27 Dec 2019

Patent Services- Trends and Analysis Transforming the Smartphone Industry

Smartphones Industry has taken the technological market by storm in India, with an urban audience, generally categorized as millennials, keenly observing the market and waiting to get their hands on every piece of new technology that comes bundled within the new smartphones. From “feature phones” constructed chiefly for the purpose of placing and receiving calls, to “smartphones” capable of overpowering computers, the journey has involved a lot of innovation and patent rights have performed akey strategic role in protecting those intellectual breakthroughs against unfair use.

The patent portfolio of a tech driven organization, along with its various intellectual property assets such as designs, trademarks and copyrights, is vital for its future success. A growth strategy aimed at strengthening the innovative capabilities of domestic firms and businesses can go a long way in ensuring a sustainable competitive advantage for domestic firms with the help of a strong intellectual property regime. Companies are able to invest in R&D of these technologies primarily because of the security and promise of the economic returns that these patent rights provide to their inventions.

Smartphone wars: The Patent battles
The patent rights, generally seen as a means of protection against unfair use, have also served as weapons used by the behemoth Smartphone companies in the infamous “Smartphone wars”. What kick-started in 2009, with Nokia suing Apple for using some of its SEP’s (Standard Essential Patents) without paying, has been followed by major wars between leading companies, the prominent ones being the series of lawsuits between Apple and Samsung and the numerous lawsuits launched against Google by an alliance of tech enterprises like Microsoft, Apple, BlackBerry, Sony, and Ericsson under the name “Rockstar” to de-throne the largest search engine in what is described as the “nuclear attack” in the patent smartphone wars.

The great deal of lawsuits involving telecom patents also justifies the interest and investment of handset and OS providers in the R&D of communication technologies, as a significant portfolio of communication patents would provide a stronger defense to companies when patents are asserted against them. As a matter of fact, this technology space created by the patent rights has
taken us from the slow-moving 2G communication phase to the point that 5G communication testing has already started in some countries.

A research indicates that a large proportion of the smartphone patent wars are associated to mobile data access, touch screens and transmission of mobile data, each of which has a different company dominating the patent portfolio.

Smartphone Patents: Pros and Cons
All the major tech-giants, now own a substantial smartphone patent portfolio. And while this level of patent activity is a positive indicator of innovation in the field, those who doubt the significance of patents argue that patents lead to hike in the prices of smartphones, and are scared of the consequences of sending legal threats and enforcing patents. Other than this, one might also find a group of individuals who see the smartphone-related patents as a means that harms the innovation.

However, there’s no concrete evidence to support the statement that patents have harmed innovation in the industry. In fact, smartphones have advanced quickly than any other consumer product over the past decade, and have seen a fair share of innovational breakthroughs from multiple-screens to curved screens, all thanks to the protection offered by the patent rights.

Citing a real world example of the importance of intellectual assets, the single thing that kept its boat afloat at the point where Nokia had completely lost its monopoly over the cell phone market was the revenue generated from the licensing of patents that it had filed over the years. Standing somewhere between the winners and the losers that were downgraded to has been as a result of the smartphone wars, the company’s timely focus on developing a strong IP portfolio paid off when it failed to develop products that could keep pace with the rapidly-changing smartphone market at the time.

Smartphone Patents: The Indian Landscape
In the past few years, India has emerged as a favorite destination for all the major Smartphone companies, be it the Chinese Smartphone brands like Vivo, Oppo, Oneplus, Xiaomi etc or the global leaders like Samsung, Apple etc. A detailed look on the patent activity of these companies in the country, however, reveals a complete different story. Vivo and Oneplus does not have much patent activity, thanks to the patent filings of their sibling Oppo in the country, which makes it easier for them to use all those technologies without any fear. Another Chinese giant, Xiaomi also has very little presence when it comes to patent filings in India, a lot lesser that their Chinese patent portfolio and have been sued by Ericsson for patent infringement during the days of its dawn in the Indian market. Even the players of the big leagues like Apple have very few filings in India.

The smartphone industry has been driven by the active involvement of patent rights since the beginning. And while the filings by the leading companies are mostly done from a defensive perspective, the virtues offered by building a strong patent portfolio can be seen in the results of the past smartphone wars where the winners walked away with billions while some of the losing parties completely lost their grip of the market. Talking about the patent activity in the Indian market, the Government needs to scrutinize intellectual policies to drive filings by the big players, as a good manufacturing hub has to have filing by the big players of the game.

To sum up, patent services have played a crucial role in the growth of the smartphone industry since the beginning and will continue to water this ongoing technology sector especially during the upcoming phase where most of the companies are unlocking their innovational potential and working towards the age of folding screens and complete display smartphones.

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