HomeSite MapCustomer Logon
 ProQuest Dialog
Authoritative Answers for Professionals
Follow Dialog on Twitter  Follow Dialog on Facebook  Join Dialog on LinkedIn  You Tube e-Newsletters  RSS Feeds  Share

Support : eNewsletters : Eye on Innovation : Issue 3, July 2012

Eye on Innovation

Patents drive the mobile world

Cell PhoneA new revolution has emerged. The mobile device industry is innovating at approximately five times the pace of the personal computer industry.

  • Nearly 42 percent of all United States mobile subscribers now use smartphones, along with 44 percent of mobile users across Europe, including France, Germany, Italy, Spain and the United Kingdom.
  • In 2011, both the U.S. and European Union saw growth in mobile app use exceed growth in mobile browser use.
  • 64.2 million U.S. smartphone users and 48.4 million EU smartphone users accessed social networking sites or blogs on their mobile devices at least once in December 2011, with more than half of these mobile social networking users accessing social media almost every day.
  • 2011 also saw tablets quickly rise in popularity. By the end of 2011, nearly 15 percent of U.S. mobile users also had tablets — a trend seen across other markets as well.

NexusThere are more than 500 million Android and iOS (iPhone OS) devices on the market, and giant countries like China and Indonesia are only just getting started in their smartphone and tablet push. Global mobile subscribers are growing at over 35 percent year on year, and there's more room to grow — there are 5.6 billion mobile subscribers throughout the world. Even in developing countries, cheap smartphones are flooding the market. And who doesn't think tablet sales are going to surge pretty much everywhere? It is forecast that the value of the overall mobility market will top US$1 trillion by 2014 while the global mobile workforce is expected to exceed 1.2 billion as early as 2013.

Photo: Licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.

It is widely estimated that more than one billion individuals worldwide use mobile devices to connect to the Internet. And, industry analysts predict continued and explosive growth in the future. This mobility surge will affect you, your business, your life style, telecom, computer and newspaper industries, to name some, the world economy and the world view. Using Dialog technology sources, its industry and market research literature and its extensive patent collection, this issue of Eye on Innovation delves into this surging industry to assess how patents affect market leaders, offer opportunities and present challenges, and why this revolution won't end any time soon.

Source: Pew Research Center, Frost & Sullivan, Network World, Thomson Reuters

The power of patents
Ten years ago technology patents were barely mentioned in competitive deals and rarely figured in the valuation of companies. That thinking started to shift in early 2000, as more small plaintiffs began to win patent judgments against large corporations. With lawsuits becoming more frequent, the big companies are paying more attention to their intellectual property and spending more money to buy patents to defend their portfolios.

In the rapidly evolving smart mobile devices industry, the stakes are high, and patent-shopping in the mobile arena has picked up significantly this year. These portable gadgets encompass features of a phone, computer and entertainment device, all rolled into one, and run on a complex array of technologies. They provide various applications, such as voice communication, short message service, mobile banking, television (TV) watching, on-line gaming and on-demand video services. Smartphones are not just another type of handset, but full-fledged computers loaded with software, and they combine technologies from different industries, most of them patented. Given such complexity, sorting out who owns what requires time and a troop of lawyers.

Innovations in IT usually rely on many small improvements involving numerous technologies, which mean it is not always clear precisely which inventions a patent covers. This creates an incentive for firms to build up their patent portfolios to strengthen their position in negotiations. The legal struggles usually end in cross-licensing deals, in which small sums of money change hands, preferable to endless lawsuits. However, the battle over high stakes in the mobile device industry is increasingly being fought in court.

