October 31, 2018
Microsoft has a history of using their might to exert dominance with regards to patents and are well known for their IP assertion. A search for patent litigation finds Microsoft filed over 50 cases as plaintiff, which is more than Apple or IBM. However, there appears to have been a change of approach lately, with them launching a protective IP scheme for Azure cloud users. But now Microsoft has gone one step further and signed up to two patent pool/protective licensing schemes, the Open Innovation Network (OIN) and License on Transfer Network (LOT).
Why it Matters
These networks are seen as measures to protect smaller businesses. OIN was devised as a way of shielding Linux and other open source software, which are rivals to Microsoft. The LOT has a strong Google association, with the idea being that if a patent from a LOT member is sold to an NPE then all the other LOT network members automatically get a license to protect them. Given Microsoft used to have investments in a major NPE, this indicates the cutting of ties and moving to a more friendly, protection-based approach to their IP.
While US litigation is in decline, China and Europe look to be taking up the slack with both jurisdictions showing growth. A recent publication from IAMgives some insight from an NPE who has just filed 10 suits in China. They, and another NPE, are citing the PTAB as the reason for developing operations outside of the US. However, China isn’t without its equivalent, and the Chinese Patent Reexamination Board (PRB) could present the same issues. Reexamination requests are reportedly only hundreds of dollars.
Why it Matters
If China’s patent office wants to retain growth, it’s going to have to embrace the challenges of dealing with poor quality patents. A system to prevent invalid patents being brought against defendants appears on the surface to be an undoubtedly good thing, but if it makes all patent litigation prohibitively costly and drawn out then it’s going to prevent SMEs from defending themselves. Fundamentally, the issue lies with invalid patents getting granted, and perhaps going back to the source on this and spending a longer time examining patents will be less harmful to the patent owners.