A patent protects a person or company's intellectual property. Patents can be granted for specific devices or processes that are integral to making or using something, like, say, an iPhone or a solar panel. Those aren't two randomly selected items, however, because Apple's (NASDAQ:AAPL) iPhone has been the subject of patent infringement litigation for years and solar, well, those lawsuits could just be getting under full swing.
Apple vs. Samsung vs. ...
Samsung (NASDAQOTH:SSNLF) and Apple are probably the two highest profile combatants on the technology patent front, taking aim at each other over cell phones and tablets. However, the fighting over cell tech goes even further back, including a dispute between Nokia (NYSE:NOK) and Apple that started in 2009. Samsung didn't get into the fight until 2011, by which point companies as far ranging as Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), and Google (NASDAQ:GOOG), among others, were involved.
Guess what? Renewable power could be the next industry to step into the cage for a patent grudge match.If this sounds like the makings of a World Wrestling cage match, that's because it is. Every one of the companies above, except perhaps Nokia, has plenty of cash and plenty of reason to fight over their tech. And while the outcome of such infighting isn't always clear, the impact of a win or loss can be large, the legal costs are almost certain to be high, and the negative publicity is often ugly.
Take, for example, DuPont (NYSE:DD) and its patent lawsuit against SunEdison (NASDAQOTH:SUNEQ) over the "... infringement of U.S. Patent No. 8,497,420 (the '420 Patent'), entitled 'Thick-Film Pastes Containing Lead- and Tellurium-Oxides, and Their Use in the Manufacture of Semiconductor Devices.'" That's a mouthful and, frankly, I don't know what thick-film pastes are used for. However, SunEdison may have violated that patent by importing into the United States solar cells made with a Samsung paste -- there's a familiar name again!
The DuPont/SunEdison suit was brought in August. And it isn't the only fight in the solar industry. For example, solar panel maker SunPower (NASDAQ:SPWR) started the year with two suits, one against a German company and one in Delaware against a company called PanelClaw. All in, SunPower, which makes solar panels and installs them, has over 150 patents in the United States, with another 200 or so under application. It's got about 150 patents and 540 applications abroad, as well. There's a lot there to protect.
Big costs, how much benefit?
It can get a little arcane, too. For example, SolarCity (NASDAQ:SCTY) has patents and patent applications ranging from things like a "Renewable Energy System Monitor" to parts like a "Supply Side Backfeed Meter Socket Adapter" to something that sounds like a generally used sales method: "Renewable Energy Employee and Employer Group Discounting." A patent for that last one hasn't been granted yet, but it shows that the battle lines are being drawn, perhaps aggressively in the case of "group discounting."
How big an issue could this be? Well, according to Reuters, court documents filed late last year in California show that Apple spent about $60 million on lawyers fees in its battle against Samsung. That amount was described by Apple as a significant discount based on a long-standing lawyer/client relationship, by the way. Apple was awarded nearly a billion dollars in compensation in that specific case making Samsung a notable loser.
Here's the concern, however. Apple and Samsung are huge companies that can afford such costs. SolarCity, SunPower, and others in the still nascent solar industry are much smaller. The same holds for other renewable power sectors, all of which could see an uptick in expensive patent disputes if the cell phone space is any indication. Keep an eye out for such cases, they could be a bigger issue than they appear.
Reuben Brewer has a position in Apple. The Motley Fool recommends Apple, Google (C shares), and SolarCity. The Motley Fool owns shares of Apple, Google (C shares), Microsoft, Oracle, and SolarCity. 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.
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