"The RIM case highlights the need for urgent patent reform to protect users."
The most talked-about patent dispute of recent times, that of Research in Motion (RIM) versus NTP, ended in a whimper rather than the cataclysmic shutdown predicted by some market watchers. In many ways the outcome is no surprise: by settling the case, RIM is following a well-trodden path of paying off the litigants in patent disputes.
But the level of excitement – bordering on hysteria – generated by the case has meant the furore has not died down. The very fact that the case lasted so long shows there is a need for patent reform, it is argued: “We’re the poster child as to why there needs to be patent reform,” says Tom Sanchez, the chief patent counsel for RIM.
The problem, it is argued, is that unscrupulous ‘patent trolls’ – a term coined by Intel’s lawyers after the chip manufacturer became embroiled in patent disputes – are seeking to benefit by taking out patents with no intention to manufacture products, but to use them to gain from the innovators that create consumer demand.
So is the patenting system flawed or is it still succeeding in protecting the small companies from giants wanting to exploit their ideas for their own profits? The evidence from companies such as IBM, Hewlett-Packard and Intel seems to refute this notion: these vendors dominate the list of top ten US patents that are granted.
The RIM case dominated the headlines in part because of the threat of interruption to, or even cessation of, an immensely popular service. However, according to analyst group Gartner, if there is any damage to the vendor, it will only be short-lived. In a research note it concludes: “The uncertainty appears to have affected RIM’s revenue projections, but Gartner does not believe this uncertainty, or the settlement, will weaken the company financially.”
Despite this, RIM chairman and co-CEO Jim Balsillie, has joined the calls for revising patent laws, which are “urgently needed” to prevent businesses and consumers from being caught up in similar disputes.
Simon Gentry, the secretary of the pan-European Innovation and Creativity Group, believes that the patent system is the best way to promote innovation.
“The IT industry requires vast sums of money for R&D and the only thing an entrepreneur has to protect him is his intellectual property. People don’t invent things purely because there is a patent system, but undoubtedly that system does encourage them to foot initial creative costs because they know they’ll be protected and make their money back.
"The age we live in is probably the most rapidly developing in terms of technology in history: technological progress is made so swiftly with the current patenting system, you can’t tell me it’s broken.”
IBM senior vice president John Kelly says the patent system is flawed, but is vital nonetheless if users are to continue to benefit from innovation.
“There is work to do to improve the quality of US patents, and we work with the Patent Office and Open Source Development Labs on initiatives for reviewing patent applications and establishing a patent quality index which would give prospective patent-holders a good indicator of how strong their application is. Raising patent quality will encourage people to innovate and prevent over-protection.
"Inventions involve a lot of time, effort and frustration, and it is a major investment to dedicate time to develop new ideas.”