The US International Trade Commission ruled in favor of Sonos on January 6. This may be an obscure legal ruling about a fight over intellectual property. It confirms a problem that threatens America's innovation economy.
The problem? Intellectual property is being stolen.
Big Tech companies used to profit more by stealing smaller companies intellectual property than buying or licensing it. With cash reserves in the hundreds of billions of dollars, Apple, and others don't have to pay legal fees, court costs, or even damages for this theft. There is a reported 142 billion dollars in cash in the bank. Most companies make total annual profits.
Big Tech takes what it wants. It uses litigation tactics to beat up on people who complain. It drags out litigation for many years and imposes huge litigation costs on owners of intellectual property. Many owners don't bother with a lawsuit. They know that trying to protect what is rightfully theirs is self-destructive.
Big Tech benefits from stealing intellectual property. The legal costs and potential damages are very low.
The results confirm the predatory practice. One of the more telling stories is the abuse of Sonos by Google.
The success story of the US is Sonos, and the piracy of its technology is a tragedy. In 2005 the company started as a disruptive startup with its patented innovation in wireless speakers. It secured a licensing deal with Google in order to make its music service, Google Play Music, work with speakers.
Big Tech benefits from stealing intellectual property. The legal costs and potential damages are very low. Adam Mossoff is a man.
This deal was used to gain access to technology. It began making its own devices with its own technology, including speakers and other audio equipment that competed directly with the products of Sonos.
The development costs for the new products and services that were being created by the company were not covered by the company. Patent pirates often use commercial practices to lower their prices.
The first attempt to negotiate a deal with the company was for a license for the technologies it stole from the company. While its profits ballooned and it lost more and more money, it took years for it to negotiate. Sonos had no choice but to defend its rights in court after seven years. The lawsuit was filed in 2020.
The International Trade Commission was sued by Sonos. The special court can move faster than regular courts. But it can't give you a reward for damages.
A judge at the International Trade Commission ruled in August that Google had violated five of the company's patents. The commission made the same decision last week. The company promises to keep fighting and still calls the claims frivolous.
Big Tech has used other people's patented technologies in ways that are not allowed. It has a new name: predatory infringement. Legal scholars and policy wonks say it's efficient. This is piracy in plain English.
Big Tech is attacking America's patent system to support piracy. Over the years, companies like Google have spent millions of dollars lobbying Congress and regulators to weaken and eliminate patents. The patent troll boogeyman was created to make patent owners feel bad about suing them, as if the problem was not their own theft, but their victims.
Washington needs to act to protect the creators and innovators who rely on patents. The STRONGER Patents Act should be reintroduced and enacted by Congress. The law would bring balance back to the patent system by changing some of the legal rules that Big Tech created and that are key to its predatory practices.
The legal victory of Sonos confirms what policy wonks and lawyers have been saying for a long time: Big Tech is 21st-century piracy. Washington should help end piracy.
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