How Low Can This Patent War Go?

Last week, Apple  (Nasdaq: AAPL  ) got its clock cleaned by Swiss Federal Railways. The release of the iPhone 5 came with a lot of changes, including the design of the phone's timepiece. With striking similarity to the Swiss Federal Railways' station clocks, the company contacted Apple to let them know that the design was created (and trademarked) by the rail company in 1944.

Subsequently, Apple announced last Friday that it will pay a licensing fee to the rail company for the continued use of its design. The exact details will remain confidential, but this most recent patent piddle points to a larger trend in the technology sector.

With proponents and critics on both sides, the fundamental question remains: At what point to do patents stop supporting innovation and start preventing it instead? Fool contributor Justin Loiseau reports from Geneva, Switzerland.

Patent wars aren't going away anytime soon -- even for Apple. This tech company has delivered market-smashing returns for those lucky enough to invest in the company. However, maintaing that torrid pace will only get more difficult. If you're looking for a recommendation on how to play Apple along with continuing updates and guidance on the company whenever news breaks, we’ve created a brand new report that details when to buy and sell Apple. To get started, just click here now.

Justin Loiseau owns shares of Apple. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.

The Motley Fool owns shares of Apple and Qualcomm. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (4)

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  • Report this Comment On October 16, 2012, at 8:44 PM, seattle1115 wrote:

    Wait - is this a trademark issue, or a patent issue? There's a huge difference, both legally and in terms of policy analysis. I followed the link in the article, and this appears to be a cause of action sounding in trademark - and, on the basis of the photos that accompany the source article, it appears to be a non-trivial claim.

  • Report this Comment On October 17, 2012, at 6:23 AM, TMFJLo wrote:

    @seattle115

    The clock is a trademark issue, and both Apple and Swiss Federal Railways seem to have considered it a non-trivial claim, considering their agreement.

    Looking beyond this issue, both trademark and patent issues are on the rise, and tech companies like Apple are in the thick of it.

  • Report this Comment On October 17, 2012, at 8:35 AM, mykai wrote:

    when we start graduating more a Tech oriented workforce rather than the current cesspool of lawyers ( err liars ), until then we can expect more of the same. Seems there's an over-abundance of them and they have to all have that high lifestyle.

    Let the battle be in the test labs and the winner be the innovators.

    Look at the issue with Professional sports - the owners of all 4 major leagues are represented by one law firm whose strategy is the 'lockout' - harming entire communities.

  • Report this Comment On October 17, 2012, at 11:04 AM, seattle1115 wrote:

    @mykai wrote: Let the battle be in the test labs and the winner be the innovators.

    Fine. And then when some competitor comes along and appropriates the work you've done in the test labs without compensating you for it, you certainly won't consider retaining a lawyer to protect your rights - right?

  • Report this Comment On October 17, 2012, at 11:10 AM, seattle1115 wrote:

    And by the way, I'm no fan of overly expansive intellectual property rights - I've long advocated reeling in some of the more egregious abuses of the patent system (especially with respect to "business method" patents), I've often been outspoken in my opposition to the use of trademark as a sword rather than a shield, and back when I was practicing law I used to do a lot of work defending alleged copyright infringement in cases of "fair use." I believe in a closely limited application of copyright and patent (as required by Art. I, section 8, clause 8 of the Constitution, as I read it), but to say or even imply that intellectual property law in general is a hindrance to innovation is simply silly. Without such protection there IS no innovation, which is why the drafters of the Constitution put aside their general hostility toward monopolies and included the "science and the Useful Arts" clause.

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