URBAN PHILOSOPHER
Conscience Laureate

Thursday, July 7, 2011

SECTION 337: Everybody is suing




According to the United States International Trade Commission (ITC), Section 337 of the Tariff Act of 1930, pertains to “investigations that most often involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods.”  In the computer world, all of a sudden, everybody is suing everybody because of this clause.

Last week, Samsung sued Apple in Seoul alleging five patent infringements, in Tokyo over two alleged infringements and in Manheim, Germany, over three. (Apple had earlier sued Samsung for the same thing.) So Samsung responded by saying, "Samsung is responding actively to the legal action taken against us in order to protect our intellectual property and to ensure our continued innovation and growth in the mobile communications business," the company said in a statement

According to Legal Times, “The number of intellectual property complaints filed at the U.S. International Trade Commission in the first six months of 2011 is well above the pace set in 2010 - which itself smashed previous caseload records. The biggest spike in 2011 came in June, when 14 new cases were filed. Among them: Samsung Electronics suing Apple Inc. over iPhones, iPods and iPads; AU Optronics Corp. suing Samsung and others over flat panel display devices – and Samsung suing AU over liquid crystal display devices; Honeywell International Inc. suing Furuno Electric Co. over GPS systems; and OSRAM GmbH suing LG Electronics Inc. over light-emitting diodes.”

What I find so interesting about this is that since all these companies are suing each other, who ends up paying for the legal fees?  Consumers!  One wonders how much less computers and cell phones would cost if there were no need to recover what the attorneys were making!

Legal Times continues, “’The whole world seems to be focused on Section 337,’ said Tom Schaumberg, a name partner at Adduci, Mastriani & Schaumberg, which last year was involved in more ITC cases than any other firm.

Schaumberg explained that several factors caused the surge in lawsuits. More foreign-based companies like Samsung, Nokia and Toshiba are using the ITC offensively, as are Fortune 500 companies like Apple, Hewlett-Packard Co., and Microsoft Corp. The disputes often involve high-tech products with short shelf-lives, and the ITC’s 16-month average turnaround is crucial.”

But since the ITC only has six administrative judges, I am sure that 16-month turnaround will easily turn into a years-long wait.  By the time a case is settled, advances in technology would have far surpassed what existed at the time of the lawsuit.

Copyrights, trademarks, patents, industrial design rights and trade secrets are considered intellectual property.  Intellectually means rational rather than emotional.  So while rationally these companies have a legal right to sue for infringement, emotionally they should walk away and save the consumers the pass-along costs of litigation.  But that makes too much sense.

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