Mr. Block and the Wireless Patents: A Fable from a distant time and place
Fables are stories that convey a “useful truth”, and below I’m going to tell the tale of Mr. Block and the Wireless Patents.
So, who do you want making decisions on the value of a given patent, or a portfolio of thousands of patents or more?
The Government? These are PRIVATE property rights, as defined in the US Constitution. Do you want the government defining the value of your home? Your car? A watch or piece of art you might want to sell? Or if you are a company, do you want the government to decide how you can sell your widget and for how much? Don’t think so!
Lawmakers? Same thing, Do you want lawmakers in the US, EU, China, or elsewhere telling companies what their private property or goods should sell for? Regulating egregious or bad faith behavior is a good idea, but price setting?
Courts? The Courts play a key role here, obviously. I’m not going to get into the role of the courts, but instead I’m going to tell a story which describes the pitfalls of EITHER side in a lawsuit relying solely on a Judge or a Jury to make decisions on VERY technical issues.
A long time ago, in a place far, far away, there was dispute on the value of patents between two companies. For the sake of our fable, let’s call one company “Qualcomm” and another “InterDigital”. Don’t know why I would use these names, but maybe my LinkedIn Profile, and my background could have something to do with it. This story may be apocryphal, it may be true, and I may be the only one that has heard the story from both sides, but hey, they both could have been telling tall tales.
So, here goes.
Once Upon A Time, two companies end up in a lawsuit around early cellular wireless patents. Both companies retained competent counsel to support their respective deep technical expertise around their patents, and went at each other. For years. Back and forth. Back and forth.
Finally, the two parties ended up at trial. The issues at hand were highly technical, so the Court and both sides agreed to the appointment of a Special Master. Special masters are appointed by the Court to assist the Judge, who cannot be expected to be a super genius with deep knowledge on Aircraft Parts one day, drugs for Bovine Diseases another, Mining processes a third day, and Wireless Standards Essential Patents (SEP’s) the next. Not gonna happen. Not gonna work. So, Judges, with approval from both parties appoint Special Masters to help out. Here’s an article by a District Court Judge discussing the role of a special master.
In this particular court case the two sides went back and forth for days on technical issues, frequently referring to various “Block diagrams” characterizing the inventions. “Block diagram” is a common description for a range of graphics that per Wikipedia “is a diagram of a system in which the principal parts or functions are represented by blocks connected by lines that show the relationships of the blocks.[1] They are heavily used in engineering in hardware design, electronic design, software design, and process flow diagrams.”
Note here one IMPORTANT fact for our tale. A “block diagram” is a form of graphic that can assist in depicting an invention. It’s a PICTURE! It’s not alive. Never has been. Never will be. Not even in a fable.
The slugfest continued, with the Special Master guiding the discussion on the “block diagrams”. At the end of one tough day, the Judge finally called the attorneys and the Special Master up for a conference at the bench. Roughly, the conversation could be characterized as follows:
‘We’ve been spending days going back and forth on these various block diagrams. The issues are highly technical, and the more we review the block diagrams, the more difficult it is for me to parse my way through the issues. Is there anyway we can call Mr. Block to the stand and have him explain the diagrams’.
Mr. Block.
The two parties settled within the next 24 hours.
Every fable needs a moral to the story. A “useful truth”. The moral here is that developing, protecting, and monetizing the core wireless technology that has changed our world in the last 30 years is challenging. And complex.
Describing characters on one side or another as “villains”, “greedy”, or in storybook fashion as “trolls”, or relying on a court to have the “right” answer in a dispute does NOTHING to drive understanding of the complexity or issues at stake. And does nothing to change the nature of the dialog to drive more companies towards bilateral negotiation. Negotiations that lead to outcomes that BOTH parties can 1) live with, and 2) both be unhappy about.
In the coming weeks/months, I’m going to try to explain some of this process. Not a lawyer, don’t play one on TV, and have never been in a courtroom for an SEP trial. However, I *do* have a unique viewpoint and perspective on SEP’s, the Companies that develop them, the Companies that use them, and the amazing impact that these technologies have had, and continue to have on our world and lives. Hopefully, you will join me for this adventure…
Jeff