When a corporation stakes its reputation on the competitive value of its patent portfolio, it can’t afford to watch that portfolio go down in flames. Although the novelty of most any patented technological concept perhaps warrants some re-examination, three patents assigned to memory maker Rambus were recently invalidated by the U.S. Patent and Trademark Office, in a dispute with graphics device maker Nvidia over whether the act of rendering functionality on a single chip is a novel idea or just an obvious improvement.
This morning, both companies announced they’ve settled all disputes over the remaining, still-valid Rambus patents, with Nvidia being granted a five-year license to the formerly disputed technology. But this Nvidia win will have implications throughout the industry, as the competitive value of nearly all technologies integrated into a single circuit, may have just decreased.
The Nvidia argument that inevitably won the day pertained to the obviousness of changing the timing with which resources interconnect with one another in a system, in order to integrate those resources into a single chip. The most important hardware milestone over the last 20 years remains single-chip integration of multiple components. It has made most mobile technology possible, and the way this integration happens has itself been the subject of patents, including those assigned to Rambus.
But what had been considered, at the time of its arrival on the scene, an unquestionable innovation is, in the light of re-examination, becoming perceived as just an obvious improvement. Federal Circuit and Supreme Court decisions have raised the bar for “innovation,” redefining it to not necessarily apply to whomever is the first to do something that all its competitors are trying to do.
One of the most valuable patent portfolios related to systems-on-a-chip (SoC) belongs to Qualcomm. In a brochure last November explaining its business model to prospective investors, Qualcomm touted its value proposition with these words: “Building on its success in advanced modems, Qualcomm has become a leader in microprocessor technology, and its ability to bring together modem, microprocessor, GPS, graphics and multimedia solutions into a highly integrated ‘system-on-a-chip’ product is unparalleled… Nearly two decades after introducing the concept of mobile data, feature phones utilizing Qualcomm’s patented technologies are making mobile Internet browsing possible for large numbers of people worldwide.”
The implication here is that Qualcomm has perfected a method to integrate multiple components into something as small as a feature phone – a method whose perfection is itself protected by patent. Qualcomm’s Snapdragon SoC platform provides the foundation for many Android smartphones, especially from HTC.
The two biggest sources of competition for Qualcomm’s Snapdragon S4 platform this year are perceived to come from two sources: Intel, whose Atom Z2460 processor (PDF available here) is actually an SoC that incorporates its patented Graphics Media Accelerator and Image Signal Processor; and Apple, whose process for integrating components into its A4 and A5 SoC units – used in iPhones and iPads – has already come under fire from one-time Intel competitor Via Technologies – which some would say has nothing left to lose.
All these companies depend on investment; and investors depend upon the competitive value of their holdings’ respective portfolios to establish the value of their investments. Should the novelty of the SoC approach continue to be proven negligible under re-examination, investors could pull out, stock values could decline, and actual innovations – such as the production of new smartphones that customers would happily stand in line to purchase – could be delayed.
