The US International Trade Commission ruled on January 6 that Google had infringed on Sonos’ patented innovations in wireless speaker technology. This may sound like an ambiguous legal ruling about a complex intellectual property struggle. But it underscores a problem that threatens America’s innovation economy and its international economic competitiveness.
the problem? Intellectual property theft.
Years ago, big tech companies like Google decided they were making more money by stealing the intellectual property of smaller companies than by buying or licensing it. Google, Apple, Samsung and others — with cash reserves of tens and even hundreds of billions of dollars — don’t stress about legal fees, court costs, or even the damages they would have to pay for this theft. Google has $142 billion in cash in the bank. This far exceeds what most companies make in their total annual profits.
And so the big tech companies take what they want. It then uses scorched earth litigation tactics to get around complaining IP owners. It prolongs litigation over many years and imposes huge litigation costs on IP owners seeking justice. Many IP owners do not even file a lawsuit. They know that trying to protect what is rightfully theirs is self-defeating.
Simply put, Big Tech takes advantage of IP theft. The legal costs and potential damages, if issued after years of litigation, are insignificant by comparison.
Few companies have resisted, and the results confirm this predatory trespassing practice. The story of Google’s abuse of Sonos is one of the most telling.
Sonos is a classic American success story, and Google’s hacking of its technology is a tragedy. Sonos started as a new venture in 2005 with its pioneering patented innovation in wireless headphones. It got a licensing deal with Google in 2013, when Google agreed to make its music service, Google Play Music, work with Sonos speakers.
Simply put, Big Tech takes advantage of IP theft. The legal costs and potential damages, if issued after years of litigation, are insignificant by comparison. Adam Musoff
But Google only used that deal to gain access to Sonos technology. Soon it began making its own devices using Sonos technology, including amplifiers and other audio devices that compete directly with Sonos speakers and other products on the market.
Google didn’t have Sonos’ development costs to cover, and could support its new products and services with its massive profits from its search engine business. Thus, Google lowered the prices of Sonos – a common business practice by patent hackers.
Sonos first tried to negotiate a deal with Google, simply asking Google to pay to license the technologies it hacked from Sonos. Google held out for years, delaying negotiations as its profits swelled and Sonos lost more and more money. Seven years later, Sonos had no choice but to defend her rights in court. Sonos sued Google in 2020.
Sonos also sued Google at the International Trade Commission. This special court can move faster than ordinary courts in banning infringing imports. But it can’t reward damages.
Last August, a judge at the International Trade Commission ruled that Google had already infringed on five Sonos patents. Last week, the Commission reaffirmed that decision. Google still calls Sonos’ claims “frivolous” and promises to keep fighting.
This is just a notable example of Big Tech’s illegal use of other people’s patented technologies. It is so common that it now has a name: predatory trespass. Legal scholars and policy experts call this “effective abuse.” In plain English, this is a hack.
Unfortunately, major tech companies are attacking the US patent system to further support their piracy. Google and other companies have spent millions over the years to pressure Congress and regulators to weaken and eliminate patents, rigging the system against innovators. For example, they created “patent trolls” to discredit patent owners who are suing them for infringement – as if the problem wasn’t their own theft, but rather a grudge for their victims in response.
Washington should protect innovators and creators who rely on patents as a major driver of the US innovation economy. Congress should reintroduce and pass strong bipartisan patent law. This law will restore balance to the patent system by reforming some of the legal rules and institutions that big tech companies have lobbied to create and that are central to their unjust infringement tactics.
Sonos’ legal victory over Google confirms what policy experts and lawyers have been talking about for years: Big Tech’s predatory encroachment is the piracy of the 21st century, and Sonos is just one of many victims. Washington can and should help end this piracy.