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  • A Potential Reality Check in the Apple/Samsung Battle?

    December 19th, 2012

    As Apple and Samsung continue to battle each other in courts around the world over patent rights and licensing issues, there may be sign a possible thaw. While it doesn't mean the two corporate powerhouses will soon shake hands and make up, it's possible they've come to realize that wasting hundreds of millions of dollars has done little but enrich lawyers. It's not as if, aside from a few court-mandated interface changes to Samsung handsets, products have changed all that much.

    You can still buy iPhones, iPads, Samsung handsets, HTC handsets, Motorola handsets, not to mention those bearing the Google Nexus label. And the lawyers keep filing the legal actions. Win a few, lose a few, the lawsuits go on without an end game. Or is it just a case of fighting and fighting until someone cries "uncle."

    Is there any possibility at all that this troubling situation is going to change? Well, it's a sure thing that a company has the right to protect intellectual property. If Samsung is slavishly copying the iPhone, the iPad and the iOS, then Apple has the perfect right to use the courts to stop that practice if a simple phone conversation or email doesn't do the job. But quite often it's all about subtle interface elements that can be easily changed to eliminate the alleged infringement. That appears to have already happened in some cases, such as emulating the bounceback feature from the iOS.

    But there's now a published report this week that Samsung is dropping patent injunction demands filed against Apple in the U.K., France, Germany, Italy and the Netherlands. In the U.S., Judge Lucy Koh has denied Apple's petition to block the sale of Samsung handsets found to infringe on the company's patents in a recent trial. So while Samsung may still have to pay over a billion dollars to Apple, you'll still be able to buy Galaxy handsets and tablets. Maybe product build costs will have to include a percentage to cover ongoing legal fees.

    I suppose you've gathered by now that I think these legal actions are getting downright boring, not to mention accomplishing very little in the real world. Samsung, for example, didn't do themselves any good attacking the qualifications of the jury foreman in the case in which they lost to Apple. It all came across as a sign of supreme desperation, not a legitimate strategy to overturn a verdict they didn't like.

    But you have to wonder why the claims against Apple in Europe were dropped. Is it possible the two parties have come to their senses long enough to sit down and negotiate a possible settlement? Certainly Apple has huge pockets and can fund these legal actions for years on end. The same is true for Samsung, but it's also true that Samsung earns buckets and buckets of money supplying components to Apple for various products. What makes it all the more peculiar is the fact that Samsung's mobile division is being accused of infringing patents for products for which they built some of the parts.

    Yes, there are reports that Apple is attempting to expand the supply chain to exclude Samsung as much as possible. In time, I suppose that could happen. But it hardly makes sense for Samsung to want to sabotage billions of dollars worth of business because of a few mobile interface elements and the wrong sized rectangles and squares. Where's the logic in that?

    I suppose some of it is due to corporate pride. Samsung isn't a monolithic empire, but a sprawling conglomeration of individually managed divisions. Each has their own profit and loss statements, and business priorities. That's why there's this curious situation where Apple sues one division, but buys products from another division.

    Sure, it's obvious that Tim Cook isn't near as intractable as Steve Jobs when it comes to pursuing ongoing legal actions against other companies for possible intellectual property infringement. Or at least you'd come to that conclusion based on what Jobs said about going "thermonuclear" against Google. But that statement, quoted in that authorized biography, may be as serious as one wrestler threatening to vanquish another, to destroy one's opponent. It may be all about posturing. Surely Jobs was a savvy enough businessperson to understand that, in the end, Apple would have to strike settlements with Google, Samsung, Motorola and all the rest.

    Indeed, the recent settlement with HTC over various patent issues demonstrates that Apple can be flexible. But even when Jobs was in charge, he made cross-licensing agreements with Microsoft soon after he returned to Apple. Some years ago, Apple made a deal with Creative Labs over iTunes patent issues. Jobs was still alive when, in early 2011, Apple struck a deal with Nokia involving cross-licensing. Then again, Nokia uses Microsoft's mobile OS, not Google's, so there were fewer potential emotional roadblocks to a fair settlement.

    I only hope all these companies come to their senses in 2013. Well, if I were part of the legal team for any of these companies, I might be disappointed by the lost business. In the end, though, the real legal actions should be focused on the most blatant violations, not the subtleties, even if a company regards them as critical to public acceptance and sales.



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    4 Responses to “A Potential Reality Check in the Apple/Samsung Battle?”

    1. Richard says:

      Gene,

      A couple of things should be observed. One is that Apple is reported to be spending more on patents and patent litigation than on R&D. That's not a good sign. Another is the patents themselves and the USPTO. Some time back the USPTO acknowledged that they were reviewing a number of patents on their own initiative as it had become evident that patents were being issued which should not have been ("improvidently awarded"). Frankly, there are a great many patents are simply so obvious as to not be patentable or there is obvious "prior art". Furthermore, the world of technology patents is so interrelated and intertwined that cross-licensing is increasingly necessary in order make anything that the industry needs to lead the way in this regard (the law of such matters invariably lags behind).

      IMO Apple should be expending more effort on innovating, creating products and services people will want to buy than becoming embroiled in increasingly fruitless litigation.

      Speaking of litigation, the court in the Apple v. Samsung case in the U.S. has become increasingly displeased with the misconduct of both parties and was said to be considering throwing them both out of. court at one point. Judges are averse to granting new trials after so much time has been spent on a trial (including matters of juror misconduct), but I think it would be warranted in this case. I must disagree with you about the matter of the jury foreman though. What has been reported in the press is a text book case of what a foreman should not do. The only question is whether the court will have the courage to speak the truth of the matter and acknowledge that the jury verdict can not be allowed to stand. The integrity of the judicial system is at stake and that is more important than the time wasted. To top it all off, the USPTO appears poised to invalidate patents at the heart of the matter.

      Cheers

      Gene Steinberg Reply:

      @Richard, I always appreciate your honesty, Richard. With the jury foreman, I think we got into one of those gray areas, but the judge said no problem. So maybe it'll be addressed again on appeal. But the losing side will find any excuse to hang an overturned verdict on.

      In the long run, Samsung and Apple will make peace after all this nonsense is over.

      Peace,
      Gene

    2. Richard says:

      One other thing I believe we both realize, but neither of us expressly stated is that Tim is a pragmatic businessman. I seems evident that he will choose the company's legal battles more circumspectly than was the case in the past. I doubt we will see more "I'm going to destroy (fill in the blank) if it takes the company's last cent" press releases coming from the mothership any time soon.

      Cheers

      Gene Steinberg Reply:

      @Richard, I also think Jobs made his "thermonuclear" comment for effect. He was a smart enough businessperson to realize that, in the end, there would have to be settlements and cross-licensing.

      Peace,
      Gene

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