Are Apple’s Competitors Stealing Its Patented Inventions?

The Apple patent suit against HTC really riled up my friend Sawyer.  I wasn’t planning on posting another missive from him until next week, but I thought this was particularly timely given the public statement from Apple, including a specific quote from Steve Jobs about its competitors stealing their patented inventions.  Sawyer explains why this is simply inflammatory rhetoric and actually has no basis in fact or the way patent law works.  He also makes the case – using this as an example – that patents stifle, rather than promote innovation.  Enjoy.  And, after you read this, if you want a little “doesn’t this sound familiar” action, take a look at the Wikipedia page on Apple Computer v. Microsoft Computer with regard to the GUI – with a little Xerox tossed in as a side dish.  And now, my friend Sawyer.

The other day Apple announced that it is suing HTC for infringing several patents related to the iPhone, including patents on the UI, i.e., software patents.  As part of the press release, Steve Jobs said the following (emphasis mine):

“We can sit by and watch competitors steal our patented inventions, or we can do something about it. We’ve decided to do something about it. We think competition is healthy, but competitors should create their own original technology, not steal ours.”

The rhetoric of "stealing" and "theft" surrounding accusations of patent infringement is bothersome, both because substantive patent law doesn’t embrace the concept of theft, and because most patent cases don’t involve credible allegations of actual theft or even copying. 

Plaintiffs try to use "theft" to inject a moral element into patent suits, but there is no substantive moral element in patent law.  The point of a patent is to grant a monopoly in exchange for public disclosure, and patentees want people to use the ideas (in exchange for license fees), otherwise the public disclosure aspect is pointless.  The Constitution doesn’t authorize patent or copyright law for moral reasons either:  “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries…” 

The only doctrine in patent law that shades into morality is willful infringement.  The shifting law on willful infringement will be the subject of another post, but in any case, willfulness isn’t a morality doctrine; willful infringers aren’t bad people, they are just people who decided to continue possibly infringing because they didn’t think they infringed, thought the suit was frivolous, or thought they would lose more money by stopping, at least in the short term.  The doctrine is set up to penalize people who recklessly infringe by potentially trebling damages, and so acts as an incentive to settle suits and pay licensing fees.  This isn’t a moral calculus, it’s a utilitarian one.

Willfulness, however, acts as the main vehicle for plaintiffs to inject moral rhetoric and copying allegations into a patent suit.  “Copying” in a patent law sense means that an infringer either literally read the patent and copied what the claims said wholesale, or saw a product embodying the patent and copied the patented aspect of it.  Copying in patent law does not mean “theft.”  Theft of secret ideas is actionable under trade secret law, and I know of very few cases pairing the two.  Literal copying is often actionable under copyright law as well.  Isn’t it the case though that patentees want people to copy?  Doesn’t copying mean that their ideas are spreading and being used for follow-on innovation, which are good things?  The issue if anything is proper compensation, not the act of copying itself.

Unsurprisingly, we don’t usually even get into copying as a consideration.  A paper by Mark Lemley and a good blog post titled Patent defendants aren’t copycats shows that the vast majority of patent cases don’t involve an assertion of copying (and we’ll have to see if the Apple case does).  Putting in place an independent invention defense to infringement, as suggested recently by Brad Burnham at Union Square Ventures, would potentially wipe out 90% of patent cases. 

Setting all of that aside, in my experience, when plaintiffs do allege copying, particularly in software cases, the allegations are uniformly flimsy and bogus litigation tactics aimed at getting “black hat” stories about defendants told to juries.  And it’s a great tactic because juries are people, and regardless of the merits, they like to stick it to the bad guys, especially so where the merits are boring patent law issues that no one understands anyway.

Now we have one of the biggest and most innovative companies out there, Apple, trying to sue one of its competitors out of the market with patents, and using the false rhetoric of theft to justify the suit.  This underscores that the patent problem isn’t just "trolls" versus "big companies," it’s big companies using patents to sue others in the same market into oblivion, cutting off competition and destroying innovation.  Imagine, if HTC weren’t making great Android phones to compete with the iPhone, would Apple be incentivized to significantly improve its products?  Would we have no iPhone if patents didn’t exist?  I think it’s fairly obvious that in the absence of patents, we would have more competition and more innovation here, not less.

