Airbus Challenges Patent on Fuel-Saving Winglets Used by Boeing

[Ex 9A Guy]

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Airbus Challenges Patent on Fuel-Saving Winglets Used by Boeing

By Susan Decker - Dec 1, 2011

Airbus SAS, the largest aircraft maker, sued a partner of Boeing Co. (BA) to avoid paying patent royalties for wing tips that make airplanes more fuel-efficient.

The lawsuit filed today in Austin, Texas, asks the federal court to declare that the Aviation Partners Inc. patent is invalid and that Airbus doesn’t infringe. Closely held Aviation Partners, which has a joint venture with Boeing to make winglets that reduce drag on an airplane, has “stated repeatedly” that Airbus must pay royalties, according to the complaint.

Airbus is adding “Sharklets” to some of its newer planes to reduce fuel burned by 3.5 percent. The Toulouse, France-based company said yesterday that a new A320 narrowbody airplane model with the Sharklet devices completed its first flight. Aviation Partners owns a patent issued in 1994 for a “blended winglet,” and Chicago-based Boeing formed a venture with the company in 1999 to expand use of the devices on Boeing jets.

“API’s threats are a significant hindrance to Airbus and, without an early resolution, place Airbus at a competitive disadvantage,” Airbus, a unit of European Aeronautic Defence & Space Co. (EAD), said in the complaint.

A representative for Boeing, which wasn’t named in the lawsuit, couldn’t immediately be reached to comment. An unidentified person who answered the phone at the Seattle office of Aviation Partners said the company had no comment.

The case is Airbus SAS v. Aviation Parnters Inc., 11cv1030, U.S. District Court for the Western District of Texas (Austin).

To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net;

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net

®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.

[mrlupin]

Don't patents expire after 20 years? If so, Airbus has a few years to go and the whole point will be moot.

You have to love how patents prevent progress....

[DEFCON]

"You have to love how patents prevent progress"

True, but....

[Innuendo]

These guys should be the original patent holders.

[inchman]

You have to love how patents prevent progress....

I feel this is a simplistic view.

Let's say I have a great idea for a product that will make many people`s lives easier and save them money.

I can spend years and dollars perfecting it but, without patent protection, I probably wouldn't spend all that time and money bringing it to fruition, because as soon as I put it out there in the public eye, anybody would be able to copy my hard work and make money that I'm entitled to. And who would invest in my company if profits are going to be watered down by anyone who wants to copy the idea. So, I don't bother ... the idea stays in my head along with any other good ideas that I might have. Nobody will miss the product but it might have been a great boon to them or society.

Why would Aviation Partners have spent all the money in engineering and testing their product if they could not have exclusive selling rights and anyone could just come along and copy it? Had they not developed it, we might not have had this technology for the past 16 years.

So, patents encourage progress rather than stifle it.

I see no "progress" brought to the table by Airbus in this case or anyone copying existing technology. This "sharklet" looks like a direct copy (with a different name) of a product invented, assumedly at some cost and effort, by Aviation Partners. If Airbus want to use (and especially profit from) the product, they should pay for it. Simple.

[mrlupin]

I feel this is a simplistic view.

Let's say I have a great idea for a product that will make many people`s lives easier and save them money.

I can spend years and dollars perfecting it but, without patent protection, I probably wouldn't spend all that time and money bringing it to fruition, because as soon as I put it out there in the public eye, anybody would be able to copy my hard work and make money that I'm entitled to. And who would invest in my company if profits are going to be watered down by anyone who wants to copy the idea. So, I don't bother ... the idea stays in my head along with any other good ideas that I might have. Nobody will miss the product but it might have been a great boon to them or society.

Why would Aviation Partners have spent all the money in engineering and testing their product if they could not have exclusive selling rights and anyone could just come along and copy it? Had they not developed it, we might not have had this technology for the past 16 years.

So, patents encourage progress rather than stifle it.

I see no "progress" brought to the table by Airbus in this case or anyone copying existing technology. This "sharklet" looks like a direct copy (with a different name) of a product invented, assumedly at some cost and effort, by Aviation Partners. If Airbus want to use (and especially profit from) the product, they should pay for it. Simple.

I understand why patents are there Inchman. The problem as I perceive it, is that in many cases there is a lack of actual substance behind the patents. Read up on the patent wars between Apple/Google/Microsoft as a primer. The lawyers are the ones making money... Patent trolling is also an interesting concept with little to no added value.

