You Can’t Spell iPad Without IP
Apple has recently hit headlines for its large scale intellectual property success, against rival Samsung, for patent infringement worth $1.05 billion (USD); however such success follows an expensive exercise on their part, where trademark rights in China cost them $60 million.
Proview Technology, computer monitor manufacturer, registered the IPAD trademark in China in 2001, with other registrations in other markets around the same time, ahead of the launch of the Apple iPad. Apple bought the rights to this mark through Proview Technology Taiwan, for $35,000 in 2009, however an oversight by Apple’s lawyers meant that the transaction failed to transfer the trademark rights in China, and the dispute has been on-going ever since.
In assertion of their trademark rights, and alleged infringement by the Apple iPad, Proview called for costs exceeding $1.5 billion. Upon Apple’s failure to fulfil this request, the company sought seizure of the Apple iPad by Chinese authorities. Apple, whose growth is dependent on the Chinese market, as its second biggest market in the world, were forced to settle for a $60 million pay-out.
Intellectual Property the new pivot of civilisation
A figure not to be scoffed at, the settlement was one “acceptable to both sides”, according to Xie Xianghui, lawyer for Proview Technology. However for a company who has confessed to having more money than it knows what to do with, the settlement was barely a shaving off the balance sheet. Even the $1.05 billion damages awarded against Samsung for patent infringement is of little financial significance to either Apple or Samsung, representing just 2% of Samsung’s total revenue, and considerably less of that of Apple.
These cases are, however, not about the money but about market dominance. In a market defined by image and identity, and modern sensibility, look and feel are fundamental to success. Intellectual property, therefore, is paramount. Apple appears to be well aware of this fact too, with over 200 registered trademarks, and a history of legal suits for everything from use of the lower case “i” to use of an apple logo.
It was once said that property is the pivot of civilisation, but this is apparently no longer the case. The increasing density of development and the rapid advancement of technology, coupled with globalisation, mass-manufacture and modern sensibility, have glorified identity and brand marketing such that intellectual property is the new essence of civilisation.
The dangers of Intellectual Property protection
With an increase in the scale and significance of intellectual property protection, comes also an increase in the margin of error. Where billions of dollars and the sale and success of millions of goods are concerned, the consequence of any such case is considerable. In light of the recent $1.05 billion patent infringement decision, critics complain that intellectual property law has been manipulated to grant a monopoly over something as simple as a rectangle with rounded corners.
The Australian Federal Government, perhaps in response to such concerns, is now considering the introduction of tougher standards for innovation patents. This would increase the threshold for protection, to that of invention patents, so as to encourage competition and avoid the granting of monopolies. (Submissions on the proposal are due by October 25, for more information contact Acacia Law.)
Indeed, intellectual property comes at a price, and perhaps at the peril of competitors, but such is commerce and competition; and in protection of uniqueness and identity, intellectual property is paramount.