There have been for some time a collection of companies that gathers patents and then uses them to sue large technology firms. The issues are often unclear enough and cost of litigation high enough that the plaintiffs walk away with settlements
Beyond the patent-for-hire firms there is a growing amount of suits between technology companies. Nokia (NYSE: NOK) and Apple (NASDAQ: AAPL) are in a legal battle over certain cellphone software. Qualcomm (NASDAQ: QCOM) has spent tens of millions of dollars on disputes with rival Broadcom (NASDAQ: BRCM) and customer Nokia. Apple settled a case with Singapore-based company Creative for $100 million. The suit was for certain touchscreen patents that Creative claimed it had.
Perhaps the most serious and wide-ranging suit in the history of technology was the patent action brought by Microsoft (NASDAQ: MSFT) against open source OS rival Linux. Linux had no capital to fight the world’s largest software company. Microsoft wanted to avoid cross-charges for patents. The matter was settled out of court
The latest patent battle pits Oracle against Google. Oracle claims that Google’s Android mobile OS contains certain intellectual property patented by Sun Microsystems, a company Oracle recently bought. The patents are on the widely used Java software.
The suit is not much of a gamble by Oracle. If its assertions are not supported in court, it walks away with nothing more than a rejected claim. The stakes are much higher for Google. Android is its most important project since it built its core search technology. The software is used on dozens of phones and other portable devices. Its global market share recently passed the Apple mobile OS used on the iPhone and iPad. A patent judgment against the IP of Android could be devastating based on what Oracle chief Larry Ellison is willing to take as a settlement.
The Oracle announcement casts a long shadow over Android, which may make it less likely that handset companies will use the OS. And, a successful lawsuit could wreck the fortunes of firms like HTC and Motorola (NYSE: MOT), which have already based the software of many of their models on Android.
The courts have never set a ready method to explore the issues of legal actions regarding IP. Software may be a combination of new inventions with old. Google recently bought On2 Technologies, which builds video software which compete with that of a huge patent pool. There is some chance of litigation from that acquisition.
Google has gotten so big that it can never keep track entirely of how its new products are built. And, that may cost it a great deal.
Douglas A. McIntyre