Finally, a third issue that can be raised is how to improve the machinery.
3. The Economist is very negative about the US patent system. According to him, it should undertake three main changes. First, patents in field where innovation moves fast should have shorter terms. Second, the bar for obtaining a patent should be much higher. Third, specialized courts should be created and there should be a greater disclosure requirements of the ownership of patent portfolio. However, the new american reform did not change much the system because it was watered down.
I do not know much about the patent system, but, as far as I have learned, I think that if its purpose is to encourage innovation and help inventors then, the Economist might be right. Indeed, it seems that nowadays patents are merely used to make money and increase the power of industries. Willing always more, industries would “force” to invent more and more and a first-class innovation risk to be drown in the middle of other innovations of poorer quality. This is the reason why, I think, that the bar for obtaining a patent should be much higher and that there should be greater disclosure requirements, to protect those first-class innovation and their inventors. Moreover, I believe that the creation of specialized courts to deal with those issues is also important. Other specialized courts already exist in USA to deal with specific areas of law such as the United States Court of Private Land Claims or the United States Court of International Trade. So, why not a specialized court to deal with this increasingly important issue? Moreover, experts could then be involved in the legal process. On the last critic about the term of the patent, I believe that to adapt the terms according to the pace of the evolution should be mitigated and should be dealt with with caution. Too long terms would give too much advantages to firms but on the other hand, inventors should be compensated and protected.
Show lessGood, thanks. But there is already a specialised court system in the US (Federal Circuit), not in Europe.
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(1) One of the main reasons behind this acquisition is that Google gains an enormous portfolio of patents, in a sector where Google is behind the others (Apple, Microsoft,…). The purpose is to unseat Apple which still owns a larger share of the market with the iPhone. The acquisition of Motorola will permit Google to be more performing technologically speaking in the operating system. The portfolio of patents will help Google to defend the Android phone against the attacks of other smartphone companies.
(2) Originally, patents were granted to protect new inventions and promote innovations and creativity. Nowadays, this idea has evolved and been distorted. Important companies prefer to have a huge quantity of patents rather than a few ones with a better quality. They choose to have an important portfolio of patents to be able to defend themselves against competitive attacks.
(3) There are three main criticisms about the US patent system. At first, the undertakings prize quantity rather than quality. Secondly, there is a rise in doubtful patents, some patents are useless and shouldn’t exist. Finally, patents are used as a weapon in order to attack other companies.
We think those criticisms are pertinent. We also agree with the reforms pointed in the article of The Economist which are the following: first of all, the patents delivered in the area where technology moves quickly should expire faster than the others, secondly, the patents shouldn’t be granted so easily, thirdly, patents should be more often controlled during their protection duration, and last but not least, there should be greater disclosure requirements of patents and the case law in these matters should be heard by specialized courts.
Our thoughts about this are that the US patent system has already been distorted too much and going back seems very unrealistic.
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2. Google want to buy Motorola Mobility mobile phone business in order to get more patents. As that Google company will be heavily armed for future battles.
The problem denouced by “The Economist” is the goal pursued by Google. Indeed, the goal of patents is to guarentee a 20 years monopoly to the inventor over a technology. By having a patent, the invetor has to disclove his invention, so that others will “improve” it. The basic idea is hence to encourage inventions.
However, campanies do not use anymore the patent system to make technology advance. Actually, they do it because they want to prevent themselves from lawsuits. That is exactly the reason why Google annouced its bid for Motorola.
3. The Economist critics a reform act that is about to passed in America because this reform will not make a distinction between fields where innovations move fast and one where it is slower and so more expensive. Furthermore, this reform will not increase the bar for obtaining patent in particular areas. According to the journalist, the processe of re-evaluating bad patents should be more efficient and open.And the ownership of patents portofolios should required more transparency.
Moreover, to improve the efficiency of “patents lawsuits”, a independent court should deal with those issue.
According to the journalist, these ideas would help to avoid the patent system stifling innovation.
To my opinion, even if I do not know a lot about the subject, I would be agree with two major ideas. The first one is to distinguish areas where innovations move fast and areas where it moves slower. It seems to me more efficient. As so it will be perhaps easier to control the patent system.
The second idea: to create an independent court for patents litigations, seems good since this type of lawsuits become more and more frequent.