In the computer world, Linux and open source programing stands apart exactly due to the lack of patents. If you haven't had the chance to try any of them yet,Linux based distributions are a breath of fresh air over Microsoft products. And from traveling in South America, you see more and more Linux users who now have access to web and computers thanks to open software.

I know nothing is black and white and that R&D needs to be well compensated but at some point, I think we are we rewarding the wrong behavior if the patent isn't substantially different from what has already invented. In the case of Airbus, if the plane maker has increased the efficiency of the winglet due to a new airfoil profile is it still patent infringement? Winglets were not invented yesterday, someone tweaked them and now Airbus is giving them their own tweak. In all fairness, all the airbus aircraft I have seen already have winglets.

Some interesting reading on intellectual property from the Economist

http://www.economist.com/blogs/democracyinamerica/2011/08/intellectual-property

And a 20 minute special on US patents from NPR.(linked from the Economist article)

http://www.npr.org/blogs/money/2011/07/26/138576167/when-patents-attack

[mrlupin]

Another interesting read on Patents from The economist.

http://www.economist.com/node/21526370

It seems to cover both our views. The part I think would be applicable to your view in blue and the part applicable to my view in green.

Intellectual property

Patent medicine

Why America’s patent system needs to be reformed, and how to do it

Aug 20th 2011 | from the print edition

ON AUGUST 15th Google bid $12.5 billion for Motorola Mobility, a troubled American maker of mobile phones. If the purchase goes through, it will be Google’s largest ever acquisition, almost doubling the size of its workforce. The attraction for the internet giant is not the handset-maker’s 19,000 employees nor its 11% share of America’s smartphone market, but its portfolio of 17,000 patents, with another 7,500 in the pipeline. This will bolster Google’s puny arsenal of around 2,000 patents, hugely strengthening its position in current and future legal battles with its more heavily armed industry rivals. Having been defeated in a recent auction of patents belonging to Nortel, a defunct Canadian telecoms firm, Google was clearly desperate to win Motorola’s portfolio: its offer valued the company’s shares at a 63% premium over their closing price the previous Friday evening.

The basic idea of patents is a good one: an inventor is granted a limited monopoly (20 years, in America and elsewhere) over a technology in return for disclosing the details of its workings, so that others can build upon the invention. Advanced technologies are thus made widely available, rather than remaining trade secrets, spurring further innovation. In some industries, notably pharmaceuticals, it is doubtful that the huge investments needed to develop new products would be made without the prospect of patent protection.

In recent years, however, the patent system has been stifling innovation rather than encouraging it. A study in 2008 found that American public companies’ total profits from patents (excluding pharmaceuticals) in 1999 were about $4 billion—but that the associated litigation costs were $14 billion. Such costs are behind the Motorola bid: Google, previously sceptical about patents, is caught up in a tangle of lawsuits relating to smartphones and wants Motorola’s huge portfolio to strengthen its negotiating position (see article).

What has gone wrong? The prizing of patent quantity rather than quality—lawyers are said to compare portfolios by measuring the heights of their respective piles—is one cause for concern. A second is the rise in dubious patents, particularly in the fields of software and business methods, that should never have been awarded. This leads to the third: the growing problem of “patent trolls”, or firms that treat patents as lottery tickets and file expensive, time-consuming lawsuits against companies that have supposedly infringed them.

A blueprint to improve the machinery

A patent-reform act is about to be passed in America, but it has been so watered down that it will fail to make much difference. Three much bolder reforms are needed.

First, patents in fields where innovation moves fast and is relatively cheap—like computing—should have shorter terms than those in areas where it is slower and more expensive—like pharmaceuticals. The divergent interests of patent-holders in different industries have held up reform, but there is no reason why they should not be treated differently: such distinctions are made in other areas of intellectual-property law. Second, the bar for obtaining a patent, particularly for software or business methods, should be much higher (as it is in other countries), and the process of re-evaluating bad patents should be more open and efficient. Finally, there should be greater disclosure requirements of the ownership of patent portfolios, and patent cases should be heard by specialised courts (as happens in other areas of law), rather than non-expert juries in advantageous jurisdictions in Texas. That would make life harder for trolls. These fixes would help America’s patent system encourage innovation rather than litigation.