In any case, the takeaway for reform advocates is that we need to shift the rhetorical frame in discussions around patents from the moralizing of "stealing" and "theft" to what the issue actually is, a dry utilitarian calculus about what outcomes are better for innovation and competition.  When we think about the issues in that frame, it sort of takes the wind of out of Steve Jobs’ sails, doesn’t it?

  • http://intensedebate.com/people/KevinVogelsang KevinVogelsang

    Whether it is actually considered "theft" or not (in this case I think this was willful infringement), it is a moral issue. All issues of law are a moral issue.

    Sure, we'd have the iPhone without patents. But would those HTC phones have as great an interface without the iPhone? Certainly not. Whether we say "stealing" or "copying," doesn't make a difference. I suppose the point is that this injects unqualified morality into the debate. But, this takes me back to the claim that all issues of governance are a moral issue.

    That said, I agree patent reformers should focus on the utilitarian calculus of spurring on innovation and competition. This is the rhetoric they should be using, just as Jobs is using the rhetoric he should be using.

    Inventors should be compensated for their inventions. But, I think they can be compensated without stifling innovation and competition. If Apple is compensated, but the phones are on the market, are competition and big incentives for innovation no longer present?

  • scott

    I read an interesting theory on Ars Technica (can't find the article at the moment) about this very subject: As you know, Apple is being sued by Nokia for iPhone-related patent infringement. In return, Apple counter-sued Nokia for patent infringement. The theory is that by suing HTC (possibly for infringing on the same patents as the ones on which the Nokia suit is based), they are simply strengthening their case against Nokia and that is their true motivation. If true, you can blame Nokia for all of this. :-)

    Which brings up a good point… why isn't Sawyer in an uproar about Nokia suing Apple prior to this whole HTC thing? Is that somehow less egregious? Or is it that people aren't passionate about Nokia so it never gets the same kind of attention?

  • http://intensedebate.com/people/rickgregory rickgregory

    But is HTC innovating? While I'm not about to get into the legal niceties on this since I'm not a lawyer of any sort, it seems to me that substantial copying of A by B can't be defended as innovation, so I don't see that argument in this case. Where's the line between substantial copying and exact copying? Don't ask me… but a multitouch interface that uses most or all of the same gestures seems like a copy to me whether or not it meets the legal definition.

    Let's be clear – I think most software patents are silly, the USPTO grants far too freely and Apple's making a mistake with this suit. But using this case to argue that patents limit innovation doesn't work. How is, say, an Android implementation of multitouch an innovation? What we've seen is predictable and exactly what I thought would happen when the iPhone became a hit – instead of realizing that there was a great thirst for usable, connected interfaces everyone looked at the iPhone and said "Ohh it's a hit – let's do what they're doing!!" and so we have a disheartening flood of 3.5" screen touch phones that directly compare to the iPhone. So… where's the innovation here?

    The rest of the post… meh. Jobs wasn't speaking legally, that was a PR quote meant for the general public. Getting worked up about a PR quote that slants the debate toward the party giving the quote is a waste of emotion.

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  • http://www.mobilityhacks.com chrispian

    Didn't both Apple and Microsoft 'steal' the GUI concept from PARC/Xerox? Apple is now doing exactly the kinds of things all big companies do. I'm really disappointed because I love the products but the brand is one I no longer like.

  • http://intensedebate.com/profiles/ Anonymous

    I agree with several commenters that this issue is somewhat tangential to the discussion of software patent validity / reform.

    People seem to be missing some of the finer points of the article though. The point wasn't to figure out if HTC is "stealing" vs. "copying" — the point was that patent law doesn't care if you stole, copied, invented something similar independently, invented it first but forgot to patent it, were inspired by the idea but invented your own that only looks similar, or the patent is too broad and should never have been granted in the first place. The law only cares that there's a patent, someone is doing something the same way, so cash must change hands. The punitive stuff only comes later once the defendant knew they were infringing. So coming out and stating that someone "stole your invention" before the court has even weighed in on the matter, and even after infringement has been verified, is purely a competitive tactic and no more "moral" than the tactic of one company parroting another company's product features.

