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  • The Lawsuit Game: I’ll Show You Mine, if You’ll Show Me Yours

    May 31st, 2011

    At any one time, Apple may be involved in a number of legal fights. They are suing someone else for possible infringement of intellectual property rights, meaning it’s claimed that someone has copied an Apple product’s design a little too closely. In contrast, other companies sue Apple for similar reasons. Some of these are patent trolls, companies who acquire a boatload of patents, and then ferret out potential violators and demand royalties. If the target company doesn’t pay up, they’ll probably take the matter to the courts, usually in a jurisdiction that’s somehow favorable towards actions of this sort, as in East Texas.

    Among the most significant legal conflicts these days involves Apple and Samsung. This is a curious issue, because Apple happens to be a huge Samsung customer (to the tune of billions of dollars, evidently) for raw materials, such as memory, displays, and so on and so forth. So on the one hand, Samsung earns a bundle from Apple, but Apple believes (or their attorneys tell them) that Samsung is stealing the look and feel of the iPhone and iPad with competing products, generally running the Google Android OS.

    So Apple filed a lawsuit against Samsung earlier this year, citing various and sundry “Galaxy” gadgets as possible culprits. Of course, such actions can take years to settle. Even if Apple emerges victorious, the inevitable appeals can take forever, unless Samsung, realizing Apple’s impact on their bottom line, decides to pay licensing fees, alter product designs, or take additional steps to mollify one very large customer.

    As part of the discovery process, both parties to the suit will generally be expected to provide evidence to prove their case. So it stands to reason Samsung was asked to deliver samples of the key products that Apple claims violate the patents in question. In turn, as might be expected, Samsung has demanded that Apple provide prototypes for the upcoming version of the iPhone and “the next generation iPad that Apple will release, whether that product will be known as the ‘iPad 3,’ ‘Third Generation iPad,’ or some other name.”

    Of course, it’s up to U.S. District Court Judge Lucy Haeran Koh, who was actually confirmed to that post by the U.S. Senate less than a year ago, to decide whether to grant Samsung’s request. If she agrees — and Apple doesn’t appeal of course — the evidence would have to be handed over to the court by June 17.

    Meantime, this appears to be a motion that may well get the OK from Judge Koh, based on her comments about the need for reciprocal discovery at previous hearings. It would certainly seem a fair move as well, but it would create a monumental dilemma for Apple, regarded as one of the most secretive tech companies on the planet.

    No doubt the 2011 iPhone upgrade is close to production, but the next iPad probably won’t appear until the early part of 2012, unless Apple rushes it to market this fall, which, while expected by some rumor sites, doesn’t seem terribly realistic. Sure, Apple is clearly working on future generations of their ironic tablet other products, development at this stage might be highly preliminary, so any prototypes Apple would be required to turn over wouldn’t necessarily represent the final design. I presume Apple can argue that point with a reasonable degree of logic.

    The real issue, however, is how Apple would keep that information secret from the public, and what guarantees would Samsung be able to proffer not to disclose such trade secrets to outsiders — or even use it themselves. With the products Samsung has been asked to produce, I gather they’ve already been demonstrated, so it’s not as if secrets are being disclosed, other than possibly the internal hardware configuration. With Apple, it’s the opposite issue, and I wonder what sort of checks and balances a court can provide to protect the company — or will they care? Perhaps the samples would be presented in a judge’s chambers, or Samsung’s engineers and attorneys would be allowed to examine these prototypes at Apple’s headquarters, with the requirement that no information be recorded, photographic or otherwise.

    Indeed, Judge Koh might have to consider the issues carefully before she decides which ruling to make, although some sort of discovery is no doubt a given.

    Meantime, from recent press accounts, it appears Samsung expects to be involved in this case for the long haul, maintaining once again that their mobile gadgets are original designs, which do not in any way violate any Apple patents. They also claim to be unconcerned about the possible consequences, though that would appear to be little more than corporate spin.

    But surely Apple wouldn’t have filed a lawsuit if they didn’t truly believe they would prevail in the end, although I suppose it’s always possible the action is meant not to stop Samsung from building mobile gear or getting a big cash settlement, but slowing the development process. If Samsung’s engineers and attorneys had to spend extra time examining every single facet of a design to make sure that nothing in Apple’s large patent portfolio is being violated, it would take a lot longer to get that product to market. That would only improve Apple’s competitive advantage.

    Regardless of the outcome of the current motions, and the entire lawsuit, one thing is sure: Courts and judges can be notoriously unpredictable. You won’t know the final rulings until they are published, and even a good guess may not be possible, even if a judge’s comments in open court appear to point in one direction or another.

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