A U.S. International Trade Commission (ITC) judge recently did something extraordinary and virtually unprecedented. He found a patent valid and infringed, but recommended that there should be no remedy. This is an incredibly troubling development that should concern anyone who believes, as did the Framers of the U.S. Constitution, that patent rights are important for the advancement of the country.
This opinion piece about Qualcomm vs. Apple is not another call for or against “patent reform.” Patent reform proponents have been focused on “bad” patents or patents that should not have been granted if the Patent Office had been doing its job well. The argument has been that these patents are being regularly asserted against American companies, which then have to spend extensive resources trying to prove these patents are invalid or else that they don’t infringe the patents, patents that shouldn’t have been granted in the first place.
This ITC judge’s decision is not about patent reform. It represents a much more alarming and insidious development: There are a number of “good” patents or patents that cover important inventive technologies that are being devalued and disrespected by courts that should be protecting the innovative companies that develop these technologies. Patents are worthless if they cannot be enforced.
Companies spend millions of dollars developing inventive technologies and millions more innovating products and services incorporating these technologies and bringing them to the American public. One reason these companies can invest so much in invention and innovation is the patent system. By getting a patent on its new technology, an innovative company can ensure it has either a limited monopoly to make the product itself or, as is often the case, can license the technology to other companies to use.
In either case, the innovative company is able to recoup some of those costs associated with developing the technologies and have resources to invest in future inventions. If these companies cannot rely on patent law to protect their investments, it may result in fewer inventive technologies being developed, or even fewer companies being engaged in innovation.
Last year, Qualcomm filed a patent infringement complaint with the U.S. International Trade Commission (ITC), alleging that Apple’s importation of certain iPhone 7 models was infringing Qualcomm’s patents. Essentially, Qualcomm had developed an important, inventive technology that turned out to be so useful that other companies, like Apple, wanted to incorporate it in their own products. Rather than licensing the technology from Qualcomm or developing its own technology that did not infringe Qualcomm’s patents, Apple chose to just use the technology without paying for it. To protect its rights under patent law, Qualcomm sued to get Apple to stop.
Recently, an administrative law judge at the ITC ruled that Qualcomm owned a valid patent, and that Apple had infringed this patent. But the judge recommended against enforcing the patent because he believed it was more important that consumers have access to infringing Apple iPhones than it is for Qualcomm’s patent rights to be upheld, despite the ease with which Apple could have complied with the order by seamlessly substituting non-infringing iPhones, and despite the unquestionable ability of Apple — now the most valuable company in the world — to pay what it owes Qualcomm.
The judge’s precise reasoning has yet to be made public, but it is difficult to conceive of any rationale that would support recognizing a patent right and in the same stroke giving the infringer a free pass by refusing to allow that patent to be enforced in any way. Whatever the stated rationale, perhaps in reality the judge just believes — as apparently does Apple — that Apple is now simply too big, too important, or too beloved to infringe? iPhones are too ubiquitous, so Apple should not be held to the same standard as everyone else?
By reasoning that the American public has more interest in having infringing iPhones than in having a patent system that protects and rewards innovative companies, the ITC judge has rendered an important patent worthless. How in the world can that be in the public interest?
The good news is that the story doesn’t have to end this way — because the ITC judge’s recommendation will be reviewed by the full International Trade Commission. The full commission must do the right thing, recognize the fundamental public interest in not making important patents worthless and reject the judge’s recommendation. This is too important a case and too harmful a precedent for the full commission to do otherwise.
• Kristen Osenga is a professor at the University of Richmond School of Law and senior scholar at the Center for the Protection of Intellectual Property.