PublishedDecember 19, 2012

Patent-less Smartphone Innovation and Global Technology Markets

(Cross-posted on Disruptive Competition Project (DisCo))

This weekend I attended the Second Global Congress on IP and the Public Interest held in Rio de Janeiro.  The Congress is intended to draw attention to the often-overlooked public interest aspects of global intellectual property policy and to offer an organized counterpoint to the so-called “maximalist” IP agenda.  Last year’s Congress, held in Washington, DC, produced an ambitious policy framework and “positive” public interest agenda titled the Washington Declaration on Intellectual Property and the Public Interest.  While much of the Congress focused on issues of knowledge dissemination, copyright protection and Internet freedom, a few sessions were devoted to patent issues.  Of these, most addressed the longstanding debate surrounding access to medicines and health innovation in the developing world, with special attention to the recent compulsory licensing of pharmaceutical patents in Indonesia and India.

But for readers of Patent Progress, another recent development in India may prove to be the most interesting.  I am referring to a presentation made by Sunil Abraham, Executive Director of Bangalore’s Centre for Internet & Society.  During his 15-minute presentation, Mr. Abraham showed a dozen different smartphones currently on the market in India, most with price points in the range of US $20-$40, and with a range of features that we can only dream about in the West.  For example, he described the “Boombox”, a fully-featured smartphone with an “Android-like” operating system sporting what looked like a 3” woofer speaker on its back, listing for a mere US $26.  We gawked at the “Pianist”, a phone equipped with a miniature piano keyboard and two (!) charging ports (US $28).  And we watched with envy as he projected images onto the ceiling using the “Classroom in a Box”, the Cadillac of the group, including a Microsoft Office document viewer, an analog tv receiver and a built-in LCD projector, all for US $113.  These devices, mostly manufactured in China and imported into India by local firms for domestic consumption, are readily available throughout the country of 900 million mobile subscribers.

Needless to say, these phones lack many of the sleek whistles and bells that companies like Apple and Samsung offer on their devices in the US, EU, Japan and Korea.  Nevertheless, their price points are ridiculously low, which is essential for the domestic Indian market.  More importantly, these home-brewed devices belie an “innovation explosion” that’s occurring in India.  They contain features both bizarre and useful that are mashed together rapidly and thrown into the marketplace hoping for the best.  Who knows if there’s demand for a smartphone with a built-in piano keyboard?  Somebody thought there might be and wanted to find out (I have my doubts).  But a phone equipped with an LCD projector?  That one I’d buy (in fact I did just that, and am enjoying it immensely, as is my cat).

The point is that the domestic Indian smartphone market, at the moment, feels free to innovate without the dampening constraint of patents, and a lot of intriguing products are pouring out of Bangalore and Hyderabad, via friendly manufacturing facilities in China.  The rub, of course, is that patents may eventually catch up with this market.  Thus, while patents covering the individual components used in these phones – radios, batteries, memory chips, speakers and the like – are largely exhausted upon their initial sale to the phone manufacturer, patents covering clever combinations of components, and their manner of operation, could still be problematic.  During his presentation, Mr. Abraham explained that he changed the names of the devices and manufacturers to protect the innocent and to avoid drawing unnecessary attention to them.  Unfortunately, the cat is out of the bag, and companies holding patents on things like audio speaker placement and electronic keyboards may now begin to flex their muscle in India.

But Mr. Abraham and his colleagues at the Centre for Internet & Society have already begun to think about creative ways to forestall the wave of patent enforcement that could overtake their country’s creative flourishing.  They are evaluating the viability of patent pools for local smartphone technology, economical ways of aggregating local content, as well as governmental interventions that may clear the way for further innovation and continued availability of low-priced high-tech devices for the domestic market.  While these approaches remain untested, and the legal fate of the Boombox, Pianist and Classroom in a Box is far from certain, the recent proliferation of smartphone products in India offers an intriguing case study of the breadth and rate of innovation that can occur in the absence of patent constraints.

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Jorge Contreras

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