IP MADNESS

Many people know of my anti-intellectual property stance. Most, if not all, of those people find my view on the subject too extreme, and I can understand that. But even if we are on completely opposite sides, I think most people will agree that intellectual property today is broken. Problems in the system range from taxpayers taking on the risks of private companies to insufficient distribution of lifesaving medicine. But on the lighter side of the stupidity in the world of IP we have Apple which was granted 28 patents on Tuesday (see here). Two of these patents have got some serious attention – the flexible phone and smart glasses technology, but I’ll only talk about the former here.

The flexible phone comes as no surprise as the #bendgate scandal related to the iPhone 6 Plus is still fresh in our minds. This patent describes a mobile device that is meant to bend under pressure while protecting sensitive components. If you have heard of patent trolls, and you think that there is a problem with a system that allows them then I think you'll see that there are problems with the implications of allowing this patent.

Flexible batteries and flexible screens are not a new thing. The screen is the largest fragile part of a smartphone, so if you want a flexible phone you will need a flexible screen. Current flexible screens are made of an active-matrix organic light-emitting diode (AMOLED). AMOLED technology is already a popular technology in many phones since Samsung is a world leader in manufacturing AMOLED displays in many applications while LG uses a similar POLED technology in some of its phones. Most OLED-based technologies can be made about as flexible as high quality copier paper.

The battery is the next largest component in a smartphone, and a flexible variant has also been around for a while. Lithium Polymer (LiPo) batteries can be made to be almost as flexible as play dough and are also becoming the most common type of battery used in smartphones today. The primary reason for LiPo technology to date was not for flexibility, but because LiPo technology was lighter and smaller than previous technology and would have the ability to shape the battery into any shape space available as an added bonus.

The rest of the components, such as the camera, GPU and sensors, have to be made sufficiently small or out of other flexible materials, all of which exist today. These components are already fairly small and have mostly flexible connectors. So what is there left to do? Well, you still have to come up with a way to fit all this stuff together in such a way that the phone is maximally flexible and rigid in all the right places. Admittedly, Apple does excel in putting things together in a tidy way so they should get credit where credit is due. But the patent will only serve to stifle the innovation of potential competitors.

Samsung announced the first “real” flexible display phone here with a prototype in 2010. Though it was extremely flexible, it required a housing for other components that were unable to bend. Still, it shows that Samsung was concerned with the flexibility of their phones about 4 years ago.

The LG G Flex was marketed as a flexible phone over a year ago now, but it didn’t have the flexibility that the Apple patent intends. Still, the G Flex could have been a great starting point for flexible smartphones and an example for other manufacturers to follow and improve on.

Another potential competitor was the Kickstarter project Arubixs. The Arubixs campaign was started in September 2014 and was supposed to be for the development of a “Flexible, Shatterproof, Water Resistant and Wearable Smartphone”. There were, and still are, groups of skeptics that believe that Arubixs is a hoax and that a startup does not have the resources to meet its lofty goals. But, as I’ve already mentioned, the Arubixs would simply be a method of arranging already existing technology, not a build-from-scratch solution. So who knows how far the Arubixs team was down the road? From where I stand, they seem to be as far as Apple.

So why should you care?

Because it's harmful to the public and the most obvious way is that it harms the consumer by significantly increasing the cost of the product. A 2013 study by WilmerHale found that approximately 30% of the cost of a smartphone is used to pay for patent royalties and litigation, which is about the same as the cost of the components. Part of the reason that the cost is so high is due to something called “Royalty Stacking” where overlapping IP claims demand redundant royalties.

These kinds of patents also serve to stifle innovation, and prevent the public from having competitive products. For example, imagine that you are on the Arubixs team and you just heard about the Apple flexible phone patent - how do you react? You might say that there is nothing to worry about since there is significant evidence to show that you were working on something before the Apple patent was approved. But one look at Apple’s Balance Sheet, which has a pile of cash that is sitting there, might make you think that Apple is just waiting to pay for lawyers to prove that you stepped on their toes. Apple has a history of taking these kinds of things very personally so if you have a great way to make a flexible smartphone, Apple's patent might make you think twice about making it a reality.

The IP is ultimately as strong as the legal team that defends it. So if you are a small, cash starved, startup trying to make the case that you came up with an Apple idea before the patent came out you might be in some trouble making your case. Instead of encouraging innovation from competitors, potential competitors would now be deterred from even trying.

Let’s not forget that patent processing and enforcement are a public matter – that is, the taxpayers pay for IP. Whenever a trial for patent infringement occurs, or a patent is filed, it’s the government that is picking up the bill. In that way, patents are a way to maintain a government enforced monopoly at the expense of taxpayers. The danger of this kind of a system is that the risks associated with bringing that to market are transferred from the private company to the taxpayer, but the profits are privatized.

Patents are also notoriously difficult for the public to read or understand. The current system of IP is reminiscent of Christian scripture circa 600 AD when it was only written in Latin. Common people, who had no hope of understanding scripture (many who couldn’t even read), had to trust authorities as to what scripture stated and meant. Battles over scriptural interpretation were done so far beyond the reach of common people that they had no meaningful input into those interpretations. However the interpretations would have serious repercussions on the lives of common people since it was the basis of all their laws and many traditions.

The same is done today by giants like Apple that write patents far beyond the understanding of the public. To see an example of how the public misunderstands IP and how Apple exploits that through PR, see the article by the Verge here. Those patents are then enforced using the taxpayer’s resources while legal expenses are financed by the consumer. This is all done to prevent competition, which would actually benefit the public by coming up with new, and potentially better, ideas.

Now I know Apple (and others but especially Apple) makes products that people love, so I don't think that a complete Apple boycott is reasonable, or even called for. All I ask, is that the next time you fall in love with an iSomething, take a moment to think about how you are being exploited by the IP that powers it.