Patent Infringement Cases - Essay Example

There are many things, which came into the world of business with introduction of new technologies. One of such issues is patent infringement. There were many cases of patent violation before internet, however, with internet and spreading of the information technologies, stealing of important information became easier(Arthur, n.d.). Thus, there are many protective measures, which can defend company from unfair competition and unauthorized adoption of technologies of other company. The main measure to protect brand and company’s competitiveness is patent(Arthur, n.d.). It is used to claim the invention or some new feature in the world. Patent helps to avoid stealing of invention, as patent infringement is tort issue and can lead to trial that will be aimed on restoring of the brand image and getting all revenues back, which were acquired by the application of the patented invention. Furthermore, patent infringement can be willful and accidental(Cohen and Merrill, 2003). The first way of patent infringement is treated as the deliberate act of inflicting damage to company or getting revenues from the company’s invention. Accidental patent infringement can be associated with invention of the almost the same thing that was already invented, such cases are not considered to be stealing of the technologies, and solved by the companies without trials(Busche, Trimborn and Fabry, 2010).

Patent infringement is quite important thing in the modern business, as many companies invest in innovations, they hire professionals, who are unique for some company and they are like the investment of company in some production facilities. Good inventor can generate many ideas, which will be introduced and integrated into the products of company to increase its revenues. Large international companies, which compete with other similar companies should work hard on protection of their patents, as it can provide the advantage to other companies and make all investments in innovations useless. Furthermore, purchasing some patents, company can maintain additional source of revenues through the license costs, which are paid by all companies, which use the patent in production of their own products. It works just like the franchising agreement that binds franchisee to pay royalties for using brand signs and other associated things. Speaking of the major patent companies, one should not confuse them with the patent-trolls, which use the patent legislation to get money from large companies, which used some invention of the dead company(Copeland, n.d.). Such patent-trolls use these patents to manipulate such companies and cripple their activities through never-ending trials discussions of the invention, etc. Latter ones are developed to use the breaches in the legislation, while patents being fairly used can save the company or profitability of some particular department. Analyzing the importance of the patents, case of Apple will be described to find out main issues, which cause problems for businesses and how such problems can be solved. Furthermore, positive, as well as negative outcomes will be analyzed to get more ideas on how patent system can help company to win the competition and increase its own profitability rates(Copeland, n.d.).

Apple is international company that is working on the development media devices, mobile communication PCs, variety of portable devices, etc. All these products are offered since 1977-th when company has been incorporated. Furthermore, company offers variety of applications, services, peripherals, etc(Cusumano, 2013). Thus, range of products and services of Apple is quite wide. There are many companies, which compete with Apple, among them Microsoft, Samsung, Google. All these companies develop almost the same products, however, aware of their personal developments and defend their rights to have the exclusive right to sell their products. There are many cases, when some companies exchanged their technologies for royalties. However, since the development of the mobile technologies and high demand for such products is constantly rising, companies should work more on innovations in this sphere to get the competitive strength and to attract more customers(Cusumano, 2013). Thus, patent infringement cases here are treated as deliberate try to damage competitor. Samsung, being the main competitor of Apple in the sphere of the mobile devices is claimed to violate the patent rights, hence this company is working in the same market, they are absolutely interested in the patent infringement. Thus, Apple emphasizes the fact that Samsung does it willfully, because invention of stolen technologies cannot be occasional. Technologies ,which were stolen by the Samsung belong to the making use of smartphone easier. They cannot provide some substantial advantage of for company to use them, though, patent infringement cases are quite fruitful for Apple(Cusumano, 2013). Firstly company eliminates the claims from opposing side, as it can be threat to claim for more infringement if they take place. Furthermore, result of the trials in case of the successful outcome can be quite positive in the form of the additional revenues. And the third reason to be involved in patent cases is associated with modern press coverage of the main events in the world. Thus, Apple can influence customers’ behavior through showing that Korean company playing business game unfairly and trying to steal some patents. It can make customers more loyal to Apple and to eliminate all the shortcomings associated with growth of the competitors due to the application of the stolen technology(Cusumano, 2013).

Many modern companies use the patents as the way to manipulate other companies or even all the market to get some competitive advantage. Thinking of the case of the Apple vs Samsung, one should also underline the fact that Samsung is purchasing patents from the Hitachi, and they are used as the strong weapon against the Apple. It can make Apple be careful with the patent infringement cases(Jaffe and Lerner, 2007). In response to the Apple’s claim, Samsung offered the case of Apple own infringement for consideration. Thus, Apple will be forced to pay some part of the benefited revenues from the last trial. Furthermore, purchasing more patents can make Samsung strong in this sphere to prevent Apple from trials and activities, which can undermine Samsung’s brand image(Jost, 2006). Thus, patents can be used for defense from the activities from other companies. Furthermore, they are mostly used to defend the brand and to preserve its image, as customers due to the efforts of press can be reluctant to purchase products of the unfair suppliers that was caught to steal technologies. Furthermore, original supplier of the technologies can get substantial advantage over the competitor. To prevent such activities companies can use the patents to show that they can also use trials to defend(Lee, 2012).

