The US International Trade Commission ruled on Jan. 6 that Google infringed on Sonos’ patented innovations in wireless speaker technology. It may sound like an arcane legal ruling on a complicated fight over intellectual property. But it does confirm a problem that threatens America’s innovation economy and its international economic competitiveness.
The problem? Theft of intellectual property.
Years ago, big tech companies like Google decided they profited more by stealing small business intellectual property than by buying or licensing it. Google, Apple, Samsung and others – with cash reserves in the tens or even hundreds of billions of dollars – don’t sweat the legal fees, court costs or even damages they might have to pay for this flight. Google took $142 billion in cash to the bank. This is far beyond what most companies realize in terms of total annual profits.
So Big Tech takes what it wants. It then uses scorched earth litigation tactics to beat up complaining intellectual property owners. This drags out litigation for many years and imposes massive legal costs on intellectual property owners seeking justice. Many intellectual property owners don’t even file a lawsuit. They know it is wasteful and counterproductive to try to protect what is rightfully theirs.
Simply put, Big Tech profits from intellectual property theft. The legal costs and potential damages, if ever issued after years of litigation, pale in comparison.
A few companies have fought back and the results confirm this predatory infringement 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 began as a disruptive startup in 2005 with its breakthrough patented innovation in wireless speakers. It entered into a licensing agreement with Google in 2013, when Google agreed to run its music service, Google Play Music, with Sonos speakers.
Simply put, Big Tech profits from intellectual property theft. The legal costs and potential damages, if ever issued after years of litigation, pale in comparison. Adam Mossoff
But Google simply used that deal to gain access to Sonos’ technology. It soon began manufacturing its own devices with technology from Sonos, including speakers and other audio gear that directly competed with Sonos speakers and other products on the market.
Google didn’t have to cover Sonos’ development costs and could subsidize its new products and services with huge profits from its search engine business. So Google slashed the prices of Sonos – a common business practice among patent pirates.
Sonos first tried to broker a deal with Google, asking Google to simply license the technologies it had pirated from Sonos. Google held on for years, dragging out negotiations as its profits soared and Sonos lost more and more money. Seven years later, Sonos had no choice but to defend its rights in court. Sonos sued Google in 2020.
Sonos also sued Google in the International Trade Commission. This special court can intervene more quickly than ordinary courts to prohibit infringing imports. But it cannot reward damage.
Last August, an International Trade Commission judge ruled that Google had indeed infringed five of Sonos’ patents. Last week, the commission reaffirmed that decision. Google still calls Sonos’ claims “frivolous” and promises to keep fighting.
This is just one glaring example of Big Tech’s illicit use of other people’s patented technologies. It’s so common that it now has a name: predatory counterfeiting. Lawyers and political buffs call it an “effective offence.” In other words, it’s piracy.
Unfortunately, Big Tech attacked the US patent system to further support its piracy. Google and other companies have spent millions over the years lobbying Congress and regulators to weaken and eliminate patents, rigging the system against innovators. For example, they created the “patent troll” boogeyman to smear the patent owners who sue them for infringement – as if the problem was not their own theft, but the audacity of their victims to fight back.
Washington must act to protect innovators and creators who rely on patents as a key driver of America’s innovation economy. Congress should reintroduce and enact the bipartisan STRONGER Patent Act. This law would restore balance to the patent system by reforming some of the legal rules and institutions that Big Tech has lobbied to create that are central to its predatory infringement practices.
Sonos’ legal victory over Google confirms what politicians and lawyers have been talking about for years: Big Tech’s predatory offense is 21st century hacking, and Sonos is just one of many victims. Washington can and must help stop this piracy.