Speak Your Piece: Smart Phone, Bad Rule

A jury award in Apple v. Samsung threatens rural residents’ access to a critical technology – affordable smart phones. The president of the National Grange explains why the patent decision is letting Apple walk away with more than its due.

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Most of us have heard about the big legal fights in the agricultural sector over patented seeds. But unbeknownst to some, similar patent disputes are occurring over technology like our treasured smart phones. The effect on rural America could be profound.

Seventy percent of urban households, compared to 57 percent of rural households, have broadband service, according to a 2010 Department of Commerce report. As a result, a greater percentage of rural residents use smart phones and wireless to gain access to the Internet.  For many, it is their only option. The phones are their connection to government and emergency services, to education and health resources.

So ensuring that smart phones are available and affordable is important for rural Americans.

That’s why the National Grange is concerned about a patent lawsuit that Apple Inc. filed against Samsung. A jury recently awarded Apple $399 million in damages for intellectual property violations. Samsung smart phones were infringing on several Apple patents, the court said.

The ruling said Samsung must pay Apple 100% of Samsung’s profits from the sale of the devices that infringed on Apple’s patents.

 The jury’s verdict grossly overcompensates Apple. A hypothetical example explains why. 

Say a national superstore holds a design patent for the shape of the plastic grocery bags it uses. A local store uses the same bag design without permission. The superstore sues.

Instead of awarding the superstore damages to cover the infringement of the bag design, the court grants a much larger award – the total profit of every item carried out of the store in a grocery bag.  Such a decision would undoubtedly hurt many smaller groceries, enabling larger entities to force out the competition and become the sole supplier in a community.

The National Grange believes the court should give careful consideration to the potential harm that may come from excessive design patent financial damages in this case and other cases involving smart phones. 

The ruling could limit competition and makes smart phones more expensive. That, in turn, would make them less accessible to rural communities and businesses.  Samsung, for example, provides far more options for smart phones with a greater range of prices than Apple. Samsung’s products appeal to many lower-income rural residents and to businesses that have to pay attention to what they spend.

The National Grange is committed to ensuring rural residents and their local businesses have access to the resources they need to compete in global and local economies. We also want rural communities to have the same access to the quality goods and services as those in urban areas.  The size of the jury’s award to Apple could further impede rural residents’ access to the Internet and harm local economies.  It is our hope that the court either reverses or vacates the design patent damages in the case.

 Ed Luttrell is the president of the National Grange, a nonprofit, nonpartisan, fraternal organization that advocates for rural America and agriculture.

 

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