This Year's Dominant IP Strategy Appears to Be All-Out War

Brian Glaser

Corporate Counsel

01-17-2012

As this week's Consumer Electronics Show in Las Vegas presented its look at tomorrow's high-tech products, the festivities were underscored by the ongoing drumbeat of the recent past's patent wars. And as new battle plans are put into action, players big and small -- including Apple and Kodak -- have no intention of ceasing hostilities anytime soon.

The members of the technology press who were not busy picking through the flat-screen TVs and svelte tablet computers at CES took notice of an investor's note issued by Deutsche Bank analyst Chris Whitmore last week. CNN/Money's Apple 2.0 blog cited Whitmore's four endgame scenarios for the Apple/Google patent spat over the Android mobile operating system:

1. settlement with per unit license fee paid to Apple;

2. a more favorable outcome where Apple handicaps Android's feature set and/or distribution and captures 25 percent of Android's future market share;

3. neutral with no winner; and

4. Apple loses and must pay a counterclaim.

The blog post suggests that "Whitmore must not consider outcomes 3 and 4 very likely because he spends the rest of the note trying to calculate the value to Apple shareholders of outcomes 1 and 2."

CNet's Lance Whitney, who also examined Whitmore's note to investors, says that Apple's Android-focused suits against HTC, Motorola, and Samsung show that, in addition to aiming at individual patents, "Apple's legal strategy has also been designed to stifle the growth of Android."

Apple is also on the receiving end of a litigation-heavy patent strategy. This week, as Kodak announced it was restructuring its business to try to compete in the modern tech environment, it sent its lawyers to court to try to drum up some patent-fueled cash for the struggling company. According to CNet, Kodak "filed lawsuits against smartphone makers HTC and Apple over camera technology, just the latest attempt to get tech companies to pay a licensing fee."

While the litigation focuses on a handful of digital-imaging patents, they are a small sliver of the 1,000-plus tech patents in the Kodak portfolio. According to the Foss Patents blog, "Eastman Kodak keeps trying to force Apple into a license agreement relating to its portfolio of approximately 1,000 digital imaging patents," and the new suits "are presumably part of the sales and marketing effort for those patents: Kodak seeks to demonstrate that there are still some interesting assets in its portfolio that can be used to sue major wireless device makers."

So Kodak is using patent litigation to try to impress Apple into making a long-term, lucrative licensing deal; and Apple is employing similar tactics -- albeit on a larger scale -- in an attempt to battle Android to a standstill in the mobile marketplace. For those who were taking a "wait-and-see approach" to the effects of last September's patent reform legislation, the answer just a few months later appears to be: all-out litigation war.