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Bill Merritt at CES: For strong patents and responsible practices

January 6, 2015 / CES / Posted By: Patrick Van de Wille


The topic of patent reform and intellectual property has been a hot one in recent years, and the wireless and technology industries have focused tremendous amounts of attention on it. The Consumer Electronics Association, of which InterDigital is a member, chose this year to host a panel on the topic and reached out to our President and Chief Executive Officer, Bill Merritt. As Bill said prior to the panel, “When you look at the topic it seems like everyone is fighting, but when you take the discussion to a high enough level, everyone agrees on what we need: quality patents, the elimination of bad actors, and responsible industry practices.”

The extremely well-attended session was hosted by Michael Petricone, (@mpetricone, Senior Vice President of Government Affairs for the Consumer Electronics Association). Bill Merritt was joined on the panel by Lee Cheng (@leecheng and Chief Legal Officer of NewEgg Inc.), Sally Washlow (President of Cobra Electronics), Laurie Self (VP if Government Affairs at Qualcomm Inc.), and Katie McAuliffe of Digital Liberty, a Washington-based lobby group.

As Michael Petricone said in his introduction, “America has always been characterized by a great patent system, and when you walk the halls of this show you see concrete evidence of that.” He described what he characterized as “everyone’s goal” of balancing incentive to innovation with reigning in practices that can be detrimental to companies.

“Our company wouldn’t exist without a strong patent system – half the products that you see out in the show wouldn’t exist without a strong patent system,” said Merritt, who further underlined that the correct way forward lay in “striking a balance” between innovation and the interests of consumers, businesses and the country. Laurie Self of Qualcomm highlighted the importance of intellectual property protection in the wireless industry. She mentioned that “many of the investments that my company and InterDigital make in research and development are for technologies that may not be in the market for 5 years, or ten years, or ever. The only way we can make those bets is with the protection of the patent system.”

Lee Cheng characterized his stance as defining bad actors via “actions-based” definitions, rather than asserting entity-based descriptions. He defined a two-pronged test for abusive behavior: that the patent being asserted is a bad patent, that probably shouldn’t have been granted; and secondly that the behavior is designed to take advantage of the legal system to extract compensation that is higher than the value of the patent. Sally Washlow highlighted the contrast between innovation and abusive behavior very succinctly: “We’re a company, we develop technology and have patents and we have nothing against licensing, but often when we receive letters we feel like we’re being extorted.”

Merritt highlighted the agreement on the panel, and underscored that a number of elements that have been put in place – the Alice decision, post-grant review, etc. – have just begun to take effect, and they should be provided more time to work, prompting visible agreement from a number of participants. He further made the point that a fundamental issue is that while people agree at a higher level on general principles, when the actual litigation on these topics is drafted it generally extends far beyond that level of agreement. He offered the example of demand letters: “The idea was to defend mom and pop coffee shops and users like that, who were held up as the examples of who was being affected. But when the draft legislation arrived, it was a pleading minefield, that was designed to protect large, multinational companies implementing the technology in their products.”

In the interest of posting timely content specific quotes have been delivered as accurately as possible, but readers are encouraged to view the entire video of the panel for verbatim content. All in all, what was noteworthy with the panel was the reasoned, nuanced and sophisticated level of debate and discussion – which contrasted markedly with the strident accusations and name-calling that we often see when the topic of intellectual property is brought up in tech circles. Credit to Michael Petricone for assembling an excellent panel, and leading the discussion very effectively. Hopefully the level of discussion in other circles – the tech industry globally, and public policy capitals around the world – can achieve a similar level of civility and intellectualism.