A jury ruled on Wednesday that Apple must pay $532.9 million for infringing on three patents owned by a firm that could serve as a textbook definition of a patent troll. Smartflash LLC had essentially claimed to own the idea of selling stuff with smartphones, arguing it was entitled to a share of all iPhone sales as a result.
Apple and plenty of other technology experts see the verdict as absurd. But what the case says about Congress is actually more frightening than its implications for the judicial system.
American lawmakers have spent a decade trying to figure out how to curb lawsuits from patent trolls — companies that don’t make make any products, but make money by suing or threatening to sue companies that do, using poorly defined intellectual property claims to make their case. Patent lawsuits are a drain on innovation — they discourage the development of new ideas and create major financial hurdles for startups. There are enough vague patents out there that almost anything a new company comes up with could be challenged in court. And even if a startup wins the suit, it has to devote years of time and mountains of legal fees to the process.
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PhRMA eventually won the battle. It’s always easier to preserve the status quo on Capitol Hill than to actually reform something. But now, the consequences are playing out in the American economy. Big tech companies have largely given up on a public policy solution, and armed themselves with huge arsenals of patents, which they can use to sue or counter-sue firms both large and small. Apple has been particularly aggressive with Samsung, winning judgments worth more than $1 billion over smartphone-related patents that it claims cover even the shape of app icons. Samsung is appealing the judgment, just as Apple is appealing the Smartflash ruling.
Pointless, expensive fights over nothing are now commonplace among major tech firms. Congress, in other words, has remade the American economy in its own awful image.