    It's true that the comments by Steve Jobs are mostly for PR, but the article pointed out that these tactics end up being brought into the courtroom as well. If you think of Jobs' statements as trying to influence the feelings of potential jurors before a legal proceeding, it takes on a slightly more sinister tone — but no more so than all the lawyers you see on TV outside courthouses taking their case to the media.

  • eddie walker

    The "stealing" here is not a literal stealing of ideas, in the sense of theft of trade secrets or the like. The stealing here is a notion of redoing Apple's innovations, piggybacking onto them without due recompense, and thereby stealing what Apple thinks are its the fruits of that innovation — exclusive sales/profits derived from that innovation. To Apple, every infringing Nexus or Eris that HTC sells is an iPhone that should have been sold instead (or an Apple royalty that should have been paid). So it's not really stealing technology so much as stealing the fruits of that technology. Naturally, as a PR matter, the implication that Jobs wants to create is that HTC is just a bunch of copycatting scumbags who can't come up with their own ideas so they reverse engineer Apple's ideas the put them into HTC products. or, "stealing", in Jobs' shorthand.

  • http://intensedebate.com/people/bfeld bfeld

    Re: Nokia – I’m up in arms about it!  I don’t know Sawyer’s position, but guessing from our interaction, he thinks is awful as well.  It’s especially grotesque given the lack of innovation on the Nokia front for many years that allowed Apple to create an amazing product and dominate the market. 

  • Lawrence Ebert

    The issue of "copying" has been discussed before:

    Which brings up a final point. The reason patent infringement is strict liability is because the patent system is designed to encourage people to read patents, which reading makes such people "aware" of what is going on and which reading will guide them NOT to be infringers. The reason for having a patent system is public disclosure of information, to avoid continued
    re-discovery of wheels. Perhaps because Lemley hasn't figured that out (eg, Rational Ignorance), Mullin hasn't figured it out either.

    from
    http://ipbiz.blogspot.com/2009/07/mullins-prior-a

  • Jonas Maebe

    Yes. In fact, at least in a previous life Jobs had no problem admitting that Apple has/had no problems with "stealing great ideas": http://www.youtube.com/watch?v=CW0DUg63lqU

  • http://intensedebate.com/people/bfeld bfeld

    But if you’ve ever read a software patent, you know that there is rarely any public disclosure of useful information.  More importantly, most of the things disclosed are in the “obvious” or “non-novel” category, which makes them even more useless.  Furthermore, the lack of source code completely undermines the entire discussion!

  • Bill Mosby

    Ok, I'm being facetious here, but I'll say it anyway- you don't need the source code , you can just look it up in Knuth. My real point is that if the things disclosed are obvious, so is an implementation. And there sure are a lot of obvious disclosures.

    To me, though, the thing that grates the most is the fact that they all seem to be based on a fusion of two unpatentable things- the algorithm being disclosed and the "preferred embodiment", a computer. I wonder if you could also get a patent on an algorithm fused with an alternative embodiment, the human brain?

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  • Jim

    I believe the GUI was the creation of Alan Kay who was at Xerox PARC when he created it, but was frustrated over the lack of support for the interface by the Xerox executive team. He left PARC and someone told him to talk to the folks who were developing a new personal computer product line. Alan did just that and joined the Apple. He brought his user interface with him.

    So, I don't think that Apple stole the technology from PARC but used the technology that Alan brought along with him. Also, I don't remember Xerox ever claiming ownership of Alan's user interface.

  • sunmy

    In fact, it is the patentee (Apple) who has stolen the right of the public (HTC or Google) to improve their product. This is an in inevitable consequence of the patent system. When the technology has developed to a certain stage, new innovations will be definitely be created, by one or another. By obtaining patents a little bit earlier, Apple was actually stealing the right of the public to make or using the same invention.

  • eldernorm

    Hmmmm, so you are saying that it is alright for other companies to use Apple IP and not offer to pay for it. Of course, Apple gets sued plenty (in Marshall, Tx :-( ) for "stealing other companies ideas,,,,, like
    e-mail,
    electronic communication,
    etc, etc, etc.

    And the people in Marshall seem to like who ever is suing. It really does not matter that air has been around a long time, someone claims to have a patent to an invisible gas that is used to power cellular growth, so they have a patent on air.

    Guess I am just pissed over a very broken system that no one in government seems to want to fix.

    Just a thought,
    en

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