It seems that hardly another day goes by without another global consumer electronics giant filing a patent lawsuit against another, writes Alan MacDougall, a Chartered Patent Attorney and partner at IP advisers Mathys & Squire LLP.
With Apple and Samsung currently engaged in all out warfare in courtrooms across the globe, an announcement by Intel’s President and CEO Paul Otellini earlier this month could raise the prospect of further intellectual property skirmishes in the mobile technology arena.
Speaking at the International Consumer Electronics Show in Las Vegas in January, Otellini revealed Intel’s intention to enter the tablet and smartphone market, including new partnerships with Motorola Mobility and Lenovo to produce ultrabooks and handsets.
The move could be seen to be a direct challenge to UK-based ARM Holdings, whose design of low cost, energy efficient microchips feature in 95 per cent of the world’s mobile handsets and over one quarter of all electronic devices. Over 15 billion ARM based chips have been shipped to date and the company has sold 600 licenses to more than 200 companies.
To date, Intel’s success has been founded on supplying a market hungry for ever more powerful processors. With its numerous worldwide fabs churning out high quality processors, it has carved out an enviable position in the PC market. However, with the world moving towards smaller, lighter, portable devices and the breadth of Internet-enabled items set to expand rapidly, Intel has recognised the need to adapt.
But while Intel would like to be able to fall back on its own patent portfolio to enter this new market, ARM’s dominance in chip designs for battery powered devices will make this difficult. ARM may be a fraction of the size of Intel, but because of its focus on the mobile technology market, Intel could have to use some of ARM’s technology. If so, it may find itself infringing some of ARM’s patents.
So, what are the likely scenarios?
First, it’s worth noting that Intel already has a licence to use some of ARM’s technology, so it is possible that Intel could enter the market without a need for a further licence for its new chips. All well and good.
However, if Intel does need access to other ARM technology, the British firm will be presented with a choice. On the one hand it could negotiate terms with Intel. Indeed it would be in a strong position to do so. On the other, ARM has the option of using its patents to prevent Intel’s new ventures.
Let’s consider the second option. Some might argue that in order to protect market share from a major chip designer - and hence in that sense a competitor - on the scale of Intel, legal action is a viable course of action for ARM.
Personally, I think this is unlikely. Firstly, it could open the door to a host of tit for tat legal actions against some of ARM’s licensees which, depending on the terms of those licences, could adversely impact ARM.
Secondly, ARM is a semiconductor design company. It develops new technologies and licences them to chip manufacturers. So Intel represents ARM’s biggest potential customer. Its entry into the market could constitute an enormous commercial opportunity rather than a threat for ARM – but only if Intel needs ARM’s technology.
Things start to get more interesting should Intel and ARM disagree over whether or not Intel needs further licences. In this case ARM may well be forced to initiate patent enforcement proceedings against Intel. Such a response could spell trouble, and may well trigger a patent war between Intel on the one side and ARM and its existing licensees on the other. As the Apple and Samsung situation is proving, that could be long, drawn out and probably unproductive for all concerned.
Alan MacDougall is a Chartered Patent Attorney and partner at intellectual property advisers Mathys & Squire LLP. He has an Honours Degree in Electrical and Electronic Engineering and a Masters in Communications, Digital Signal Processing and Control. Alan qualified as a European Patent Attorney in 1997 and specialises in drafting and prosecuting patent applications for information technology inventions.
