The patent conundrum
More so today, than at any time in recent memory, people are talking about the exclusive rights that come along with owning a patent.
Exclusive rights means the patent owner can keep others from using the innovative technology covered by the patent without permission. Patents provide exclusive rights for a limited time to encourage and reward inventive activity. They give the patent owner an opportunity to recoup the costs of developing the new technology, either by being the only on the market who can sell the technology or by licensing the technology to others.
However, there is a recent trend in patent law to take these exclusive rights away from patent owners. This has two negative impacts. First, infringers have become increasingly bolder and more prevalent. Second, and related, innovation suffers because patent owners have fewer incentives to spend the resources necessary to develop new technology.
An important case in the International Trade Commission (ITC) is one of the latest examples of a patent owner being potentially stripped of its ability to exclude others from infringing its technology.
TiVo, through its merger with Rovi, acquired a number of patents covering technology that allows a consumer to control set top boxes remotely using a cellphone. Comcast (and many other cable providers) had been licensing these patents, but in 2016, Comcast decided it did not wish to pay licensing fees any longer. Although Comcast stopped paying, it did not stop using this technology. TiVo then filed a complaint at the ITC, seeking an exclusion order so Comcast could no longer import the set top boxes that used the patented technology. A judge at the ITC determined that Comcast was infringing TiVo’s patents and granted the exclusion order.
If this were the end of the story, it would have been a perfect illustration of patent law at work. After all, the patent owner was exercising its exclusive rights and collecting licensing fees from companies wishing to use the technology. When a company decided it wanted to keep using the technology without paying, the patent owner was able to sue that company and obtain a court order requiring the company to cease using the technology — and in particular, because the case is before the ITC, to prohibit the importation of devices found to infringe the patents.