There are special companies, which make their businesses through the purchasing patents from the dead companies, or dead companies itself can use their patents after a while to take some resources for their growth. One of such companies is Smartflash. It has low turnaround and almost zero sales, due to the lack of resources and competitive strength, however it has many patents, which were partly adopted by the other larger companies. Using patents as its own advantage Smartflash is working on trials against Apple, since it adopted some technologies, which belonged to Smartflash and authentic patents, which prove that it is Smartflash that invented them(Recent trends in patent infringement lawsuits, 2012). Under such conditions Apple is forced to pay around $532 million to cover the damage that is caused by application of its technologies. In case of the deliberate application of the technologies, company should pay all revenues, which were made with application of this technology or average payment for complete license to sell the products with such technologies without royalties(Recent trends in patent infringement lawsuits, 2012). Though, Apple is not accept the guilty for stealing technologies, it should pay high amount of money to the Smartflash, as the patent infringement is almost proved. They say that Smartflash has no employees and income, so they cannot be treated as the real company that could invent something important, thus, their claims for reparation of damages are useless. However, even little companies, which have invented something can face problems struggling with larger companies, as they have stronger lawyers, they have high influence and can decrease the amount of costs, which they will pay for trial. However, companies like Smartflash, which work till the end can manage to win the trial and get additional revenues for development and becoming company which need to be settled accounts with.

Despite the fact that most little companies cannot produce the substantial resistance to the larger companies, there are companies, which purchase some of the patents and live only for the revenues they get from trials. Companies, which have weak patent system often lose to such patent-trolls, which have studied variety of possibilities to win the trial. Such misuse of the legal procedures can seriously undermine the overall performance and strength of patent system; hence there are no controlling organizations which will define whether the pretensions are fair(Snoeyenbos, Almeder and Humber, 2001). Case should be studied by the court that should take responsibility to study the company that claims and defendant one to know who is right. However, in this case one of the parties will win and will get the opportunity over another. Even in case of the true pretension, one company become good in the view of customers, while loser party is treated as bad company that deliberately steal technologies. Cases among international giants in industry end with great outcomes for both parties. In the result, winning party gets many competitive opportunities.

Summing up, large companies, which compete with each other, get multiple opportunities, winning the trials, they get money from losing party. It is one of the benefits, which provide more resources for company’s development. Lose of trial will result in disappointed customers and bad corporate image, since customers will learn this issue after few days and that will influence their buying pattern. Mostly, customers are reluctant to work with companies, which deceive and steal something, even if this case has no connection to their own life. Deceiving companies will never get the same support from customers as trustworthy(Snoeyenbos, Almeder and Humber, 2001). Apart from this, winning case of patent infringement can produce substantial opportunities over competitors. For instance, Apple has got more loyal customers who shifted their buying patterns from Samsung. It provides more revenues and possibilities to develop. The main reason why companies engage in patent infringement cases – they want to keep their work secured. Intellectual property and technologies are important commodities for company, thus stealing of them equally matched with stealing of some resources or capitals. Protection of such commodities can provide the exclusive right for some company to have competitive strength. While in the case of the unpunished theft of technologies, competitive company can get the same technologies and get even higher opportunities in the market. It is important to understand that all benefits, which can be produced by the brand are important, thus, they should be used by their owners. Securing ownership is impossible without the patent infringement cases, as even having the patent cannot prevent other companies from stealing technologies(Snoeyenbos, Almeder and Humber, 2001). Occasional infringement can be discussed and companies will find the resolution without trials, however, deliberate stealing of technologies should be punished, just to keep the strength of company on the same level as before. Most companies invest enormous resources in innovations, thus, they want to cover all expenses, which were expended. Getting the same technology, other company can get customers and decrease overall sales of the product that has been improved with invention. Thus, most companies, which work on the market secure their right to produce the products with their unique license, other companies, which want to use the same technology should pay royalties for each product that has been produced with application of technology. It produces one more source of revenues and can help to maintain good relationships with other companies, which are not competitors. Thinking of the latter companies, in case of Apple, patent infringement by the Samsung is quite strong attack against the Apple that could result in substantial drops of sales. It was prevented by the trial. Furthermore, patents can help to get strategic opportunities by using the patents to manipulate other companies, hence patent infringement court hearings are not so positive for companies, being afraid of such outcome company can refrain from doing something bad to other company. It is illustrated by the case of Samsung that put forward their own claim against Apple to make them understand that such games will get negative results for both parties.