Litigation increases
The patent battle over mobile devices has become more contentious than ever. One reason is the mobile phone has provided a new platform that computing firms want to dominate. A backlog of applications at the U.S. Patent office, lucrative lawsuits filed by non-practicing entities (NPEs), which have intellectual property but no actual products, and "trolls," whose sole purpose seems to be demanding licensing fees from companies, sometimes for questionable patents, has increased litigation. Awards to these types of companies have doubled in the last 15 years. As large companies shore up their legal defenses, trolls switch their targets to the smaller "start-ups." In recent months the makers of handsets and related software themselves have become much more litigious. Google, for one, was hit by eight lawsuits in April alone, and Apple has sued important Android phone makers like HTC and Samsung.

iPadIn the tablet PC segment, the wars have been heating up for a few months with a German court stopping sales of Samsung Galaxy Tab in the European Union; this ban was later restricted to Germany alone. In a recent decision, Apple won an injunction in a Dutch court stopping Samsung from marketing three smartphone models in some European countries.

Sources: ABA Banking Journal, The Economist, Financial Times, Information Today, Gale Group PROMT, Dialog NewsRoom, U.S. Federal News, TR Daily, Gale Group Trade & Industry Database
Photo: Creative Commons CC0 1.0 Universal Public Domain Dedication.

Line up your patent war chest
Despite the litigation, however, companies are amassing ever larger arsenals of patents. Whether it's through acquisition, partnering, R&D or infringement, the industry giants are revving up their legal departments to ensure continued success in the global billion dollar mobile device market.

Major acquisitions abound
With a $12.5 billion acquisition of Motorola Mobility, the handset division of Motorola, Google added 17,000 patents to its portfolio, with another 6,800 pending. 18 key patents from this collection, used by Motorola previously to sue others, cover technology essentials, including email transmission, antenna designs, third-generation wireless, many of which date back to the early days of mobile technology. With relatively few of their own mobile patents (317 registered in the U. S.), Google now has bargaining power to protect the Android mobile operating system from competitive threats. In another huge deal the tech consortium, including Microsoft and Apple, won a $5 billion bid for bankrupt Nortel's more than 6,000 patents. Now other companies with large mobile patent portfolios, like Alcatel-Lucent, Kodak, Research in Motion and Nokia are being scrutinized as possible targets for licensing deals or takeovers.

The Google deal highlights the growing significance of patents in mobile and the steep prices that companies are willing to pay to keep them from rivals. As the Web gravitates to mobile and patent litigation rises, patent portfolios will only increase in value.

These battles fought among the big players are being keenly watched around the world. The basic premise of patents — that they encourage innovation by protecting the creative work of inventors — is being questioned by critics, particularly when it comes to patenting software. Over the years experts point out patents have been granted worldwide for minor tweaks and basic algorithms, making it impossible for smaller firms to come up with any new product, without running the risk of patent infringement. The implications of these trends are far-reaching for the entire industry, and could have a stifling effect on innovation surrounding software patents in this age of rapid technological change.

Source: The Economist, Dialog Global Reporter, Gale Group PROMT®, Gale Group Trade & Industry Databases™, HINDU


Star Wars–no, global patent wars

Asian WomanAre patents important? China and other Asian nations think so. For example, spearheading a plan called "indigenous innovation," the Chinese Communist Party has formulated the National Patent Development Strategy (2011-2020) that aims to make China the most prolific patent-filer in the world. According to the New York Times, the Chinese plan has corporations and individual investors filing two million patents by 2015, many more than the United States. Budding innovators are being enticed to higher productivity with cash incentives and better housing, and companies with tax breaks.

Investment in China is also on the rise from 1.34% of GDP in 2005 to 1.76% of GDP in 2010, and estimated to reach 2.5% by 2020. China Daily claims China produces the largest number of undergraduate and post-graduate students, as well as doctorates in science and engineering. In a recent university standards survey by the Institute of Applied Economic and Social Research at the University of Melbourne, Chinese universities ranked higher (39) than Indian universities (48)and, according to the McKinsey Quarterly (2012), China has created the beginnings of 22 innovation hubs within life sciences and biotech industries similar to those of Silicon Valley — all to make them more competitive as innovators.

Sources: Financial Express, Harvard Business Review, Korea Times, Dialog Global Reporter

What does the future hold?
What's the future for these portable devices…again patents outline the game. It's very likely that within five years, tablets, smartphones, and other mobile devices will have permanently left PC innovation behind. This continued surge brings with it opportunities and challenges.


