BREAKINGVIEWS-U.S. judge deflates smartphone lawsuit bubble

Wed Jun 13, 2012 3:24pm BST

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(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

By Reynolds Holding

NEW YORK, June 13 (Reuters Breakingviews) - A U.S. judge may have deflated the smartphone lawsuit bubble. Apple (AAPL.O) , Samsung (005930.KS) and Google’s (GOOG.O) Motorola Mobility have been waging a global war over the rights to technology that powers features on touch-screen gizmos. But a ruling last week exposes the extravagant claims as mere ploys to gain competitive advantage.

Apple leads the way, fulfilling a promise by late founder Steve Jobs to go “thermonuclear” against smartphones running Google’s Android software. The $540 billion company has filed dozens of patent suits in the United States and abroad against rivals, scoring small victories like February’s German court ban on Motorola’s imitation of the iPhone “slide-to-lock” feature. Opponents have struck back. Another German court blocked Apple earlier this year from using Motorola’s way of automatically signaling when an email arrives.

Judge Richard Posner took a refreshingly hard line last week. Rather than indulge Apple and Motorola with a trial, he tentatively ruled that neither could show harm from the other’s alleged infringement of smartphone patents. Motorola may have violated Apple’s rights to, say, a battery-strength monitor, but Apple’s demand for $14 million in damages was “bizarre,” Posner said, and an order barring infringement unwarranted.

Other judges seem to be growing similarly impatient. Last week, when Apple proposed a court order to block Samsung smartphone sales, Judge Lucy Koh warned the move could delay other cases before her. “I cannot be an Apple v. Samsung judge,” she huffed.

But Posner, an intellectual-property guru, may be the first jurist to reveal the lack of substance in such cases. Companies can claim features like finger-swipe controls are smartphone crown jewels, but their economic value is usually low. Competitors blocked from imitating the glorified gimmicks merely create a work-around. And patents protecting them are often declared invalid.

Like many tech-patent battles, smartphone litigation is aimed at hobbling competitors. That’s understandable, given what’s at stake in the $200 billion smartphone industry. But it can stifle innovation when the risk of getting sued discourages R&D investment. Profits and, ultimately, consumer choice also suffer. Posner’s warning is worth heeding. Rather than abuse the court system, smartphone makers should just duke it out in the marketplace.

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CONTEXT NEWS

- U.S. Court of Appeals Judge Richard Posner tentatively canceled a trial scheduled for June 11 in Chicago between Apple and Motorola Mobility because neither side could prove it was damaged by the alleged infringement of smartphone and tablet-computer patents.

- The judge’s June 7 ruling came in one of dozens of lawsuits involving Apple, Samsung, HTC (2498.TW) and Google-owned Motorola over smartphone and tablet technology. Apple’s iPhone accounts for more than 20 percent of the roughly $200 billion global smartphone market, according to IDC, while Samsung, Motorola, HTC and other companies that use Google’s Android operating system in their mobile phones have more than 60 percent of the market.

- Reuters: US judge cancels Apple-Google phone patent trial [ID:nL1E8H8008]

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(Editing by Jeffrey Goldfarb and Martin Langfield)

((reynolds.holding@thomsonreuters.com)) Keywords: BREAKINGVIEWS PATENTS/LITIGATION

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