Supporting innovation by protecting IP


Last fall, President Obama signed the America Invents Act, the most significant overhaul of U.S. patent law in more than a half-century. The unusually broad bipartisan backing for the measure reflects the country's wise desire to maintain and protect its intellectual-property leadership.

Notwithstanding the serious problems facing the U.S. economy, American entrepreneurship ??? at least in the idea phase ??? seems robust: a 2011 PricewaterhouseCoopers study noted that the number of US patents granted has shown a 4.5 percent CAGR since 1991. Moreover, the number of granted patents spiked to a record 233,127 in 2010, up 23 percent from 2009.

Perhaps unavoidably, the number of patent-infringement cases also has trended upwards during that time, peaking in 2004 at 3,075 cases, with 2,892 new cases in 2010, according to PWC.

Patent litigation can be a controversial topic in tech-business circles, in part because some involved parties are much more focused on litigation than innovation. But while suits can divert attention and resources from a company's core calling, truly innovative enterprises have a tremendous amount of value at stake in their IP, and failing to defend it would be costly for the company and, potentially, the semiconductor industry. With steady consolidation and constant pressure to maximize efficiencies, entrepreneurial companies are increasingly called on to provide innovations that power growth and add value in the electronics food chain.

Indeed, IP companies ??? particularly those that generate their own patents ??? are becoming central to advancing the electronics, semiconductor-equipment and materials industries. There would be a detrimental effect if these businesses were unable to earn a return on their investment through IP licensing.

A priority on patenting

Recent and ongoing IP litigation between Apple and Samsung, involving numerous suits and countersuits in several countries, has underscored the stakes. The Wall Street Journal reported late last year that against the backdrop of Apple's seeming "patent Armageddon," involving suits challenging competitors' technology, a growing number of small tech companies in the Bay Area, which traditionally have not seen value in patents, are now prioritizing patenting as part of their quest for ROI.

Consumer products and patent cases

According to PWC's 2011 Patent Litigation Study, cases involving technology associated with the consumer products industry accounted for nearly one-fifth of patent cases between 1995 and 2010. In fact, the number of cases involving technology companies in general has increased markedly in the past five years.

"The computer hardware/electronics, software, and Internet/online services industries experienced significant increases in identified decisions during the 2006-through-2010 time period, reflecting the impact of the ???Information Age' and the Internet on patent litigation," PWC said.

These industries historically have inspired and rewarded entrepreneurs, scientists and engineers who have delivered the innovations that create wealth and jobs, and improve quality of life for billions of people around the world. Lawsuits are a last resort, but an essential one to help aggressively protect IP and help ensure that the semiconductor industry's history of new breakthroughs continues.

Dan Donabedian

is CEO of Ziptronix, Ziptronix, Inc., 800 Perimeter Park Drive, Suite B, Morrisville, NC 27560 ; ph: 919-459-2400.

Solid State Technology, Volume 55, Issue 2, March 2012

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