Snigdha Roy, a 3rd year student from GNLU, brings us her second submission in our SpicyIP Fellowship applicant series. In this post, Snigdha looks beyond the press statement made by a certain Indian mobiles devices company to examine a possible trend that may be starting in this sector.
LAVA aims for 100 Mobile App Patents
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| One of the earlier cases regarding cell technology involved Star Trek! |
Necessity is the mother of all innovations and innovation is the key to success. To survive the highly competitive telecom market and carve a niche in it, innovative products are what make the difference. According to the Mobile Business Statistics for 2012, published by Forbes, 1.2 billion smartphones will enter the market over the next 5 years, and by 2015 mobile app development projects will outnumber native PC projects by a ratio of 4-to-1.
India has one of the fastest growing telecom markets in the world. According to the data released by Telecom Regulatory Authority of India (TRAI), India’s telecom subscriber base stands at a whooping 935.18 million (read here). With more than 150 device manufacturers in the Indian mobile phone market wooing the customers is a task. With this ever growing market there is also a substantial increase in the number of patents filed in relation to mobile phones. This post looks at the recent press release by the Indian mobile devices company Lava which aims at filing 100 patents and also tries to analyse the trend which is followed by mobile application developers.
Mr. SN Rai, the co-founder and director of Indian mobile devices company Lava International, in an Economic Times report, said: “We have realized just by selling handsets it is not possible to maintain growth momentum. Innovation in product is key to survival. Our wish list is to make a century of patents in the next 2 to 3 years.”
The company has plans to work on building up its patent portfolio. In pursuance of the same, Lava has earmarked about INR 500 million (US $ 9 million) to focus on and encourage the development of algorithms and applications (read here). In an effort to accomplish its highly ambitious goal, Lava has also decided to double the capacity at its research and development (R&D) centers in India and China in terms of headcount, facility and application development.
The company has already filed two patents for algorithms but they have not been granted yet. [Editor’s note: As per S. 3(k), algorithms are not patentable in India] Over the past few years Asia has seen a steep increase in the development of Intellectual Property. There is a rising tide of innovation from the region which has enhanced the number of applications particularly in mobile apps and social media (Read here).
With Lava setting a goal as high as 100 mobile app patents, the importance of Intellectual Property in today’s race for the best gets highlighted again. But the question which one is bound to ask is whether it is possible? Too ambitious a plan? Maybe or maybe not.
Today there seems to be an app for everything, so technically one has to come up with an innovative application which has not been thought about and most importantly patented, by any other player in the market. According to a study compiled by Chetan Sharma Consulting, The percentage of mobile patents granted also is getting bigger as compared to the total number of patents granted. The report states that in the US, one out of every five patents granted in 2011 and in the first quarter of 2012 was related to mobiles, which included mobile applications, hardware etc. Apple alone has around 1,298 mobile related patents as reported in a study by Thomson Reuters.
According to the author of a very interesting article that I came across, it seems that the current patent strategy of many technology companies is to patent everything and see what sticks. The main reason behind this trend is the granting of patents for vague algorithms and business methods, like a software system for calculating online prices, without patent examiners demanding specifics about how those calculations occur or how the software operates. Due to this some patents are so broad that they allow patent holders to claim sweeping ownership of seemingly unrelated products build by others. So often companies are sued for violation of patents they never knew existed (read here). The classic example of this was the deal which took place in the year 2006, between Apple and Creative Technology, a Singapore-based company. In 2006 Apple had reluctantly agreed to pay $100 million to Creative Technology for its broad software patent of a “portable music playback device” that had minor similarities to their iPod which had gone on sale the same year. Apple had settled three months after Creative had gone to court. While announcing the settlement Mr. Steve Jobs that, “Creative is very fortunate to have been granted this early patent,” (read here). Since then Apple seems to have decided to file a patent application for any viable idea that it has.
With the growing usage of smartphones, mobile apps have gained great demand. As of September 2012, Apple’s App Store counted more than 21 billion downloads in 2012, which is a 74 percent increase over 2011, according to Gartner Research. But with the growing smartphone market there is an equal increase in the smartphone “patent wars” which involves the top device and software companies including Apple, Samsung, Nokia and Google among many others. With most of the top companies caught in a headlock over their patents, the question is whether patentability of every innovative idea is a boon or it stifles innovation as companies have to involve lawyers at every stage of development, making the creative process flow with the speed of molasses (read here).
Lava’s decision to develop a century of apps seems like its bid to gain a larger share in the ever booming mobile market but whether it will be able to achieve its target without falling prey to the ongoing “patents war” is something to wait and watch. If Lava does decide to follow the trend of patenting all that it can think of then maybe 100 is an achievable figure. However the effect of such patents is far from desirable. The patent system everywhere is overflowing with applications where examiners painstakingly research thousands of applications and the bogus applications clog the systems.
Ms. Heinen, the former Apple general counsel reportedly said here, “When patent lawyers become rock stars, it’s a bad sign for where an industry is heading,” she said, adding that she had no issue with the lawyers themselves.
Somewhere in the race to be the best, quality innovation is taking the backseat. Without patents, one may never be able to justify spending fortunes on new products. However if a company is forced to invest equal amount of money and time to defend its applications and innovations then innovations will definitely take the hit.
This blog posting ignores the reality of patent pools for certain technology areas – especially in mobile communications, electronics, computers, etc. The filing of many patent applications is a way of securing a larger proportion of the patent pool – which provides a virtually guaranteed royalty stream in the future. Thus, selling products in-and-of-itself is no longer sufficient – you have to have a portion of the patent pool so that your competitors are forced to pay you, otherwise you will only be paying royalties (probably to your competitors), and not receiving them.
This is a structural difference in the computing/high-tech/mobile industry vs. every other industry such as, for example, Pharma, widget manufacturing, etc.
Thanks for information. I like your blog about mobile apps patent. I really enjoyed to reading this..
Thank you for your comments.
Mr. Ryan Wilson i really appreciate your positive response.
Mr. Michael Lin i never intended to undermine the importance of patent pooling or patents in general. I only wanted to throw light upon how patent litigation is on a rise which might take a toll on the ingenious patents. According to public filings, as reported in an article, last year spending by Apple and Google on patent lawsuits and unusually big-dollar patent purchases exceeded spending on research and development of new products. I have not at all touched the topic of patent pooling which is most certainly a very important in case of mobile patents. I just wanted to discuss the possibility of companies filing bogus patent applications which maybe stalling the patenting process and also leading to law suits.