Uwera Gisèle
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Answers to the questions:
1) – To obtain 17,000 patents and another 7,000 patents pending globally
– To enter new markets
– To control the Android phones
– To compete with Apple
2) In pharmaceutical industries, the patent system has slowed down innovation rather than encouraging it. There are three reasons for this:
– the prizing of patent quantity rather than quality
– the rise in dubious patents that should never have been awarded
– the growing problem of “patent trolls”
3) There are three major criticisms about the US patent system:
– patent-holders from different industries are not treated differently
– it is too easy to obtain a patent
– the disclosure requirements of the ownership of patent portfolios aren’t strict enough and patent cases are not heard by speciliased courts.
Not all the criticisms are justified. Regarding health, I think that it is important that disclosure requirements of the ownership of patent portfolios should not be too strict in order to advance the research.
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1)
Google wants to enter the mobile hardware market. They do know that they need to compete against Apple’s iPhone (which is the leader on that market).
To do so, they must control the software and the hardware of the Smartphone (up until now, they only concentrated on the software’s but it was not enough). And to be able to control the whole experience, Google needs many patents. That is why the company wants to buy Motorola Mobility mobile phone business: to acquire a huge portfolio of patents.
To win a legal battle (which occur very often when there is limited competition) one needs legal weapons. The fact of having many patents will strengthen Google’s position.
And in the event of a failure in the conception of a new Smartphone, Google still has the patents which are highly valuable.
2)
One issue that this acquisition reveals is that at the end of the day, the company which will win lawsuit against their goods is the one which has the money needed to buy the most patents. Innovation is not so much about new ideas as it is about who has the money to buy them.
3)
“In recent years, however, the patent system has been stifling innovation rather than encouraging it”. It is quite clear that the Economist’ article is not kind with the US patent system. Why?
The artcile lists three problems to explain it.
One problem is that in a lawsuit, the quantity of the patents tends to overrule their quality. It means that big companies have the funds to buy many patents and win a lawsuit even when a smaller company has better but less patents.
Another problem is that some patent have been awarded although they should not have been (they are dubious).
And a third problem is “the growing problem of “patent trolls”, or firms that treat patents as lottery tickets and file expensive, time-consuming lawsuits against companies that have supposedly infringed them”. It is money and time consuming. And again, the biggest companies overrule the smaller.
I think that the criticisms are justified. But the author of the article himself gives potential solutions to the problems he pinpointed. And I think that those ideas have potential. I do not have arguments to rebut the criticisms but it may be because I do not know anything about Intellectual Property Law.
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1. It seems that Google was previously left behind in the smartphone market, owing to the fact that they focused solely on the software aspect of the production. They can’t be competitive unless they get control over all (OS, hardware, software, …) aspects, which is why they need to acquire Motorolla and its large pattents portfolio
2. The bid stems from a more and more frequent derive of the pattent system. While initially it aimed to encourage innovation by assuring an inventor that their considerable investment in time and/or money would be rewarded by a temporary monopoly, all the while making sure that new ideas would not stay in the dark as jealously guarded trade secret. Now they have gained an unforeseen value in and by themselves: companies see patents as goldmine and sue for infringement at the drop of the hat, while companies that don’t have huge amounts of pattents don’t have much in term of settlement. Those were the third, and also the first arguments developped in the Economist, and it might also have inclued software in its “silly pattents” argument, though the article doesn’t make such a clear connection.
3. The Economist article presents three main criticisms, and accordingly three reforms to remedy them.
First, there’s the problem that value seems to be put on quantity rather than quality (i.e. how big is your pile?) of the pattents held by a company; second, the fact that any innovation, no matter how minor, is covered as swiftly as possible by a pattent, that the author feels should not have been granted. Finally, there’s the attitude of “patents trolls” (sic), companies that aim to earn money by suing for infringment of their patents.
The proposed reforms involve patents that would be time-adapted to their respective field (cheap and fast expire shorter than long and expensive to come up with), with a more efficient patent awarding system, that would put the bar higher. Those would make the awarding of patents more efficient at the origin; a third proposed reform recquires that patent-infrigment lawsuits should be handled by specialized courts.
While I can say that overall I agree with thoses criticisms individually, I must stress that the part of the article I most wholheartedly agree with is the one saying that the patent system started as a good idea. I DID always find it strange than all articles would only mention the number of patents without explaining what was patented, I HAVE rolled my eyes on news of some lawsuits (admittedly, not THAT much about the US system could have reach me. It is probable that i have mostly been influenced by parodies), but I am not sure that the article stresses enough, in its reforms, that all that deal with the system are there to make sure that innovation is actually rewarded. I would have liked it to make sure that the reforms are not made against the big companies that hog up all the IP’s, but in favor of those who come up with new things.
