Sony and LG have settled their patent disputes outside of court, setting an example for other companies embroiled in expensive lawsuits.
The Japanese and South Korean-based companies announced they reached a cross-licensing deal with each other to put their legal battles behind them. The two sides had filed patent infringement lawsuits against each other regarding similarities in the technology in their televisions, Blu-ray players and cell phones.
The settlement between Sony and LG comes as several high-profile patent disputes are taking place in the technology industry. Many smaller companies often sue tech giants, but in these cases bigger companies generally either quash such suits or settle matters outside of court. The biggest and most complicated cases generally occur when one large company sues another.
The Sony and LG settlement, being one of the latter suits, could impact the way other big companies conduct their patent litigation. Apple is currently in the midst of patent battles with HTC and Samsung, while Google has faces heat for possibly violating Oracle’s patents. In drawn-out cases such as these, companies spend millions of dollars on legal fees and lawyers and it can takes months to reach a final resolution.
Whether or not LG and Sony’s actions influence any of those above cases, patent wars are sure to continue. Patent cases have become so prevalent lately, companies have begun bidding wars for smaller businesses that hold thousands of patent rights. In April, Google bid $900 million on a portfolio of patents to help it fend off future lawsuits. Apple, Microsoft and other Google competitors countered the purchase by forming a group to buy Nortel’s $4.5 billion worth of patents.
While buying up patents may be a good way to stay out of possible lawsuits, there is also a downside to the practice. No number of patents can make a company completely immune to a lawsuit, and many analysts feel it could stifle innovation in the industry. Smaller companies could soon end up hesitating to release new technology out of fear a larger company that has become fat with patents will sue them.
Sony and LG’s cross-licensing deal appears to be a healthier way to solve patent issues that might influence others to do the same. With a deal like this, both sides can continue selling and creating new products while consumers do not lose any options on the market.
If more companies follow Sony and LG’s model, this could allow tech companies to spend less time and resources trying to stay out of the courtroom and more time developing new products.