Standards-essential patents. You hear this magical phrase brought up quite often in high-stake technology lawsuits. Heck, it might even have been mainstreamed by an ongoing legal spat between Apple and Google over an alleged Android infringement.

It’s no secret that industry watchers and the media have long insisted that the patent system is broken beyond repair and that it should be scrapped altogether. Leveraging patents deemed essential to an industry standard can damage an infringing party in tens of millions of dollars worth of fines.

Patent experts have long considered the system unreasonable and punishments too severe. And now, deciding enough is enough, the United States Congress is considering forbidding sales bans related to essential patents. If the proposal is accepted, technology giants like Apple and Samsung may no longer be allowed to request bans on infringing devices…

Much of the problem with standards-essential patents stems from unreasonable licensing terms. Holders are required by law to offer such patents on fair and reasonable terms.

That’s FRAND, or reasonable and non-discriminatory licensing, to you. The problem is, sometimes holders of standards-essential patents intentionally set the licensing fees too high so they could assert an infringement and seek a sales ban on a rival device in litigation.

Reuters explains:

The Senate Judiciary Committee is holding a hearing on Wednesday to discuss the antitrust impact of sales bans if the manufacturer infringes on a standard essential patent. The Federal Trade Commission and Justice Department are weighing, which is unusual in a patent infringement battle.

And you gotta love this quote by patent expert Mark Lemley who boiled the complexities down to this line:

If they (smartphone makers) had taken the conservatively $15 to $20 billion dollars they’ve spent on this fight, imagine how much better a place the world would be.

It was estimated in January that Apple spent more than a hundred million dollars on Android war, though that sum has likely ballooned just shy of a billion dollars.

Yup, that’s likely the price of Steve Jobs’ “thermonuclear” option. Current CEO Tim Cook deems it “a necessary evil” and the U.S. Circuit Judge Richard A. Posner recently likened Cupertino’s war on Android to “constant struggle for survival”.

Posner, known for tossing the Motorola-Apple suit out of the window and famous for his witty remarks in the courtroom, is with Congress regarding the difficult state of the patents system:

It’s not clear that we really need patents in most industries. Also, devices like smartphones have thousands of component features, and they all receive legal protection. You just have this proliferation of patents. It’s a problem.

My hope is that Uncle Sam does something about this patent mess which has long gotten out of hand. I respect each company’s right to protect its innovation, but I also feel strongly against lawsuits over patents seeking to put a dollar value on ordinary things and especially loathe misuse of FRAND licensing to ban products from the marketplace.

Yes, I’m looking at all the Microsofts, Apples, Googles, HTCs, Motorolas and Samsungs of this world.

What do you think needs immediate fixing in today’s patent system?

  • This would be a GREAT start to fixing our broken patent system. This would make each company even more competative, knowing that others can use what are deemed “essential”, and know they have to make the next step up. Let’s just hope this passes and helps fix some of the damage the DMCA did.

  • If this causes innovation to flourish, I’m down.

  • Down with patents, give the consumer the choice and then we can listen to more interesting news.

  • I still think Patents are important but I think patent trolls are the problem. At least Apple, Motorola and others actually create products that use their patents. It’s the patent trolls that are preventing innovation because they sit on patents and wait for someone to develop their products for them.