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Question 1.
1st reason: Google has understood that it must control the experience from software to hardware if it hopes to unseat Apple.
2nd reason; Motorola’s portfolio of 17,000 patents will help Google defend Android against “Microsoft, Apple, and other companies.
3rd reason; buying Motorola will help developing Google TV.
Question 2. The money that companies earn from patents is nothing compared to the costs of litigation in which they are involved.
Question 3. The problems are three-fold: They value more the quantity of patents rather than their quality. The second is the awarding of dubious patents in the field of software. The third and correlative one is the growing of patent trolls.
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Question 1:
We could say that this acquisition is a way for Google to finally compete in the mobile market, mostly because by buying Motorola it will have all technical information needed to compete with other Smartphones and more particularly the Iphone from Apple.
On the other side, the acquisition of Motorola is mostly important thanks to the patent portfolio that goes with it. Since Google is known to have some lawsuits concerning patents by his competitors it will be able to defend
himself thanks to the patents bought from Motorola.
Question 2:
The main issue of the patent system does not concern the patent in itself but more what companies do with it. The main problem that the article refers to is the fact that today, a company has to pay more for the lawsuits concerning patents than what it could get from the patent itself. Therefore there is some kind of reluctance towards the patent system, and instead of having it encouraging the innovation, it has been stifling innovation.
In fact the main reason behind the acquisition of Motorola by Google is the fact that the huge patent portfolio it will own afterwards will make him stronger in all lawsuits it is caught up.
Question 3:
The article in The Economist clearly shows what has gone wrong with the patent system.
It considers at first that when lawyers take a look at patent portfolio they’ll only look at the amount of patent rather than the quality of patents present in the portfolio, this obviously leads to poor quality patents.
Secondly, it considers that many of these patents should not have been awarded in the first place due to their dubious character.
And thirdly, it considers the problem of “patent trolls” which refers to the fact that companies make an abusive use of these patents to start lawsuits against other companies who would supposedly have infringed them.
The most important issue for companies when they want to make use of a patent is to protect their work, and therefore have something in return from their investment. Now, I don’t think there is a need of many patents in order to protect something, but it should be done in such a way that things are correctly protected right away, without having the need to use many patents. But on the other side, when we look at the competition that some companies are confronted to, I can understand their need of making sure everything is protected, in order not to loose the priority on their invention.
But according to the numerous lawsuits concerning the patent system, we could conclude that the patent system is not yet effective enough.
Excuse-me, I forgot to mention that the comment I posted yesterday was a group work, the others in the group are Marion Nuytten, Dimitri Daskayaenis and Amandine Faucon.
Thanks for taking this into account.
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1. Two main reasons are behind this acquisition. First of all, Google wants to create a Motorola’s smartphone (hardware) adapted to the Google’s software (Android) in order to beat Apple’s I-phone. The second reason is that Google’s patent portfolio is weak in comparison to the ones of its competitors (it lost recently a patent deal). It thus needs patents (and Motorola is offering it more than 17000) in order to defend itself in the courtroom. Indeed, patent is a legal arm useful to be protected against anti-competitive behaviours and Google is currently involved in many lawsuits.
2. Google bought a huge quantity of patent at an incredible price in order to defend itself in legal battle. It shows that patents are now part of a “market” where the purpose is only to own as much patent as possible to attack and defend oneself in lawsuit. Big companies are buying patents rather than innovating by themselves and improving the technology.
3. According to that article, the patent system refrain innovation rather than encouraging it. There are different critics of the US system. First, companies prize more the quantity of patent rather than the quality of patent. Second, dubious have been awarded whereas they should not have been. Finally, patents are often used as lottery tickets to attack others companies that would have supposedly infringed their rights. As a result, the cost of litigation is much more higher than the real profit conferred by the protection of the invention. Loosely, we agree with those critics and with the proposition to reform the patent system.
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1. google bought motorola in order to gain the 17 000 patents of motorola’s portofolio and the 7000 that are still wainting to be recognized. they also bought the mobile phone company to be able to develop their android system by having their own phone company.
2. it shows that patents became a trading money more than a protector of new inventions. it is important to have many patents so you will have a higher power in court.
3. first, in some area where innovation are very frequent and quick the patent terms are to long. sencondly, there should be a higher bar in order to have a patent. it should also be more open to review on bad patents. there should also be greater disclosure requirement. As patent is a complicated area, there should be a special court to judge those trials. i think those the critism are well found but the patent system is still very usefull for small inventor so big firms won’t still their idea.
