Phone Wars: Apple v. Motorola

Like zombies in a bad horror movie, the lawsuits over smartphone technology seem to be popping up out of nowhere, multiplying at alarming rates. Just a week ago, Apple filed suit in the Western District of Wisconsin against Motorola in the most recent installment of the smartphone “patent wars.” This lawsuit follows Motorola’s own suit less than a month ago against Apple, where the company claimed that its smartphone design was not in violation of Apple’s patents. These two lawsuits are just a few of the many legal conflicts arising out of the aggressive struggle for patent rights to some of the hottest technology on the market.

There are six patents at issue in the lawsuit filed by Apple, focused around the touch-screen design, method and interface found in the iPhone. In an interesting move by Apple, one of the patents cited in the case was received just two weeks ago. Last year at a financial conference, Tim Cook, the Chief Operations Officer for Apple stated, “We like competition as long as they don’t rip off our IP. Obviously Apple thinks Motorola has crossed that line.”

Beyond the content of the case, the fact that Apple chose to file in the Western District of Wisconsin is also noteworthy. With lawsuits against the corporation in Delaware and Illinois, Apple avoided the possibility that its suit would get subsumed into one of the existing cases against it. Additionally, Wisconsin is emerging as a highly desirable location for corporations that need a judgment on a patent quickly. The district court is known as a “rocket docket,” determining cases much faster than a traditional court. This speed is essential in the case of patents, which are extremely time sensitive. With a high-tech community that has been described as favorable towards patents and patent-holders, Apple also hopes to face a more sympathetic court in the Western District of Wisconsin.

To the outside observer, the flurry of suit-filing may seem counterproductive to the market itself. But for Apple, it is of the utmost importance to safeguard this technology, which comprises thirty-nine percent of Apple’s earnings. The iPhone has just been introduced into seventeen more countries this year, which will continue to expand the potential revenue flowing from the product.

Additionally, lawsuits can be one of the most effective ways to encourage future innovation and to generate efficiencies. While the technology of smartphones is new, journalist David Zax argues that the patent debate is not. He makes an interesting comparison to the “sewing machine wars” of the 19th century, arguing that any technology made up of various inventions and processes will always confront a struggle over patents. He claims that while the pooling agreement that ultimately solved the “sewing machine wars” would not be possible with today’s anti-trust laws, an efficient outcome will result.

If history truly does repeat itself, this scuffle will be resolved in favor of the consumers and future inventors. While smartphone manufacturers are momentarily bogged down by these suits, it is likely that the rights to the design will be allocated in the optimum way through the course of trial and settlement. Such lawsuits balance the need to assure future inventors that they will receive compensation for their effort, while also providing the most beneficial product for the consumer.  In the end, companies will be forced to pay or be paid for the development of new technology.

– Virginia Yetter

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