Sue when you’re winning

Certain Internet companies have a selective perspective on patent assertions. They preach peace to Congress but pursue war when it seems opportune.

If the fans of an English soccer side fail to support their team when it’s down, they will hear their rivals chant, “You only sing when you’re winning.” Some companies’ approach to patents is to only sue when they’re winning, but when they’re not, they turn up the volume in lobbying and public relations. They cry foul over a broken patent system, privateers, trolls, and allegedly conspiring competitors.

{mosads}Last year, Amazon.com founder and CEO Jeff Bezos said that patent infringement lawsuits “might start to stifle innovation.” 13 years earlier, he had asserted his patent on one-click shopping–a highly controversial patent on a simple business method rather than a technological breakthrough–against Barnes & Noble and obtained a preliminary injunction.

At a recent Congressional hearing, a Yahoo! vice president called for far-reaching reform measures. That’s the same Yahoo! that extracted an undisclosed amount of money from Facebook last year over a bunch of patents, the most important ones of which it had merely acquired. About ten years ago it made hundreds of millions of dollars by threatening Google with litigation over partly the same patents. It appears to believe that only companies with an exclamation mark in their brand are legitimate acquirers of patents.

Google funds various lobbying fronts that take aim at patent trolls, such as the Computer & Communications Industry Association and–together with Amazon and Yahoo!–the Internet Alliance. Its executives also speak out directly–and typically negatively–on patents, especially software patents, and patent enforcement. But Google is only against other companies’ patents. Never against its own.

Since the deal with Yahoo! ten years ago, which cleared the path for its IPO, Google hasn’t announced a major patent license deal. This is in stark contrast to industry practice. Google released Android, its mobile platform, in 2007, using–but not licensing–Apple’s multi-touch interface concepts, Microsoft’s operating system technologies, Oracle’s Java programming language, and probably also some other players’ inventions. Certain owners of rights so violated felt forced to sue Google and (mostly) its device makers in 2010.

Since then, Google has had only one objective in connection with patents: to get away with its infringement. It first tried to arm itself with patents, showing up at pretty much every major patent auction, including unsuccessful bids for the patent portfolios of software maker Novell and communications hardware manufacturer Nortel. It bought roughly 2,000 patents from IBM, and smaller quantities from failed startups and entities it now denounces as “trolls”, such as Mosaid, against which it later brought an antitrust complaint in the European Union. Another “troll”, Intellectual Ventures, had received one of its first investments ever from Google.

Above all, Google paid $12.5 billion for Motorola Mobility, hoping to gain leverage from its patent trove. It won hardly anything in court, and currently has zero enforceable injunctions in place against Apple and Microsoft. Motorola’s overly aggressive use of patents on industry standards, which are subject to licensing commitments, drew antitrust scrutiny in the U.S. and in Europe. This behavior may explain why six major industry players, including one Google hardware partner, formed the Rockstar Consortium to clear the market of the Nortel patents. Google’s original plan was to do with the far more powerful Nortel portfolio what it then did with Motorola’s weak tea. A whole industry could have been held hostage to Google’s Android patent infringement strategy.

There are good reasons to improve the patent system as well as certain parameters of patent litigation. More transparency and loser-pays fee-shifting would be very helpful and discourage companies from bringing meritless lawsuits over dubious patents. But policy makers shouldn’t weaken a system that innovators large and small rely on only to allow some companies to cover up their failed intellectual property strategies.

Mueller is an intellectual property blogger and consultant on wireless devices. His clients include Microsoft, Oracle, financial services companies, and law firms.