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By buying Motorola, Google steps into direct competition with its commercial allies Samsung and HTC. What first appears as a surprising economical move from Google is easy to understand when you know that Android, the operating system for smartphones, is under attack by Apple and Microsoft (1).
For the moment, Google owns only about 2000 patents what makes it vulnerable to lawsuits. With the acquisition of Motorola, Google obtains a portfolio of 17.000 patents and 7500 pending patents.
These patents are essential for Google to defend itself against Apple and Microsoft lawsuits. It can also help android partners like HTC and Samsung (2). This has already been done recently: HTC has filed a complaint against Apple for patent infringement… But these patents have been acquired from Google and four of them were property of Motorola one year before (3).
The first problem that The Economist points is that there is an inflation of patents because companies want quantity instead of quality. That’s why Google tries to catch up with Motorola’s patents.
The Economist also criticizes that dubious patents are awarded too easily. This causes the rise of “patent trolls”. These “trolls” are “[n]on-practicing entities (NPEs), which have intellectual property but no actual products” (4). In this case companies only use their patents to ask licensing fees from the companies (5). These patents don’t stimulate but slow down the innovation. Due to multiple lawsuits, litigations fees are often higher than the profit made by a patent.
I think there is a problem about patents in some sectors such as mobile phones where we can observe a “war” between all phone companies (this diagram is significant enough (6)). But the patent system is also essential in others sectors such as the pharmaceutical sector which needs a legal protection to invest into expensive research.
(1) http://techcrunch.com/2011/07/14/larry-page-android-patent-problems/
(2) http://www.indexel.net/article/google-motorola-les-raisons-de-l-achat-de-l-ete-3404.html
(3) http://www.macgeneration.com/unes/voir/130152/google-attaque-apple-via-htc
(4) http://www.economist.com/node/21526385
(5) http://www.economist.com/node/21526385
(6) http://www.gizmodo.fr/2011/08/17/brevet-un-schema-pour-comprendre-qui-poursuit-qui.html
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1) Google will gain a portfolio of 17,000 patents + 7,000 pending patents, which will enable Google to be a serious competitor to Apple and Microsoft by controlling the Android system.
This acquisition will be one of Google’s main ways to grow on the economic market and it will lead him to control the whole process from software to hardware.
2)+3) One of the broader issues is to be stronger in court and in the negotiating process against other companies.
“Stifling innovation rather than encouraging it” means that quantity of patents is enhanced compared to quality.
Furthermore, some patents, called “patent trolls”, should not have been delivered without justified background.
Time is also wasted in litigation because of the infringement caused by companies which do not comply with patents.
The Economist adds that the patent system does not take into account the fact that innovation moves faster in certain areas, much more than in other ones.
These critics seem to be justified except the litigation aspect. Indeed, litigation is necessary to protect the patent system in itself, otherwise it will lead to more and more infringements.
Furthermore, litigation enables some companies to prevent other companies from selling their products created illegally. Indeed, let’s imagine a court which forbids Samsung to sell its phones in Germany because of infringement, Apple will gain some market shares. So it is not time-consuming for Apple to sue Samsung, it may enable it not have any competitor.
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Google Entreprise is one of the most widespread and biggest companies of the world, after for example Microsoft or Apple, but Google has also a huge weakness, it’s very limited. Contrary to other very known companies as Apple, Google is still working in the computers and don’t diversify his products. This could be a problem because Google got some new rival such as Bing.
Of course, Google has been granted with a lot of patents concerning pictures, videos and other applications that are at the peoples’ disposal but those patents represent almost nothing compared with other companies. This is quite penalizing for Google, because like it has been told in the article « patent medicine » published on the 20 August 2011 in The Economist, we are in a system where lawyers and companies are rather concerned about the quantity of the patents than the quality of them.
Apple’s CEO, Steve Jobs, understood this problem, which is in this actually beneficial for his company, and began to diversify his products( pc, ipod, iphone, ipad,…).
Buying Motorola gives Google a chance to get a portfolio of about 17.000 patents, which provides Google on the one hand a chance to diversify it’s products as well and become a serious rival again and at the other hand it grants Google with a heavy armed defense against other companies.
