How IBM and Samsung gobble up patents to stay ahead of their rivals
Eager to keep competitors’ hands off their latest inventions, technology firms are racing to file new patents in greater numbers than ever before. “If you look at the grant and applications in the US, they are totally dominated by tech,” says Larry Cady, senior analyst at IFI Claims, a company that collects and analyses data on patent applications. “Anyone making a smartphone, they just file a tremendous number of patents.” Of the 20 companies that filed the most patents in 2017, only two – both automotive firms – fall outside the technology industry.
Why the rush? Partly, it’s a defence against future lawsuits. “Companies know they're going to get sued,” says Cady, “and one of the strategies they’ve developed to deal with this is called defensive patenting.” If one company with a huge patent portfolio is sued by a rival, there’s a good chance that rival is also infringing one of their patents, too. Apple and Samsung – two of the most prolific patent-grabbers – have been fighting a near-endless legal battle over patent infringement since 2011.
In May 2018 the seven-year patent trial started drawing to a close when a court in San Jose, California, awarded Apple $539 million (£422m) in damages. The court found that Samsung had infringed design and utility patents coving, among other things, the iPhone's rounded corners and the grid layout of the iOS home screen.
And Apple is no strange to falling foul of patent laws, either. In August 2018 the iPhone manufacturer was ordered to pay $145.1m (£110m) for infringing on a pair of patents held by a Canadian patent licensing company, WiLan. In 2013 another lawsuit between the two companies ended in Apple's favour after WiLan tried to sue for $248m (£194m) in damages.
But for IBM – which has received more US patent grants than any company for the last 25 years – patents are also a lucrative source of income. The computing firm profits by amassing a healthy collection of patents, then licensing that technology or selling the patents to rival companies. “Each company has its own unique patent approach,” says Cady. “There really is a lot of strategy and, frankly, gamesmanship in this.”
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