Streaming Is the New IP Battleground (Second Request)

Hey everyone, and welcome to Second Request, the Capital Forum's podcast where we explore solutions to monopoly problems.

I'm Teddy Downey.

And I'm Arjun Singh.

Today on the show, we're going to be doing a deep dive into IP litigation in the tech sector, specifically in the streaming markets.

I think before we get into that, we should review some history.

Arjun, are you familiar with the smartphone

wars? Are you talking about back in the 2007s with the iPhone and Blackberry? I did see that movie, which was quite good.

Not

exactly what we're talking about today.

That is one version of the smartphone wars.

Today, we're looking at the big legal fights in the 2010s between phone makers over patents, like Apple suing Samsung over the use of round corners.

But relevant to the show is that Qualcomm, a telecom company, invented and patented a lot of the cellular technology that goes inside smartphones like 3G and 4G.

They charge phone makers licensing fees on basically every phone sold, which raise antitrust concerns.

My two guests are Christy Thaney and Kirti Gupta.

They're both Qualcomm veterans who remember those legal battles.

And they're applying those lessons to some of the themes we're seeing today.

Christie is a policy, legal, and communications consultant at CTG Advisory, and Curti is vice president and chief economist of global technology at Cornerstone Research.

They walk me through the history of these smartphone wars and patent wars, what they saw up close working for Qualcomm.

We talk in this conversation a lot about being under fire from the government.

phone makers, and other firms led Qualcomm to develop a really intricate patent defense strategy.

Then we talk about how this battle over cellular technology has somewhat transitioned into streaming with the same kinds of IP strategies, but now a different sector.

I think for me overall, Qualcomm has a holistic way of applying their legal strategy, their comm strategy, their government strategy, their lobbying strategy.

It's all part of the same.

We're going to defend our technology and we're going to use all the tools in the legal ecosystem toolbox to do that.

And so their business people are in touch with their legal people.

And so it's a very comprehensive strategy.

You can criticize it for... being monopolistic or otherwise defending a monopoly.

And there are definitely criticisms, but I think what I like about how they think and how their strategists talk is everything is informing, every part of the law is informing another part of the company.

They're strategically looking at the whole picture holistically.

which is how we like to do things at the Capital Forum.

And so I think that lets you spot certain trends.

It lets you see how things will play out a little bit differently than if you're myopically just looking at lobbying or just looking at patents or just looking at different types of laws and strategies.

They just had a very rich understanding of how all these things work together.

Yeah.

And this I really love this conversation.

I learned a lot of new things from here.

But I think that the biggest revelation for me and for anyone listening is that they really give you an inside look at why some technology companies have become such powerhouses.

You know, when we think about tech today, of course, we know our Apple computers and, you know, Samsung TVs and things like that.

But we rarely hear about the companies that undergird all that.

And this is very critical in the microchip supply chain.

These companies that just happen to create a niche product that almost every cell phone has to use or maybe, you know, anything that was a microchip might need to use.

And that can create market distortions.

It can create power imbalances.

But to me, that's the hidden story of tech and big tech that we here at the Capital Forum are always trying to emphasize.

So let me ask you the streaming aspect.

If this was all about in the smartphone wars, the infrastructure inside of a phone, what is the technical issue at the heart of streaming? Is there some other embedded technology there? I think the key thing,

and I want to leave this technical conversation for the experts on the call, but I think the key thing to think about when you're looking at these IP themes is there are standard setting bodies that set the standards.

Those standards then lead to a situation where anyone in that technology has to pay for that standard, has to pay for that license.

And so then those licenses have to be sold on fair and reasonable terms.

Now, who defines that? Well, the courts.

If you can't have voluntary agreement, the courts do it.

And so you have this dynamic where you can wait years to get court resolution on what a fair price is.

And in the meantime, different companies with different standard essential patents can weaponize that IP.

And that's how you get antitrust concerns.

And that's It's really when someone is willing to weaponize that standardized patent where you get into problems.

And we just had a really rich conversation about how that applies in the streaming wars going forward.

And also the other thing I should mention, there's also an interesting conversation about non-competes and the trend of tech companies moving away from non-competes.

in terms of pushing those in employment contracts and focusing more on trade secret litigation to protect trade secrets.

That was another thing that brought up really, really interesting conversation, a lot going on there.

So I hope everyone enjoys it.