Google Admits It Needs Apple’s Patents to Compete

In a letter to the Senate Judiciary Committee, Google General Counsel Kent Walker  has argued that proprietary non-standardized technologies that become ubiquitous due to their popularity with consumers should be considered de facto standards:

While collaborative [Standards Setting Organizations (SSOs)] play an important part in the overall standard setting system, and are particularly prominent in industries such as telecommunications, they are not the only source of standards. Indeed, many of the same interoperability benefits that the FTC and others have touted in the SSO context also occur when one firm publishes information about an otherwise proprietary standard and other firms then independently decide (whether by choice or of necessity) to make complementary investments to support that standard in their products. … Because proprietary or de facto standards can have just as important effects on consumer welfare, the Committee’s concern regarding the abuse of SEPs should encompass them as well.

Is that all the time, or only when it suits Google’s interests? Popularity and ubiquity are not (yet) enough to limit the scope of patent protection.

Google is forwarding the argument that some inventions are so good that they should be considered “standards” subject to restrictions. In a letter of his own, Apple General Counsel Bruce Sewell responded. “That a proprietary technology becomes quite popular does not transform it into a ‘standard’ subject to the same legal constraints as true standards.”

Sewell wrote:

The capabilities of an iPhone are categorically different from a conventional phone, and result from Apple’s ability to bring its traditional innovation in computing to the mobile market. Using an iPhone to take photos, manage a home-finance spreadsheet, play video games, or run countless other applications has nothing to do with standardized protocols. Apple spent billions in research and development to create the iPhone, and third party software developers have spent billions more to develop applications that run on it. The price of an iPhone reflects the value of these nonstandardized technologies — as well as the value of the aesthetic design of the iPhone, which also reflects immense study and development by Apple, and which is entirely unrelated to standards.

The distinction may be in the origin of the popularity. Was it from being adopted industry-wide, or was it because one developer invented a really good technology, forcing everyone else to get on board or fall behind. Here, Apple took a cell phone, made an iPhone, and now we have the patent wars.

Apple’s argument mirrors the rationale for our patent system itself: an inventor gets property rights to an idea for a limited time, in exchange for disclosing the idea. Others can embrace and extend the invention, but only when the patent expires.

Cook argues:

No one should be able to get an injunction off a standards-essential patent because the owner of the patent has the responsibility to license it on a fair, reasonable and non-discriminatory manner . . . [a]nd so when somebody comes to you and tries to get some obscene level of money from you for this, they are in essence telling you they are not going to license it because they want to go try to get an injunction and use the court system to do that. In my view, they use it in a way that it wasn’t intended. … And you can always argue about the payment, and there has to be a forum for resolving those disputes. The problem in this industry is if you add up what everybody says the standards-essential patents are worth, no one else could be in the phone business. Competition would be locked out. And so it’s kind of gotten crazy — this is one issue. There is some of this that is maddening. It’s a waste; it’s a time-suck. However, does it stop innovation? It’s not going to stop us from innovating — no — but it’s overhead. It’s overhead that I wish didn’t exist.

For more, read here.