Patent Wars: We're doomed!

As a tech journalist, I hunger for new devices and new technologies to blow my mind away every single day. Some companies, on the other hand, tend to get less excited about some of their competitors' new launches. And that's when they feel that another manufacturer has taken advantage of their own technologies.

That's right, we want to talk about patent disputes today. In particular, the fact that Oppo and OnePlus are currently not allowed to sell or advertise their smartphones in Germany. This is a dispute that could spread to other manufacturers as well as regions. However, this is not the first time that such a dispute has happened, and it could be the pivotal start to many new patent battles.

Current patent dispute: Nokia vs. Oppo

Patent disputes are always happening, and not just among tech circles. Take Curevac vs. BionTech for instance, who are manufacturers of coronavirus vaccines in Germany. Curevac wants to claim damages from BionTech and has sued the latter in Germany. BionTech finally turned the tables and took the patent dispute to a U.S. court.

Technology companies are not all that different, being at 'war' with each other, such as Sonos and Google. A war has been raging on that frontfor two years over various patents. Sonos sued for the first time in 2020, over multi-room technologies and other points. In 2022, it was confirmed by the courts that Google had infringed five Sonos patents, and the tech giant adapted its products. If you're wondering why you can't change the volume level for several rooms simultaneously on Google speakers, but only room by room - ask Sonos!

Meanwhile, the counterattack is underway and Google has now accused Sonos of having violated various patents. Among other things, it is about wireless charging and the recognition of keywords, i.e. activation words for voice assistants.

Most popular at the moment, however, is the patent dispute between Nokia and Oppo. Originally, both companies were in agreement and acted as one normally would: A license fee is agreed upon, which the licensee then pays out, and everything is hunky dory! The patent agreement has since expired and Nokia demanded a fee of €2.50 per smartphone for an extension - worldwide.

You should know that patent law in Germany is particularly strict. One special feature is that licenses have to be valid worldwide. The rest is simple math: Oppo sells 200 million phones worldwide, but only one percent of them in Germany. Nevertheless, the license fee is to be paid for all 200 million devices, which would be equivalent to half a billion dollars. Oppo did not agree to the deal, Nokia sued, and we are now seeing the aftermath.

First of all, not terribly much is happening yet. Since OnePlus belongs to Oppo, we see a gaping hole in the smartphone segment on both sides. Retailers like Amazon or Saturn are allowed to sell off their stock as normal. If you want to buy an Oppo or a OnePlus smartphone at the moment, you can still find one.

Of course, Oppo still has plans for the German market in the long run. A statement from Oppo Germany's press spokesperson confirmed that. However, Nokia is also suing in the UK, France and some other European countries. If the courts follow the German ruling, Oppo could bid goodbye to Western Europe. There are also whispers that Vivo, a subsidiary of the BBK Group like Oppo and OnePlus, could follow suit.

A look at the past: Apple vs. Samsung

If you've been following smartphone development for a few years, you'll know that it's not good when two manufacturers go at each other's throats. There have been countless skirmishes and patent licensing in the smartphone market this millennium, especially in the last decade. The following infographic from Visually provides a rather detailed overview:

The biggest patent spectacle, however, was undoubtedly the battle between Apple and Samsung! The fun began in 2011 and lasted for many years, until a conclusion was drawn in 2018. It was about the famous "rounded corners", subsequently about pinch-to-zoom, about the scrolling effect, and much more.

And quite honestly: If we look to at the following picture, we can already see a teeny bit of similarity between the original and the 'impostor' here and there, right?

However, it is quite possible that Apple would not have fought so hard if it had been an unknown, small company. At the time, manufacturers like Gionee copied the iPhone in segments, partly based on leaked pictures before the smartphone from Cupertino was even official! But Samsung was quickly identified as the main adversary as it wasn't just about the law and money. It was also about prestige and image.

