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  • An Apple/Samsung Settlement?

    May 9th, 2012

    Some felt that Apple CEO Tim Cook was being conciliatory when he suggested the company would be willing to work out settlements for those ongoing intellectual property lawsuits involving Samsung, Motorola and other companies. At the same time he didn't hesitate to assert that he wanted them to invent their own stuff, so it's not as if he's willing to let them off the hook for perceived patent infringement.

    Now this week it's reported that both Apple and Samsung have reduced the number of claims of patent infringement they've filed against each other in a California lawsuit. This action was taken at the request of Judge Lucy Koh, who remarked, "I think that's cruel and unusual punishment to a jury, so I'm not willing to do it." In response, Apple cut their claims roughly in half, and Samsung is dumping five out of their 12 claims.

    But there is an admittedly slight possibility that the case may never go to trial, since the CEOs of Apple and Samsung are due to meet starting May 21st to discuss the possibilities of a settlement. The meeting was ordered by Judge Koh, and will take place in San Francisco. Magistrate Judge Joseph C. Spero has been selected as mediator.

    Now the fact that the two sides are meeting doesn't necessarily signal a settlement is in the offing. It may only be a last ditch effort by Judge Koh to get rid of the case, and may end up with little more than corporate posturing.

    Certainly, a patent infringement case on any level is difficult to try. There will be arcane legal issues to decide, and the winner may be the side with the best attorneys, litigators who are able to sort through the complexities and explain everything in plain English to the jurors. This doesn't mean the jurors are necessarily stupid. But being on a jury quite often depends on whether the people involved don't have a ready excuse to escape jury duty, have free time on their hands, can get an extended leave from their jobs, or believe in the system. Being an expert on intellectual property issues is not part of the job description.

    Assuming that Apple emerges victorious on most of their claims doesn't mean that Samsung will, of a sudden, be forced to stop selling Android smartphones and tablets. It's quite possible a jury will rule that they need to cut a deal with Apple to license their technology. Absent that, remove the infringing features and maybe restore them in a way that doesn't infringe on Apple patents. I suppose it's even possible that there will be a mixed verdict, with Samsung winning on some claims, which would probably force some sort of settlement; that is, unless extended appeals keep the case active for years.

    I suppose it's also possible that Samsung will decide to simply not build any more Android gear, and concentrate on improving their own OS, or licensing Windows Phone. Even now, it's reported that many Android licensees are paying Microsoft a fee for every unit sold to license intellectual property. Since they're already paying Microsoft, why not go all the way and use their OS too?

    Indeed, it has been suggested that Microsoft earns more money than Google on Android hardware, and consider that Google is also earning more money from the iOS too. You wonder why they bother with Android in the first place?

    Now there is also that mixed jury verdict in the intellectual property lawsuit involving Oracle and Google over Java licensing. Android uses Java, but that doesn't mean Google will be forced to write huge checks to Oracle. The money involved may be minimal, and, besides, the trial was divided into three parts, and the outcome won't be certain until the remaining two acts are played out.

    In the meantime, these ongoing intellectual property lawsuits have reportedly cost the parties hundreds of millions of dollars in legal fees. The various legal teams around the world trying these cases are no doubt earning a bundle, and it doesn't appear that the gravy train will ever stop.

    From a customer's standpoint, those legal expenses surely impact a company's bottom line, which means that prices could, I suppose, ultimately increase. Maybe not with a subsidized wireless phone plan, and Apple is large enough to absorb huge legal fees without missing a beat. But other companies may have to find other ways to cover their losses.

    The larger problem may simply be that patent laws are just too lenient, and allow for protection for inventions that simply do not deserve protection. But that's not something any of these companies can resolve, though I suppose they could lobby for more realistic laws in the appropriate countries. At the end of the day, the flurry of lawsuits may not abate for years. It has already reached a point where I expect more and more people are just plain bored about the ongoing corporate patent wars.

    Meantime, ever the optimistic sort, I have a very slight hope that Apple and Samsung will find a way to settle. While fighting vigorously over mobile patents, Apple is spending billions of dollars for parts from other Samsung divisions. Maybe they should just accept the reality of the situation, find a middle ground, exchange some cash, shake hands and get on with their business.



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    2 Responses to “An Apple/Samsung Settlement?”

    1. John Dingler, artist says:

      I want Apple to prevail. Apple lost big to Microsoft in the '80s because it failed to patent enough stuff while now it's losing to serial infringer Samsung despite patenting everything it could. It matters little if Apple does or does not patent in its quest to protect its intellectual property when infringer Samsung is wealthy, brazen, and determined to steal it all.

      Gene Steinberg Reply:

      @John Dingler, artist, Depends on your definition of "lose." Samsung's handset inventory consists of dozens and dozens of models. The volume may be higher than that of the iPhone, or at least that's what was reported by some analysts last quarter (since Samsung doesn't break out the actual sales). But Apple still earns far more profits, and no single model line outsells the iPhone.

      Apple patents everything in sight. They'd patent the toilet paper they use if they could get away with it. This defensive posture may help some, but lawsuits may still persist for years without resolution.

      Peace,
      Gene

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