This rising number of patents is also a source of other problems, because for example a scramble between several companies has already begun. In the article “Inventive warfare published on the 20 August 2011 in The Economist, we see that in December four companies bought patents from Novell and right after they’ve been suing each other
You could add the fact that patents are awarded in the field of business methods, which give the companies the opportunity to institute proceedings against other companies.
In fact, the rising number of patents and the awarding of patents in fields where there shouldn’t be any patent, lead to one big problem, the whole system has been digressed from his initial function, because patents have to be used as defense and not as a way to attack someone. We are indeed in a system where each company wants to have the exclusivity on a product and because of the quick progress in technology, each company suits another to have this exclusivity.
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1. Google goes soup-to-nuts on an Android with bid for Motorola.
One of the main reason lying behind Google’s offer to aquire Motorola Mobility is linked with IP issues.
Indeed, this bid might be seen as a response to the failure of the Nortel deal (early July 2011) which if Google had won it instead of Apple, Microsoft and others would have allow Google to gain more than 6000 patents.
Currently, the company owns about 1000 patents which is not enough to protect it from lawsuits.
In order to be less vulnerable as well as to compete with Apple’s 10 000 patents and Microsoft 20 000+ patents, Google needs to increase the number of patents possessed by the company.
The aquisition of Motorola Mobility seems to be an appropriate solution as Google would then gain 17 000 patents with another 7000 that are pending.
If at first this aquisition seems to show that Google is willing to enter the smartphone market and generate a competition with the Iphone, it can also be explained by th company willingness to take a defensive step against its competitors.
2. Patent Medicine
The bid made by Google to aquire Motorola Mobility illustrates some of the weaknesses of the actual patents system.
Whereas this system was intented to stimulate innovation, today the market seems to be using it mainly as a legal device granting monopoly for 20 years. The consequence of this is that lawsuits related to IP issues are more and more frequent and in order to be able to negociate those issues, companies need to have a strong patents protection. In the end, the money spent in those IP litigations by the companies may often be superior to the profit that they are making with the patents.
3. The Economist criticism about the US patents system.
The article presents a few critics toward the US patents system. Firstly, the author explains that the duration of the patent should be reduced in sectors were investements on new technologies are not that expensive.
Secondly, he is in favour of having more criteria upon which depends the attribution of patent when it linked with the softerware sector or business methods.
Thirdly, the author is proposing a system where the ownership of patents would be more visible to the poeple.
Finally, he thinks that specialized courts should hear about cases related to IP issues.
In my opinion, some of those critics seems to be quite well founded, mainly the one about the duration of a patent and the need of having specialized courts treating IP cases.
It is clear that in some sectors, the warranty of 20 years monopoly is needed to attract investors but in some others such as phones and computer, investements are going to be done anyway. Thus, it does not appear that granting a monopoly for 20 years would be a factor of evolution in those areas. To ensure a better competition, it might be logic to diminish the duartion of the patent protection.
Concerning the second critic, I think that having specialized courts judging IP cases and giving appropriate penalties may be a good mean to solve the excess of litigation introduced by companies on IP issues.
To partly rebute the cirtics made against the patents system in the article, I would say that anti-trust laws are another legal device which purpose might also be to alleviate the negative effect of the patent system.
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This acquisition is an attempt to just like Apple, not only control the software part of smartphones but also the hardware (thanks to Motorola devices) and hence, tend to beat Apple on the smartphone market since Apple is so far the most popular smartphone device while Google with its Android OS simply has the largest market share across all devices that aren’t IPhones. Motorola Android smartphones would be the ones allowing Google to really face Apple and its IPhone.
Also, even if this first goal fails, this acquisition would help Google to better defend itself when attacked on some patent issues since its patent portfolio would get boosted by all these got by Motorola.
According to The Economist, this second reason for which Google is interested in Motorola reveals one of the current problems in the US: the fact that patents while supposed to be limited monopolies encouraging further innovation by protection for the inventor but also disclosure of information to allow future inventions, they nowadays repress innovation since they are mainly used by corporate entities to block others. Companies cumulate as many patents as possible and suit whoever dares to innovate in a similar way.
Moreover, it considers that the US IP system won’t be able to face this issue even after planned changes, because it won’t answer the current situation as it should: by shortening patent terms in fields where innovation is quick, putting higher conditions for, and requiring greater disclosure of patent portfolios and specialized courts.
I cannot say that the US system is perfect and such things as a specialized court or higher conditions for patents are surely good ideas. However, differentiating terms isn’t something necessary: it’s rather a change in companies’ mentality that is required.
