Pesky Patent Trolls Aid in Rising Cell Phone LCD Costs

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Remember back in 2012 when Samsung supposedly paid Apple $1 billion in a patent infringement lawsuit – via 30 truck loads packed with sacks of un-wrapped nickels?

While Samsung did lose the patent lawsuit against Apple, the congo line of delivery trucks showing up at Apple’s HQ to pay restitution ended up just being a bogus (yet funny) story.

However, there does exist an entirely different bread of trigger happy lawsuit plaintiffs that major electronic players are dealing with. Ones who don’t even compete with their defendants or even manufacture a single product pertaining to the patent they claim has been infringed upon.

Introducing the Patent Troll, who’s most recent victims are any company that uses an LCD screen on their device.

The Patent Wars Continue

It seems every week a new lawsuit between Apple and Samsung hit the news with astronomical damage claims making us realize just how many of these lawsuits are filed as malicious attempts to sucker-punch the competition through long and costly court proceedings with one goal in mind – selling more devices!

Enter Acacia Research Group and their subsidiaries onto the field of battle.

Acacia Research Group is a company whose sole purpose is to buy patents and then litigate against perceived infringement.

They are considered a non-practicing entity because their only source of revenue is from litigation, not from silly things like developing and manufacturing products for the patents that they control. (I mean, honestly, who wants to have to spend months and years developing technology when you can just buy other people’s rights to their work and then sue the pants off anyone you want?)

Acacia Research Group is not the only one, but they are one of the worst. They are number eight on Business Insider’s list of most feared patent trolls. PatentFreedom estimates that Acacia holds 1,316 U.S. patents and patent applications.

LCD Screen Patent Lawsuits

One of their subsidiaries, Innovative Display Technologies, is specifically targeting anyone who makes a product with an integrated LCD screen. Y’know, like, all of the smartphone and tablet makers, GPS companies, and car manufacturers who are now using touch screens in their vehicles– pretty much anyone that’s trying to keep up with modern technology.

IDT Patent Information – Photo Credits – PatentlyApple.com

They claim that all these companies are infringing on the patent they hold for “light emitting panel assemblies.” (Does your device have a screen? Chances are IDT is suing the maker of that device.)

Earlier this year IDT filed suit against Apple, claiming that the iPad 3, iPad 4, iPhone 4 and 4s, iPhone 5, and the MacBook Air all violate their patent. This first case was settled out of court and the case dismissed without prejudice. Apparently this taste of blood just encouraged IDT more, because they filed a second suit just two months after the first was dismissed. They are asking for $6 billion in “accrued royalties.”

Sadly, the majority of awarded damages rarely go back to the original patent owner.

Frivolous Suits From Frivolous Companies

While the ongoing back and forth lawsuits between Apple and Samsung verge on the ridiculous, they’re nothing compared to the suits filed by Acacia Research Group and Innovative Display Technologies. These companies exist only on paper, with nine separate Acacia subsidiaries officially occupying the same office space. But, as the Techdirt article on IDT points out,

“when your only ‘employees’ are outside law firms, you don’t really need a big office space.”

Acacia Research Group has no interest in dirtying its hands with such low brow pursuits as commerce and manufacturing. They can just pay a bunch of lawyers to do their dirty work and sit pretty atop their pile of subsidiaries that exist in name only and profit off the hard work of other people. People with imagination, creativity, and the ability to make their vision a reality.

Acacia Research Group currently owns 63 subsidiaries and have filed 669 lawsuits since 2011. The only reason they exist is to buy patents and sue people and recent statistics show how this trend is on the rise.

While this might be legal, the ethics surrounding such business models are defiantly being questioned.

What The Patent Wars Mean for Business

Rising costs and retarding innovation.

LCD screens are already increasing in cost due to size, resolution and technology. Add to this the costs of litigation – filing fees, attorney’s fees, settlements payouts, damages payouts and predatory royalties – and the costs just keep climbing with NO benefit to anyone besides the trolls.

One thing is certain – the patent wars are far from over. Between Apple and Samsung and the various patent trolls, more lawsuits will continue to be filed. Some will go to court, but many will be settled out of court. Make no mistake about who will be footing the bill, though. It’ll be consumers and the private business sector.