In the end, I think both companies suffered a loss in their image. However, Apple suffered even more when they pushed it to the extreme and sued a café in Bonn called "Apfelkind," or Pear Technologies, whose logo is a stylized pear. I'm not kidding! So much for not comparing apples with pears.

A look at the USA: A patent storm is brewing ...

Why are we discussing this matter in such detail here? This is because I consider the dance on the patent razor to be a dangerous one. Yes, of course it is right that ideas should not be stolen and that good ideas should be rewarded in the form of royalties where appropriate. But we also live in a world in which "big tech" is dividing up the technology world among itself by buying up start-ups or squeezing them out of the market.

The latter also happens with the help of patent law. In the U.S. in particular, it is difficult for smaller companies that want to protect their inventions. This is because there are states that take a fairly lenient approach to patent infringements. In addition, Google, Apple and others have hordes of lawyers and sufficient financial resources to pay them.

The Patent Trial and Appeal Board Reform Act

When I say that I see a new patent storm brewing, it's not necessarily because of big companies like Oppo and Nokia fighting each other. Rather, there could be a decisive change in patent law in the U.S. that will primarily affect smaller companies. It is about a bill that was introduced by several senators there and was christened the "Patent Trial and Appeal Board Reform Act".

Giants such as Google and Apple have been repeatedly sued in patent lawsuits, and Apple alone has had to pay huge sums several times (Optis, $300 million, and VimetX, $570 million). At first glance, this sounds as if the authorities have succeeded in reining in even the big players. But there is something quite different behind it: It is often easier for companies to fork out money for the fine than to pay a significantly higher license fee.

The bill mentioned above could make it even easier for Apple and its ilk in the future, reports the Harvard Business Review. Companies are now trying a different approach now, by changing the patent law. If the bill passes, intellectual property protection would be weakened.

I'll briefly explain what's behind it: the Patent Trial and Appeal Board (PTAB), created in 2011, is basically a court subordinate to the U.S. Patent and Trademark Office (USPTO). Actually, this court is supposed to help settle patent disputes cheaply and quickly. But that only sounds good at first glance.

Tech giants with very full coffers could now challenge patents not only in court, but also at the PTAB. In practice, this often means that the corporations are sued by smaller companies - and the tech giants apply to the PTAB to have these patents cancelled. How often does this work? Almost all the time! In total, 84 percent of patents have been declared at least partially invalid!

That's because before this chamber, the evidence requirements are not as demanding as in court and the corporations are allowed to try several times. Above all, however, it has to do with the fact that the patent holders have to raise around $500,000 per challenge. Google laughs at that pocket change, but a small start-up doesn't.

The planned bill now plans to relax some of the protections intended for the "little guys". New opportunities are emerging for the armada of lawyers in tech corporations! The Harvard Business Review stated:

If they succeed in weakening the U.S. intellectual property protection system, the consequences could be devastating for thousands of small, innovative startups - with catastrophic effects on the entire economy.

What do we learn from this?

If it comes to pass, the power of the big players will be further cemented and the potential of fresh new companies will be senselessly curtailed. Not only does this make an already unequal battle even more lopsided, but it also ensures less innovation. It is unquestionably unpleasant for Oppo that they are currently not allowed to offer their smartphones everywhere.

While we are working our way through these patent disputes among the media industry, tech lobbyists in the backrooms of Washington are making sure that small companies have less and less of a real chance to win such a dispute. That doesn't matter to you, you think, because you buy the iPhone anyway and not the Android phone from an unknown brand? Yes, that may be the case. At the moment, where three companies divide the smartphone world among themselves and are even stingier with already manageable innovations, we can talk again.

In any case, I could imagine that the Oppo lockout is just the beginning of many new patent disputes. And I'm afraid that it's the innovation that will be the biggest casualty. Do you see it differently? if so, feel free to write me about it in the comments. In any case, I see darkness ahead and sense a smartphone generation that will be even duller than the last one.