March 10, 2014
The headlines are full of major patent disputes and lawsuits involving leading tech companies and billions of dollars. That publicity can sometimes obscure the fact that in the vast majority of context, multiple users of technology can peacefully co-exist through use of licensing arrangements. Recently, Google and Samsung negotiated a broad and important cross-licensing agreement which should help both companies make more efficient and effective use of a wide range of technologies.
Both Google and Samsung have been involved in numerous high-profile patent disputes and associated litigation. Samsung, for example, continues a long and bitter patent fight against Apple. Literally, billions of dollars are at issue in these patent battles.
In their recent negotiated agreement, Google and Samsung authorize each other to make use of a wide range of technologies. The agreement reportedly covers both existing technologies and those that will be developed and patented in the future over approximately the next decade.
Cross-licensing arrangements like this one illustrate the ways in which traditional intellectual property rights management strategies can operate efficiently and effectively. Patents and other forms of intellectual property are assets that can have substantial commercial value.
Optimally, owners of intellectual property realize the value of those assets through their own direct commercial exploitation of the property. Licensing arrangements offer an effective additional commercialization strategy for intellectual property.
As experienced participants in large-scale patent litigation, both as plaintiffs and defendants, Google and Samsung have a thorough understanding of the advantages and disadvantages associated with litigation. They both recognize the enormous costs associated with prosecuting or defending major patent claims.
It is likely that the bruising patent battles fought by both of these companies played a significant role in their successful efforts to develop a significant licensing relationship. Having experienced directly the major investment of resources associated with complex patent litigation, the two companies likely appreciated the economic efficiency associated with broad licensing arrangements.
Major cross-licensing agreements such as this one should be appreciated and recognized as important victories for the intellectual property rights system. When operating most efficiently, patents and other intellectual property rights are not contested in courtrooms but are instead assets that are commercialized through licensing transactions.