Measure For Measure In The Smartphone Patent Wars

When will Sony get its due? At it turns out, the company is already getting paid...

When it comes to patent cases, perhaps the biggest one going on right now is between Qualcomm and Apple. I addressed aspects of that dispute in a previous column, and there are no signs yet that the parties are close to resolving their differences. Qualcomm is also currently at trial with the Federal Trade Commission, in a hotly contested case about Qualcomm’s patent licensing practices. Keeping track of all the developments in both the Apple and FTC cases can be a time-consuming task for Qualcomm investors, but there is no doubt that the outcome of each case is critical to Qualcomm’s present and future prospects.

No company wants its entire business model on trial, but that is the predicament that Qualcomm finds itself in. Will the bill come due for Qualcomm’s many years of outsized licensing success? Or will the dual assault by a key customer and the government fail to bring changes to Qualcomm’s successful licensing efforts? We will see.

For purposes of this column, however, I want to focus on a “hiding in plain sight” tech giant that has played a critical role in the smartphone patent wars. In fact, this company’s technological developments have become a focus not only in Qualcomm-Apple, but also in the previous titleholder for biggest patent case going — Apple-Samsung. The company is Sony, whose contributions to modern smartphones have not gotten the credit they deserve, perhaps because Sony’s smartphones have themselves failed to gain much commercial traction. Despite that market failure, any objective observer must concede that the company responsible for the signature consumer product of my childhood — the Walkman — was essential to the development of the signature consumer product of this generation, the smartphone. Perhaps that fact should not be a surprise to anyone, given Sony’s history as an innovator in a wide array of consumer technologies, from televisions to VCRs (remember them?) to audio devices.

Before we take a look at how Sony’s patents and technology have played a role in the seminal patent cases of our age, let’s consider one of the key tenets of justice that has existed since biblical times, namely the concept of measure for measure. In the popular conception, that principle is expressed in the famous biblical exhortation of an “eye-for-an-eye” in the personal injury context. While the true application of that legal maxim is actually “money value of an eye-for-an-eye,” the salient point is the idea that justice sometimes requires the paying back in equal measure of what has been taken. That said, it is often difficult to isolate precise examples of this in the business world, but I think there is some validity to the idea that Sony has been paid back measure-for-measure with respect to its innovative activity.

Let’s start with Sony’s role in Apple-Samsung. During those proceedings, Sony was revealed as a key source of design inspiration for the iPhone, to the point that Apple had even hired a key ex-Sony employee prior to launching its first smartphone. While the full extent of Sony’s contributions to the prior art were excluded on evidentiary grounds in that case, the perception of Apple as the true innovator of the now ubiquitous smartphone design was revealed as a false one. In fact, an objective observer could conclude that both Samsung and Apple owed a debt to Sony’s design prowess, even though Sony itself had nothing to gain from the case between the companies other than past due recognition of its innovative efforts. Either way, Sony’s designs proved harmful to Apple’s positions in that case.

Likewise, a Qualcomm-patent that was acquired from Sony is at the heart of the current dispute between Qualcomm and Apple. In fact, the Chinese-counterpart to Sony’s U.S. patent is behind the existing injunction secured by Qualcomm against Apple in China. Putting aside the fact that the entire worldwide dispute between Apple and Qualcomm begs for international arbitration rather than piecemeal litigation in different countries, here again we have a Sony patent causing trouble for Apple.

Ultimately, the fact that Sony’s patents have proven a thorn in Apple’s side only suggests a measure-for-measure consideration for Apple’s (and the entire industry’s) failure to properly credit Sony as perhaps the key innovator in the smartphone space. But the true justice in my view is that Sony is an essential vendor to Apple with Sony enjoying significant sales of camera sensors for iPhones. So while Sony may not get the recognition it deserves from consumers, its products are critical components of modern smartphones — including the market leader. Not a bad position for Sony to occupy, even if customers are not carrying around Sony-branded phones. They are getting paid anyway…

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Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.


Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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