Suppose that you're a small tech firm outside of the US. You come up with something you think is new and you start marketing it in the States. Things are going well. Then, one of the big US firms notices you and finds a patent in their armory that they can allege you're infringing. The firm then asks the US International Trade Commission to investigate you for patent infringement. The ITC can bar your access to the US market. The big US firm then offers to take you over (or offers a disadvantageous settlement), with the treat of looming trade action as alternative. Think that's an offer you can refuse?
Smart Technologies’ suit reminds me of that taken by US audio giant Bose in 2007-2008, targeting New Zealand’s Phitek.
Bose alleged Phitek - which numbers US airlines among its many customers - had infringed its noise-cancelling headphone technology.
In the end, Phitek settled, with terms not disclosed. (Switzerland’s Logitech also settled a similar dispute with Bose.)
Bose’s secret weapon: it could enlist the support of the US government’s International Trade Commission (ITC).
On November 29, 2007, Bose asked the ITC to investigate the importation of Phitek product to the US, alleging the New Zealand company's headphones infringed two Bose noise-reduction patents.
On December 27 the same year, the ITC voted to institute an investigation under the Tariff Act, and consider Bose's application to halt Phitek imports until the patent dispute was resolved.
It’s no wonder Phitek (which has since decamped most of its operation from NZ to Europe) then moved quickly to settle the case.
Phitek simply could not afford to be barred from the US market - and, more, barred for the mere suspicion it had violated an American company’s patents.