How Sonos v Google could shape the US patent narrative

In early January the home-speaker business Sonos sued Google for patent infringement before the US District Court for the Central District of California and at the International Trade Commission. For a journalist, the case had an immediate appeal. The search giant is sued on a regular basis, but mostly by NPEs rather than operating companies; and while Sonos rarely litigates, it has shown a willingness to defend its IP rights in court.

Throw in the stellar profile of both companies and the confrontation makes for a juicy story. Unsurprisingly there has already been a lot of coverage, including a comprehensive piece in the New York Times (NYT).

Sonos is by no means a small player – the company sells around $1 billion-worth of speakers annually – but it pales in comparison beside the Silicon Valley giants. What is more, as the district court complaint outlined, Sonos relies on the likes of Google and Amazon to reach customers and also has various partnerships with them that add functionality to its products.

According to the NYT story, when Sonos sent Google its terms for a licensing deal, the tech giant responded with an offer that saw it paying “almost nothing”, prompting the speaker business to draw a line in the sand. In the process, the company has effectively cast itself as a leading victim of so-called ‘efficient infringement’.

In mid-January, CEO Patrick Spence appeared on a panel before the House of Representatives’ antitrust sub-committee in which he gave further voice to the company’s grievances and urged Congress to take a stand against deep-pocketed defendants’ abuse of the patent system.

The problem of efficient infringement has been around for some time. An op-ed from the NYT’s Joe Nocera titled “The Patent Troll Smokescreen” did much to shine a light on it back in 2015. Thanks to developments such as the America Invents Act, Nocera argued, “big companies can now largely ignore legitimate patent holders”. There is also individual inventor Josh Malone’s passionate account of how he had to overcome corporate infringers in bruising litigation in order to eventually receive a healthy payout for his invention for filling multiple water balloons at once.

However, these stories have received nowhere near the amount of airtime given to media coverage of patent trolls. This is why the Sonos story could become particularly consequential – not only for the company’s own future but also in relation to how patent rights are talked about more widely.

What particularly caught my attention as I read the NYT’s piece was how the fight was being framed:

The evolving relationship between Sonos and the tech giants reflects an increasingly common complaint in the corporate world: As the big tech companies have become essential to reach customers and build businesses, they have exploited that leverage over smaller companies to steal their ideas and their customers. After mostly keeping those grievances private for years because they feared retaliation, many smaller companies are now speaking out, emboldened in an age of growing scrutiny of American’s largest tech firms.

This puts intellectual property and the ability of patent owners to protect and be fairly compensated for their rights at the heart of an increasingly anti-big tech narrative, which has become more prominent in recent years.

Other outlets and reporters have also turned their attention to the array of challenges faced by IP owners trying to protect themselves. Rana Foroohar at the Financial Times, for instance, has won a legion of fans for her reporting on what she dubs big tech’s creeping power.

If you want a sense of how the climate has changed, in August 2015 The Economist ran a lengthy piece on how it was “time to fix patents”, declaring that “today’s patent systems are a rotten way of rewarding” ideas. Contrast this to December last year, when the same periodical published a story titled “The Trouble with Patent-Troll-Hunting”, which focused on the plight of NuCurrent, a wireless charging company that, like Sonos, has been struggling to defend its intellectual property against a big tech rival (in its case Samsung) and argued that “rules to curb frivolous patent claims may encourage infringement”.

A growing band of companies (the sort that are not of the (gasp!) non-practising kind) that have found their IP infringements now fit a wider media narrative about the problems that big tech poses for competition and innovation in the global economy.

Now, before some of our readership becomes dizzy at the prospect of an uptick in their fortunes, I should point out that Joe Nocera (this time writing for Bloomberg) has been quick to predict that even if Sonos wins in court, the damages will do little to cover its real losses. Which, of course, is what efficient infringement is all about.

However, this trend still reveals a lot about how journalism works. Journalists in the wider news business want stories with real-world case examples – they like narratives about good guys and bad guys. That is because it is what their readers like. And that is also why they are much less interested in purely theoretical discussions about IP rights that will never fit into a 1,000-word brief.

While some in the patent-owning community may bemoan this reality, it does mean that the way in which intangible rights are talked about in the 2020s – especially when it comes to wider IP discussions – may look very different compared with the past decade.