Monday February 21, 2011 – Myra Moore
Why licensing smart phone IP is a lot like making sausage
Watching the sausage being made may be unappetizing but if you plan to sell it to your customers you’d better understand how to get all the ingredients in the casing without it falling apart.
The smart phone and its cousin the tablet have more standards-based and proprietary technology stuffed between their hard casings than any gadgets ever made. Open standards alone make up a dizzying list of technologies that go into the devices -- Wi-Fi, Bluetooth, GSM, MP3, JPEG, AVC/H.264, just to name a few. Proprietary technology lists are just as long. Acquiring the rights to use these technologies is complicated and often times contentious given the red-hot patent litigation currently in play (a mash up of companies like Apple, Nokia, Rim, Microsoft, Motorola, HTC are all in various stages of litigation amongst themselves).
This situation got the spotlight at a panel I moderated February 10 in San Jose at a Licensing Executives Society (LES) conference that was focused on high-tech industries. Gathered together were representatives from Rim, Nokia, Garmin, Intel, the Open Patent Alliance (OPA), and outside counsel involved in some of the aforementioned litigation. Clashing corporate/IP cultures, late entrants by device makers, emergence of non-practicing entities (NPEs), and a thicket of technology licensors from individual companies and patent pools were pegged as contributors to the messy IP landscape in today’s hottest consumer technology product category.
Now that most of the obvious suppliers have jumped into the smart phone and tablet markets we should anticipate a leveling off of new litigation. Right? Apparently not, according to our panel of experts. The lawyers and the licensing folks were in agreement: It is going to get worse before it gets better. Why? There are hundreds of patented technologies in each one of these devices, the stakes are extremely high as all the players (and there are many) jockey for market share position, and the demand for innovation for user interfaces, software, batteries and displays promises to keep the Intellectual Property (IP) folks busy for years to come.
When asked how the confusion and contention regarding licensing all the IP that goes into these convergence devices can be mitigated, the panelists offered a seemingly simple answer: Cross licensing. That should be easy. Right?
