Tech Giants Are Using Efficient Infringement (a.k.a Invention Theft) to Crush Competitors and Kill Innovation

Efficient infringement has become an all-too-common business practice in the U.S. What is efficient infringement? Efficient infringement occurs when large corporate interests choose to infringe the patents of smaller inventors, knowing that it is cheaper to fight off any legal challenge in court, than it is to pay a fair licensing fee for the use of an invention. Another word for this practice is “invention theft.” Sound like a shady practice? It is.

Two high profile cases of efficient infringement have come to light recently and the parties involved may surprise you:

1. Apple Steals Health Tech for Watch from Masimo Corp.

Masimo Corp. is a Southern California healthcare tech company that focuses on developing innovative, noninvasive patient monitoring technologies. Apple execs met with Masimo under the guise of Apple planning to license Masimo’s patents for use in the Apple Watch — specifically to advance the health monitoring capabilities of the device. Instead of reaching an agreement, Apple hired away multiple key members of the Masimo team and began integrating Masimo’s technology into the Watch without a licensing deal. Masimo is now suing Apple for patent infringement. Read more on this case in Bloomberg.

2. Google Steals Wireless Home Speaker Tech from Sonos

Google has apparently been engaged in a similar efficient infringement scheme against Sonos, the maker of wireless home speaker technology. Google and Sonos had once worked together to allow Google’s music service to play on Sonos speakers. But Google then shifted gears and began using Sonos technology in its own Chromecast home speakers, directly competing with Sonos. Google execs seem to have concluded that it was less expensive and ultimately better for Google’s bottom line to infringe Sonos’ patents and resist any legal challenge in court, than it would be to pay a fair licensing fee. And given the difficulty patent owners now face in getting injunctive relief, a judicial order stopping the sale of an infringing product, Google was likely making a safe bet. Read more about this case in Joe Nocera’s recent column.

Want to learn more about invention theft? Read our blog post here.

Concerned about the current state of the U.S. patent system? Read this blog post about the STRONGER Patents act, a bipartisan bill that would strengthen our patent system, support American inventors, and help stop efficient infringement.

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