The idea of protecting a technological advance is good and as such, no need to reevaluate the terms since the context changes constantly and it might be difficult to agree on terms in each field: this would simply raise new issues.
The crux in this case is the way in which companies understand the word “protection”. It shouldn’t mean trying to attack everyone around as soon as his invention has some common points with ours, but rather feeling safe that no one will offer a product being exactly the same as ours. If the distinction between “completely the same” or even “having many similarities”, and simply “having slight resemblance or same basis but different result in fine”, isn’t done, then any system won’t help. IPR involve some sort of restraint: we enjoy protection but accept disclosure and hence also accept that others may get inspiration from our innovation. Otherwise, companies should simply opt for trade secret instead.
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1. There are two main reasons to this expensive investment from Google.
The first one is the search for growth. Indeed, as Google wants to enter new markets, the acquisition of Motorola Mobility shows that the company has decided that mobile would be one of his main growth drivers. The goal is to unseat Apple, iPhone being the most popular smartphone in the world. Google hopes that the owning of Motorola will help them to dethrone it because it will allow Larry Page to create Android phones to its exact specifications and take advantage of the lastest advances.
Incidentally, the aquisition will also helps Google to develop itself in the TV area.
The second main reason is that buying Motorola Mobility brings a portofolio of 17.000 patents and more than 7.000 patents pending. It is of high interest for the Internet giant, that remains backwards in this area, particularly after that a consortium including Apple and Microsoft had bought 6.000 Nortel’s patents one month before the purchase of Motorola Mobility while Google got « only » 1000 patents from IBM .
As the same Apple and Microsoft, plus Oracle and others attack Android on this front, Google’s acquisition is also a defensive move.
2. The fact that there are these lawsuits is behind Google’s bid. Previously sceptical about patents, the company has now understood that, if the profits from it are big, the associated litigation costs are huge.
That is why there is this « patents rush » : the point is to reinforce its own position, particularly with regard to the problem of « patent trolls », companies that owns a lot of patents and consider these as « lottery tickets », pusuing companies that have supposedly infringed them.
Besides this problem of « patents trolls », there are two other issues that are revealed by the acquisition of Motorola Mobility. It highlights the trend to compare portfolios by looking at its size and not at the quality anymore.
The other issue is about the increasing number of dubious patents -particularly in the fields of software and business methods- that should never have been awarded.
3. The Economist presents the basic idea of patents as a good idea, but it criticizes the US patents system by pointing out the three issues we have seen in point 2. (patent trolls, size comparison rather than quality analysis and dubious patents).
A patent reform act (the America Invent Act – AIA) was on the edge of being passed when this article has been written, but it is said that it won’t make much difference because it is not bold enough. The journalist proposes other reforms. By doing that, he also emphazises the criticisms that may be adressed to the US patent system.
– First, it is said that the terms in fields ‘where innovation moves fast and is relatively cheap’ should be compared to those in areas ‘where it is slower and more expensive’.
– Second, ‘the bar for obtaining a patent, particularly for software or business methods, should be much higher the process of re-evaluating bad patents should be more open and efficient’.
– Finally, the journalist asks for ‘greater disclosure requirements of the ownership of patent portfolios‘ and that patent cases are heard by specialised courts.
Those criticisms seems justified to me, when I see the incessant war between big companies, that attack each others on the basis of a technology stealing in order to make money. I think it is kind of abusive because the claims are sometimes based on details.
For example, a Samsung’s tablet have been prohibited in Germany in September because it has the same look as the iPad. Apple may have a design patent for its tablet but the fact that there is too much ressemblance seems to me a weak ground for invoking a « technology copying».
I have also always been surprised to see that Swatch has never claim anything against Ice Watch (a lot of people confound) while the same Ice Watch have been attacked by…Lego.
Even if these claims may be legitimate, I think that companies try to benefit from the patent system, and that is not acceptable.
Because of that, there is a whole processus of patent trade. We may see that Google has bought in the end of december IBM’s patent for the third time in a few month, to defend itself against Oracle, and that the same company have sold patents to HTC so that the latter can pursue Apple on basis of those patents. I do not understand how such a processus is possible when we look at the first purpose of the patent system.
By way of conclusion, my opinion is that patent system is good in its purpose but there are misuses of the system, as it is said in the article of The Economist. It is positive that an Act as been voted to counter these practices, but there is still a lot of improvements to do.
Show lessFine (be careful: too many typos and mistakes in the text). Also, the topic is huge — but you should nevertheless try to take more distance from what you read.