When is Big Tech Too Big? (and Why Patent Holders Should Care)

Let’s put it right out there. Once big tech companies are firmly entrenched, once they are so large that money is no longer an issue (for all practical purposes), they benefit greatly from a weak patent system.

 

At first glance, that assertion might seem nonsensical. After all, in a weak patent system, wouldn’t a big tech company find itself susceptible to intellectual property infringement by practically anyone?

 

You would think so, but when there are weakened patent protections for the “big guys” on the block, that also means the “little guys” (and gals) go unprotected as well. Without adequate patent protection, nothing is there to stop the big guys from copying a little guy’s code or methods or processes and making it their own. In such a scenario, who’s likely to win out—the international, high-tech behemoth with deep pockets, or the start-up?

 

Sadly, the scenario described above is not a “what-if” type case study. It’s an all-too-true reality of being in the tech-related business of the twenty-first century where companies such as Apple, Google, Amazon, and Microsoft rule the roost. Through massive contributions to state and federal campaigns and intense lobbying efforts, these companies and others like them exert undue influence over Congress and the Executive Branch—so much so that the “little guy” is hard-pressed to compete.

 

Eyeing Google

 

Let’s look at one of the aforementioned giants, Google, and how its efforts have impacted the US patent system.

Consider these factoids from www.ipwatchdog.com:

  • Google was one of the three largest bundlers of campaign contributions to President Obama.
  • The year after the America Invents Act (“AIA”) was passed (2012), Google employees and their spouses’ direct contributions to Congress were almost $1 million, spread evenly between Republicans and Democrats.
  • Google spent $18 million on lobbyists the year the AIA was passed. Google’s support of “think tanks” and lobbying organizations was even greater and was done in cooperation with other Silicon Valley tech giants.

So what, exactly, did these actions by Google (and others) do the U.S. patent system?

  •  The presumption of patent validity on behalf of the person or entity holding the patent is now a thing of the past.
  • Patent challenges can now take place outside of court, without a jury.
  • Patent challenges now require a lower standard of proof.

Interestingly, in the year the AIA went into effect, Google’s share of the internet browser and search market was 67 percent. It’s now nearly 80 percent.

 

Ipwatchdog.com also reports that “since passage of the AIA, the United States has fallen from 1st to 12th in the ranking of the strength of its intellectual property system, and is now tied with Italy and behind all other highly developed economies.”

 

Lessons from the Past

 

While government intervention is rarely the best answer, sometimes situations warrant involvement by the Feds. In that light, let’s take a look at a couple of prime examples of “big tech getting too big” from the not-to-distant past:

 

This isn’t the first time a tech giant has flexed its muscles to squash wannabe rivals. Microsoft was doing that all through the 1990s, at least according to the United States Government, so much so that it put a target on its back for monopolistic practices. In 1999, the U.S. Department of Justice (“DOJ”) accused Microsoft of packaging its Internet Explorer web browser with its Windows operating systems, which effectively denied rivals the opportunity to participate in the burgeoning internet browser market. A district court agreed and Microsoft was ordered to break into two companies, one Windows-centric and one dedicated to all other Microsoft products. While the breakup of Microsoft never occurred, a landmark 2001 decision by the U.S. Court of Appeals for the D.C. Circuit found that Microsoft had engaged in monopolistic practices in the way it handled its operating system (Windows) and web browser (Internet Explorer) integration. The remedy? After much legal wrangling and additional court proceedings at both the state and federal levels through the early 2000s, Microsoft ultimately conceded to unbundle its internet browser from the Windows operating system and to allow competitors a peek behind the “curtain” of its proprietary operating system, enabling them to develop software more closely integrated with it.

 

Similarly, back in the early 1980s, the DOJ brought an antitrust suit against American Telephone & Telegraph Co (“AT&T”), arguing that AT&T’s near complete control over both telephone service and telephone equipment in the United States constituted a monopoly. Following nearly a decade of litigation and negotiation, the result was that ATT&T relinquished control over its regional telephone companies, the Bell Operating Companies (or “Baby Bells” as they came to be known), and divested itself from a significant portion of Bell Labs (AT&T’s research subsidiary) and the Yellow Pages business.

 

Looking Ahead

 

“Regardless of your feelings toward Google and other big tech companies, and whether you believe they’ve gamed the patent system to their advantage, the writing on the wall for any patent holder or aspiring patent holder is clear to see,” explains Eric Ludwig, whose California-based law firm specializes in IP and business litigation around the globe. “If you have an idea or invention, and you want to protect it from infringement by others, working with a qualified intellectual property expert—someone who can commit to a process of due diligence on your behalf and advise you on various legal issues, especially concerning IP laws, patents, trademarks, and what to do if/when infringement occurs—is highly recommended.”

 

Protect Your Product. Your Business. Your Dreams.

 

Contact Eric Ludwig today for a one-hour consultation to discuss whether you need to apply for copyright, patent, and/or trademark protection . . . and how to do it.
(619) 929-0873 | [email protected]

 

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