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Two wireless communications giants, Motorola
and Qualcomm Inc., will both finally get their day in court
this week as they begin arguments about whether Qualcomm copied
the design of Motorola's tiny StarTAC cellular phone.
Such legal disputes are not new or unusual,
but the controversy surrounding Qualcomm's new “Q”
phone underscores what can become a thorny and costly issue
for growing companies — can two products that look the
same not infringe on each other's patents?
In the Qualcomm case, the battle lines are
already being drawn. A San Diego federal judge granted a restraining
order against Qualcomm on Friday that prevents further production,
sales or marketing of its “Q” phone, which Motorola
contends was copied from its fold-up StarTAC phone. Earlier
in the week, Motorola was blocked by the same court from speaking
publicly or to other companies about any alleged infringement
of the “Q” phone.
Historically, large companies with significant
brand recognition built into their products have always vigorously
guarded their patented designs, trademarks and copyrights. Neither
Qualcomm nor Motorola is new at this, although Motorola has
been around much longer and has a much larger product line than
the San Diego-based Qualcomm. Nor is the design issue unique
to the high-tech field. Companies like Nike and Coca-Cola comb
the marketplace for potential copycats, but the definition of
a copycat can become sufficiently muddled and confusing to smaller
companies newer to the game.
The “Q” phone story began in San
Francisco at the Cellular Telecommunications Industry Association
trade show last month. Qualcomm stole the spotlight from hundreds
of exhibitors as it unveiled its newest toy — a palm-sized
digital wireless phone that folds up like wallet and weighs
in at just over five ounces (about half the weight of its current
phone). The Sorrento Valley-based company, who grabbed headlines
by kicking in the final $18 million to complete the expansion
of Jack Murphy Stadium, spared no pennies in promoting the new
phone. The demonstrator of the “Q” phone was none
other than “Q” himself, the self-absorbed cosmic demagogue
who zipped in and out of episodes of “Star Trek: The Next
Generation” (actor John DeLancie).
The new phone created a buzz throughout the
show, especially in the Motorola tent. A year previous, Motorola
had unveiled a very similar looking device, a fold-up cellular
phone weighing about 3.5 ounces. The Illinois-based giant, which
has dozens of cellular phones on the market, started griping
that the San Diego upstart had stolen its design and even copied
the marketing literature for the phone.
Mindful of the possible damage both publicly
and to their relationship with their clients, Qualcomm ran to
San Diego's federal court to file a lawsuit seeking a judgment
that the “Q” phone violated none of Motorola's existing
patents. The day after, Motorola filed a patent infringement
suit of their own against Qualcomm in an Illinois federal court.
Last week, Motorola's case was transferred to San Diego.
Such a case brings up a couple of questions
for growing companies: how to best protect
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a new product from accidental or intentional
duplication, and how to avoid doing the same to an existing
product. Does a similar appearance equal patent infringement?
“That's the name
of the game. How can you differentiate yourself in the class
range without looking too much like something else?” said
San Diego-based industrial designer Vladymir Rogov, who designs
high-tech products for companies.
There are basically two types of patents —
design and utility patents. Utility patents are the mainstay;
they cover structural and operational features of the product:
What does it do and how does it do it? Design patents cover
the “ornamental” appearance of the product. They are
granted to any person “who has invented any new, original
and ornamental design for an article of manufacture.”
A design patent is highly limited, however.
According to experts, if the design is at all related to a utilitarian
feature of the product, it becomes much harder to enforce. Take
automobiles, for instance. Although car makers are continuing
to come up with new and unique designs for their cars, there
are only so many way to make a car. It is difficult to add a
design feature that does not have a functional aspect.
“These design patents tend to be narrowly
constrained,” said Mark Grady, a UCLA law professor who
specializes in patent and trademark law. “I don't know
how much they're worth, unless it's a strikingly new design.”
One of the oldest court cases dealing with
design patents goes clear back to the previous century. In Gorham
Co. v. White, which involved a design patent on silverware,
the U.S. Supreme Court ruled that the test for infringement
is whether it would be confusing to an ordinary observer.
Several design patent cases have gone before
the courts involving athletic shoes. LA Gear has both sued and
been sued over shoe designs, and Avia, Nike and Adidas have
taken other manufacturers to court over the issue. Design patents
on shoes normally cover the tread and the upper, according to
San Diego patent attorney Karl Steins, which are purely aesthetic
and are more easily enforced in court.
“A plaintiff in such a case has to prove
that they have a patent and there is an infringement,”
Steins said. “The defendant must then either refute that
or argue that the design patent is invalid because it covers
functional features.”
For technology products, designs are trickier
to enforce because often the design is related to the functionality
of the product, Grady said. In 1984, Litton Systems Inc., which
designed and sold microwave ovens, lost a design patent lawsuit
against Whirlpool, who also made and sold microwaves. Winner
International Corp., the company who designed the popular auto
anti-theft device called “The Club,” lost a suit against
another company that manufactured a similar looking device.
“The message from the courts was that
the products looked the same because they did the same thing,”
Grady said. “If the similarity has to do with the function,
it tends not to be a case of infringement.”
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Motorola has not stated publicly exactly what
type of patent Qualcomm allegedly infringed, and both companies
are currently under gag orders from the court and are forbidden
from discussing the case publicly.
Since the phones, on the inside, operate completely
differently, the issue will most likely relate to one of design
only. The “Q” phone transmits its conversations digitally
utilizing Qualcomm's patented Code Division Multiple Access
(CDMA) technology. Motorola's StarTAC phone operates using regular
cellular analog technology.
Functionality could be a constraint on Motorola,
even though both phones look very much the same with the keypads,
earpieces, digital screens and batteries in the same places.
For phones, design often relates directly to the function.
“Take for example the hinge in the middle.
How else do you make a fold-up phone?” Grady said.
For a company looking
to differentiate itself and its products, it becomes much harder
as the product line grows.
“It's pretty easy
to design one handsome unique product. It gets more difficult
to do that with a product line,” Rogov said.
Although design patents are much less common
than utility patents, they are popular for several reasons.
They are relatively cheap; the cost of the application is around
$800 and there are no maintenance fees involved. The application
process is less involved than a utility patent, since an applicant
only has to produce a three-dimensional drawing rather than
several pages of text and drawings explaining the operation
of the product. The design patent has a term of 14 years.
Another plus for design patent holders is that
they have the option to recover total profits from the infringer,
which is not available in a utility patent case. In Braun v.
Dynamics Corp. of America, the court ordered Waring, a blender
company, to pay Braun more than $1 million for its infringement
of a Braun design patent for a tapered household blender design.
Even with no monetary penalties, the loser
in any patent case can face some serious problems. The company
must essentially go back to the drawing board, which costs it
in lost time to market and considerable redesign costs. Some
of its clients can get scared off in the process. Production
has been ramped for the “Q” phone, according to Qualcomm's
officers, and even delayed time making the target market date
can cost valuable market share.
Companies hoping to avoid such troubles may
want to hire a professional design firm that is already “plugged
in” to the marketplace and can design a product or line
without coming too close to an existing product. Patent attorneys
also can be helpful, especially since they work with patent
search firms that can find out if the product infringes on an
existing patent.
“The idea is to
develop brand identity,” Rogov explained. “When you
have a long-term plan, you build a company profile, not just
a product.”
gallagher@sddt.com
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