Apple CEO Tim Cook Thinks Patent System Is Broken

By | Jun 7, 2012
Addressing the rapid-fire world of patent lawsuits, Apple CEO Tim Cook has gone on record about his frustration with what he sees as abuses of the U.S. patent system. Speaking in an interview during the opening session of the D10 Conference, put on by AllThingsD, the head of Apple minced no words when asked whether he thought all the patent lawsuits were a problem for innovation:

"Well, it's a pain in the ass."

The tech landscape has become more thickly dotted with news of lawsuits over patent infringement in the past few years. It seems that fewer people are really making things and more are making money by suing people who actually are making things.

Tim Cook voiced wholehearted approval of the existence of patents in general. He says, "[Apple does not want to become] the world's developer [...] finishing the painting [...] only to have someone else sign their name to it [....] We just want people to invent their own stuff."

But on the other hand, he also bemoaned a particular kind of behavior that he felt was choking innovation: the prevalence of lawsuits over standards-essential patents, which he said was the vast majority of the lawsuits brought against Apple itself.

Standards-essential patents are those patents that are for components that end up being essential to other inventions. The intent of such a patent is not to lock other people out of using that material, but to allow for a licensing process to take place so innovation and development can happen around that patented item while still compensating the patent holder fairly. In fact, holders of such patents are supposed to license them out in a fair, reasonable and non-discriminatory way. This requirement is so ingrained in the patent processes that it has its own acronym, FRAND.

Tim Cook says that people are not doing this as it was meant to be done. They are refusing to license their patents out to developers of other products, leaving the door open for them to sue a large entity (like Apple) when such a company uses a patented item in one of its products.

Cook stated Apple's stance on this in no uncertain terms: "Apple has not sued anyone over standards-essential patents that we own because we view that it's fundamentally wrong to do that. This was never the intention of the standards-essential patent."

Not only is the abuse of standards-essential patents a stifling problem, but so too the existence of "patent trolls," entities that buy and hold patents with the express intent of using them as a basis to sue innovators, who may use something similar to the item the trolls hold the patent on.

Some of these patents are so vaguely worded as to be laughable. Some were secured many years before products using their level of technology even came into being. These include patents that refer to using a stylus on a computer screen. Someone actually tried to sue for such a vague item.

When companies that want to invest in innovation have to spend time defending themselves against frivolous but complicated suits, the cost of that activity has to be absorbed somewhere in the company's structure. You can bet it won't be by shareholders, but rather by consumers.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.

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