Patent cases color mobile market, to continue in 2013

Over the past year, patent battles have been fought by tech companies in courtrooms all over the world. The litigation is far from over though, however, and will continue throughout 2013. This is what's at stake on the patent battlefield in the near future.

The patent brouhaha reached its high point in August when a California District Court jury awarded a US$1 billion victory to Apple in a patent trial against Samsung over tablets and smartphones. Samsung is appealing the verdict and the two companies are continuing litigation in other countries too.

In Germany for instance, Apple and Samsung are still locked in several lawsuits over numerous patents. Apple for example asserts multiple touchscreen patents against Samsung in the German courts. On its part, Samsung is suing Apple in Germany and other E.U. countries over patents it claims are essential to certain telecommunication standards.

While Samsung recently announced that it was dropping requests for bans on sales of Apple products on the basis of those standard-essential patents, its lawsuits accusing Apple of infringing the patents are still in place and will continue in the next year, according to the company.

Samsung, however, is not the only company accusing competitors of infringing patents it has declared standard-essential.

Ericsson for instance filed two lawsuits against Samsung in the U.S. over patents which it claims are essential to implementation of a number of industry standards. The Swedish telecommunications equipment vendor said it had negotiated for over two years with Samsung to reach a licensing deal on fair, reasonable and non-discriminatory (FRAND) terms, as is often agreed to among telecoms companies.

When competitors can't agree on what is a fair and reasonable licensing price, disputes are often taken to the courts. To force Samsung to pay up, for example, Ericsson decided to target a variety of Samsung products such as cameras, Blu-ray Disc players and televisions, but also phones, including the Galaxy S III and the Galaxy Note II.

The judge of the U.S. District Court for the Eastern District of Texas where the suits were filed could eventually decide to ban the sales of those Samsung devices in the U.S.

Shortly after the lawsuits were filed in Texas, Ericsson filed a similar complaint with the U.S. International Trade Commission (ITC), asking for an import ban of a wide range of Samsung products, including the Galaxy S III and the Galaxy Note. Both those cases will be dealt with after Jan. 1.

Another relatively new player on the patent battlefield is the patent heavyweight Nokia. Last May, Nokia filed patent claims in the U.S. and Germany against HTC, Research In Motion and ViewSonic alleging these companies infringe a number of patents. Nokia, which ceded its top spot in mobile phone shipments to Samsung this year, said it was suing the companies because they do not respect Nokia's intellectual property by using its inventions without paying licensing fees.

Until then, the company had mostly stayed out of the patent wars, which have mainly been between the Android camp and Apple. Last November, it became clear that Nokia too would seek sales bans of certain products when it was revealed that it wanted to block sales of some RIM products with wireless LAN capabilities.

RIM thought it wiser to stop disputing Nokia's intellectual property and settled the patent row this Friday, when the companies announced they had entered into a new patent license agreement, ending all litigation between the vendors worldwide.

While litigation between Apple and Samsung continues, the focus of litigation in the smartphone industry could very well shift to other players, said Mark Newman, chief research officer at Informa Telecoms and Media's industry research division. It appears that relationships between the "biggest winners" in the smartphone industry are becoming better.

The major patent disputes in 2013 could very well be between second-tier smartphone vendors and the two big ones, he said.

"It will be particularly interesting to see if the more distressed handset vendors like Nokia are coming to see their patent portfolio as more strategic assets," said Newman.

Since Google bought Motorola Mobility to enhance its patent portfolio, companies like Nokia started to look at their own patents as a way to make money, he said. In 2013 there could be a tendency from the old handset makers that are less successful in the smartphone industry to start using their patent portfolio more.

China could also become a factor. "We expect to see further growth in the Chinese device sector," Newman said, adding that those vendors are likely to start exporting these phones. "It will be interesting to see if they start taking licenses," he said. If they don't, lawsuits would be a likely result, but they might be hard to win in China's home market, Newman added.

Consumers could very well pay the price for ongoing smartphone patent battles. Clearly, large patent dispute payouts add to the overall costs consumers pay in the market place for a smartphone today, Newman said. Although, for now, consumers seem to be willing to pay high prices for smartphones because they are so desirable, he added.

Big patent disputes will be as common in 2013 as they were in 2012, Newman said. "There is really no end in sight," he said, adding that there is always going to be a huge amount of innovation in the mobile industry, and people will keep wanting patent these innovations to protect them, he said.

The patent wars therefore will "absolutely continue", Newman said. "At least, for the foreseeable future."

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com