Two patent-related lawsuit resolutions involving Yahoo vs Facebook and Apple vs, for all intents and purposes, the Chinese government (settlement would be an inaccurate term in either case) observers have been wondering what the fallout would be from US Judge Richard Posner's Apple vs Motorola qua Google decision. They did not have long to wait.
Following US Judge Richard Posner's smackdown of Apple and Motorola (and, by extension, Google) over their 'he said, she said' patent spat, industry experts have speculated that strategies would change. And they did.
In the first case, Yahoo, under its take-out CEO Scott Thompson, had determined one way to regain some heft and maybe even survive would be to stake out its patent turf. So, it sued Facebook over a variety of claims that FB had violated a bunch of Yahoo patents related to an array of business uses. There was some PR value in going after the tech world's champion of the year (monetization uber alles)and probably even more once the IPO faceplanted. Facebook fired back hard and it appeared that a lot of attorneys were on their way to having a very good year. But in the wake of the Posner decision, the two firms last week announced that they are making nice, discussing strategic collaboration, mutual benefits and otherwise acknowledging that neither one was likely to win.
In the second instance, Apple paid a cool $60 million to an obscure Chinese company which had claimed some prior ownership to Chinese rights to the iPad name. There was a mixed reaction to this greenmail. Proponents noted the size of the Chinese market, the need to make nice with an important government notable for its new-found belief in intellectual property rights (now that China is creating its own IP rather than ripping off that created by others, it has seen the light on that value proposition). Worriers suspected that once Apple caved - even for a fraction of the asking price - others would be quick to try to cash in as well.
The nays had it right. Apple is now facing two entirely new lawsuits in China, one regarding SIRI, its voice activated phone system and the other regarding use of the Chinese characters for Snow Leopard - which Apple apparently does not even use in China.
The lesson from all this is that Judge Posner's decision is forcing companies to reconsider their litigious inclinations when it comes to IP. The benefits of this approach are that collaboration will be allowed to attain the primacy it receives in most of the business world. It may take China awhile to come around, especially given the leadership's emotional stake in proving their companies can compete on something other than cheap labor. But the biggest implication may be that the value of intellectual property can no longer be considered a 'soft asset.' It is looking a whole lot tougher than real estate and other supposedly hard assets. And that will contribute to better global economic decision-making. JL
Julianne Pepitone reports in CNN/Money and Christina Bonnington reports in Wired:
In March, Yahoo filed a lawsuit alleging that Facebook infringed on 10 of its patents related to advertising, privacy, customization, messaging and social networking.
Facebook fired back hard at the surprise move. Its reply a few weeks later included counterclaims against Yahoo for allegedly breaching 10 Facebook patents, including ones related to photo-sharing and content personalization.
FROM CNN: Facebook and Yahoo are officially friends again. The two companies said Friday that they have settled the patent lawsuit Yahoo filed against Facebook four months ago, in a "strategic" deal that includes no cash.
The companies are now reversing course and signing a peace treaty.
Their patent cross-licensing deal also includes a "new" advertising partnership, but the press release announcing the alliance was light on specifics and laden with corporate-speak about "collaboration" and plans to work more closely together on "tent-pole and anchor events."
Yahoo's decision to wage a patent battle with Facebook was the first big strategic step for then-CEO Scott Thompson, who took the helm in January.
It wasn't a popular one. Critics saw the move as a desperate attempt by Yahoo to shake cash out of a younger, hotter rival. Facebook immediately called the suit "puzzling" and "disappoint[ing]."
Thompson, who spearheaded the lawsuit, didn't last long enough at Yahoo to see the case through to its end. He was ousted in May after just four months on the job in the wake of a scandal over his embellished college degree.
Once Thompson was out, Yahoo executives moved quickly to broker a settlement. Yahoo veteran Ross Levinsohn, who stepped into the interim CEO role and is reportedly a leading contender to keep the job permanently, reached out to Facebook COO Sheryl Sandberg to negotiate the peace treaty, according to AllThingsD.
Meanwhile, Facebook snapped up some extra patents of its own. In April Facebook spent about $550 million to buy about 650 patents from Microsoft (MSFT, Fortune 500), which itself had purchased those patents from AOL (AOL) two weeks earlier.
FROM WIRED:
A Shanghai-based company thinks Siri is a little too similar to their own voice-recognition software and is now suing Apple for alleged patent infringement over the technology.
Zhi Zhen Internet Technology developed a piece of software called “Xiao i Robot” that shares some similarities with Siri: It communicates through voice recognition, can answer questions, and can hold short conversations with the user. It’s currently available for iOS, Android and Windows Live Messenger, and can also be found on products from Chinese telecom firms like China Mobile and China Telecom.
“We have a 100 million users in China, and many companies are using our product,” company head Yuan Hui told IDG News in an interview.
Zhi Zhen was granted a patent for their personal assistant software in 2006. It first contacted Apple over the issue in May, and filed suit in Shanghai, China in June.
Just this week Apple settled a trademark dispute with another overseas company, Taiwanese PC and display maker Proview, over the iPad name in China. Apple ended up paying out $60 million to the cash-strapped electronics company to secure the name in the country.
Apple is also currently being sued for $80,000 by another Chinese company over the Snow Leopard name, which the company claims it owns the rights to in Chinese. Funnily enough, the company isn’t even in the tech space — Jiangsu Snow Leopard Daily Chemical Co. is a household chemical company that makes products like toothpaste and laundry detergent. And Apple does not even use the Chinese characters Jiangsu is suing over in its marketing of Snow Leopard OS in China.
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