Recently, I had the privilege of attending an enjoyable housewarming party in Brooklyn hosted by a pair of long-lost friends. Amidst the delectable food and drinks and spirited conversation a highlight of the gathering included watching video of the hosts’ recent Mexican aquatic adventure. After absorbing the wondrous quality of the production, we audience members received what amounted to a one-word response to our inquiry about the creation of the video: GoPro. How ironic, given GoPro’s recent struggle with stock performance in response to tech giant Apple’s successful patenting of digital video camera system…
As reported by the Associated Press on January 14, 2015, Apple obtained a design patent for a digital video camera, a piece of intellectual property which could have immensely negative ramifications on GoPro and its business. The patent covers a “digital camera having a remote control.” GoPro’s rugged portable cameras, one of which was likely used by my friend in Mexico, stand to suffer sales loss if consumers opt to purchase similar cameras carrying the more well-known Apple brand. GoPro’s stock tumbled upon grant of the patent to Apple, as shares sunk $6.91 to $49.87. Jan Dawson of JackDaw Research commented that Apple’s entry into a market “can be bad news for existing players.” This sort of development brings to light a number of questions concerning the role of intellectual property in the marketplace.
A patent owner enjoys the exclusive rights to make, use, sell, and offer for sale the underlying invention covered by the patent. A utility patent carries a 20-year term of exclusivity from the initial filing date. To qualify for protection the design must be novel, non-obvious, and useful. Apple has successfully claimed a non-obvious technological improvement via this patent.
An interesting twist in this particular case is Apple’s prior knowledge of GoPro’s camera. According to the disclosure of the granted patent, “the GoPro HD Hero2 digital cameras, sold by GoPro Inc, Half Moon Bay, Calif., are sold as part of an ‘Outdoor edition’ package which includes various straps, pivot arms, and adhesive mounts to enable the digital camera to capture images while performing activities such as biking, skiing, skating and kayaking.” This demonstrates Apple’s preexisting familiarity with the GoPro rugged portable cameras. Apple criticizes the GoPro HD Hero2 camera when it continues by stating “[h]owever, the HD Hero2 camera includes only a single image capture system, which captures images using an optical axis directed outward from the ‘front’ of the camera.” Apple pinpoints the need for improvement when noting that the GoPro HD Hero2 camera “can cause excessive wind resistance and presents a high profile that is more susceptible to damage and image artifacts from vibrations in some situations.” On its face it would appear as if the tech giant Apple has cut off any opportunity for GoPro to benefit from its preexisting camera.
Is innovation good for competition? Does a well-known, deep-pocketed empire like Apple pose an insurmountable threat to a newcomer in the marketplace? Certainly an argument may be made that granting exclusive rights to a patentee unfairly deprives the rest of society with the opportunity to make or use or sell or offer to sell inventions that are similar to those which are patented. After all, companies like GoPro may now be fearful of litigious backlash just for developing technology in its own industry. However, analyzing the innovation angle from a different perspective, the patent system actually serves to enable small companies to compete with larger ones. For example, a company like GoPro has every right to enjoy exclusive rights to novel, non-obvious, useful technology that does not infringe on patents of Apple or any other company. Once GoPro files an application and receives a patent on said technology, it may effectively enforce its bundle of rights during the twenty-year period of exclusivity. Patenting can be a costly operation, but recent changes in the patent legal system, including lesser fees for small entities and micro-entities, can help keep competition fair in the patent spectrum. And even a tech giant like Apple can suffer the wrath of patent infringement liability if said tech giant unfairly disturbs the intellectual property of a small company.
So while we enjoyed the vacation video of our Brooklyn friends last weekend we must now all must take into consideration the ability of Apple to offer newer, competing technology which could have catastrophic results for the business of GoPro. But could it really be that ominous? Maybe we ought to expect the wizards at GoPro to develop a new camera that presents a novel, non-obvious, and useful improvement to this most recent Apple camera. Based on what we saw in those surreal video clips of fish and dolphins, I’m sure we’ll all eagerly await the incredible cutting-edge technology that results due to this friendly competition.
Image Courtesy of GoPro.com