  • Even though there are now more smartphones sold in China than in the United States, the 24 million devices represent only a small fraction of a country with 1.3 billion people. That means a huge market still exists.
  • Elderly WomenThe mobile phone is a strong contender as a key transforming agent in the future of health and healthcare. Today wireless is powering the collection of health data, supporting diagnosis and treatment, and advancing education and research in even the most remote and resource-poor environments. Mobile devices that connect to the Cloud, monitor falls for seniors and the disabled from anywhere and pinpoint their position so help can be on the way in a matter of seconds.
  • New innovations in mobile banking are making it possible to transfer the entire payment experience from the plastic credit card to a mobile device. Not only can you check your bank balances on the go, but apps loaded on a smart phone enable you to "communicate" with the payment systems of retail stores, eliminating the need to stand in line to make a purchase or even to interact with a sales clerk. Will actual credit cards become a thing of the past?
  • PhoneWorld-wide smartphone growth will move at a faster pace in emerging markets into the future.
  • The smartphone accessory market is currently valued around $20 billion annually, and expected to grow to approximately $36 billion by 2017.
  • Mobility adoption will be worldwide. In fact, Brazil, Russia, India, and China (the "BRIC" countries) will lead in both mobility adoption and innovation.


  • Businesses must maintain a watchful eye on security. They face a number of threats from the increasingly common use of smart phones and tablets by their workers, including malicious software that attacks the operating systems, or the loss or theft of devices often laden with corporate information.
  • Gartner, a market research firm, notes that by 2013, a typical Fortune 1000 company that deploys business-to-employee or business-to-consumer mobile applications will use at least six different combinations of mobile platform, architecture and development tools.
  • The value of a patent can change dramatically, according to who owns it, whether or how they plan to use it. This can cause companies to overpay for patents and fail to conduct the proper due diligence to assess their worth.

Sources: San Francisco Chronicle, Financial Times, PR Newswire, ABI/Inform, NewsBytes US, Dialog Global Reporter

An abundance of affordable and powerful mobile technology is enabling businesses to drive growth and revenue in ways they never thought possible. More workers are performing tasks outside the office than ever before. Mobility offers vast potential to make workers more productive and able to act spontaneously when inspiration or opportunity arises.

Source: Derwent World Patents Index US 20120134321
By facilitating faster sales, supporting real-time customer service, increasing collaboration and providing immediate access to business data anytime, anywhere, many companies worldwide — maybe yours too — have recognized that making the move to mobile could transform the way they do business. Because of major advantages of mobile devices, corporations are still looking for a piece of the action. Google's new tablet Nexus 7 is being challenged for patent infringement by Nokia even as it heads for rollout. Who will be negotiating with whom? Will licensing be the answer? Whatever the final outcome, the patent wars continue to rage on.

top of page

Subscribe now...

Sign up to receive this newsletter in your inbox as soon as it's published.

Already a subscriber?

Update your newsletter profile or opt-out.

China's approach to innovation

China FlagsAs we discussed in our last issue of Eye on Innovation, open innovation is thriving and more developing countries are using this strategy to help them compete in the global marketplace.

China, as the second-largest economy behind the United States, is looking for ways that Chinese businesses can improve their innovative performance. Chinese firms are widely implementing an open innovation approach to strengthen innovation.

These companies use:

  1. technology in-licensing agreements to obtain access to technologies;
  2. long-term alliances with foreign partners to access state-of-the-art technologies;
  3. collaboration with local universities and R&D institutes to broaden their technological strengths; and
  4. collaboration with the local industrial community to deepen their technological skills.

Combining these strategies offers local and multinational businesses in China, including many high-tech firms, the opportunity to improve their performance to compete with other economies despite that they have only recently joined the global marketplace. Review the Dialog Innovate page for more on Chinese innovation business strategies.

Source: Dialog NewsRoom International, Journal of Technology Management

Don't miss the next issue of Eye on Innovationsubscribe today.

Share Dialog

Keep up with Dialog on your favorite social media site:

  ProQuest   |   About Us   |   Site Search   |   Site Map  
Copyright Notices   |   Terms of Use   |   Privacy Statement