Most have heard of the technology giant Apple, but until a federal jury awarded Smartflash LLC almost $533 million, few had heard of them. Smartflash is a Texas company whose only operations are licensing seven patents. Smartflash alleged that Apple had violated its digital copyright management, payment systems, and data storage patents. Apple’s defense relied on the theory that Smartflash was exploiting the patent system. Although the jury rendered an unfavorable verdict, Apple intends to appeal the judgment.
Although this case is relatively new, the underlying issue is not uncommon. The industry buzzword for Apple’s defense is known as “patent trolling” and many seek reform in this area of law. Patent trolling companies are infamous for existing only to get money out of other companies through patent litigation, instead of contributing to technological advancement and actually making things out of the patents that they hold. The Washington Post reported that 67 percent of all patent lawsuits filed were filed by so called “patent trolls.” This represents a 39% increase from five years ago. Powerful companies such as Google and Facebook have long advocated for reform to stop these frivolous lawsuits. Patent trolling raises legitimate concerns. Companies like Google and Facebook claim that patent trolling interferes with the opportunity to provide consumers with the latest and best technology possible.
Despite the prevalence of patent trolls and widespread support for reform, we have yet to see any significant action by Congress. Last session the House passed a bill to address this issue, but it failed in the Senate. This session, the Senate considers a similarly worded bill that attempts to solve the same issue as the previous House bill. Only time will tell as to what happens with this legislation. The current partisan composition of Congress would lead many to believe the bill is likely to fail. Given the low chance of success, this issue might be better left to be addressed by state legislation.
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Eliza Wilton is an editor on the Michigan Telecommunications and Technology Law Review, and a member of the University Michigan Law School class of 2017.