Apple, Samsung, and the white queen's gambit | Opensource.com

Apple, Samsung, and the white queen's gambit

Posted 27 Aug 2012 by 

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Now the that the jury has given Apple almost everything it asked for in its infringement suit against Samsung, what should we expect to happen next? I think it's a given that Samsung will appeal. Given the damages awarded and the obvious determination of Apple to defend its patents, Samsung has little choice but to press forward wherever it can in court.

This doesn't necessarily mean that it's ultimate goal is to prevail through litigation, because it will constantly be running into existing and new Apple patents for so long as they remain competitors in the marketplace. Ultimately, what should make the best sense for Samsung is to negotiate the most comprehensive patent cross license with Apple that it can, and maintaining a full court press throughout the world's legal venues is the best way to ensure that it can get the best terms possible in such a license.

A cross license would make great sense for Samsung, since clearly Apple is the innovation leader in the mobile device space. And since Apple likes to price to the top of the market, that means that anyone that has a license to knock off Apple products with sufficient skill can do very well, outselling Apple in number of devices at lower price points (and margins). Normally, each company would be willing to settle with such a cross license rather than exhaust its remedies in court, because each company will usually be in a position where they need the other company's patents as much as it needs theirs, so why not get out of each others way and get on with it?

But of course Apple is different, because Apple (unlike most companies) may not be willing to license its most innovative features. Indeed, if Steve Jobs was still at the helm, I think that there would be little doubt that this would be the case. Presumably, this would be the right decision for Tim Cook as well, because it is Apple's innovation and style sense that justifies its premium prices. Plus, it has boatloads of cash in the bank, and the number of devices pouring into the marketplace would generate more than enough to recover legal costs if Apple is successful only part of the time. Throw the IOS vs. Android aspect into the mix, and it's hard to see how this won't be in the courts for quite a while to come.

Indeed, Samsung has little choice, because almost any price in legal fees would be less than having its existing products barred from the marketplace. The longer it can forestall that result, the better its bottom line, even if ultimately it has to pay up on those damages. Indeed, filing an appeal is like forcing Apple to license its patents if the result is to stay a bar on the sale of Samsung's infringing products. All in all, it's a very cynical but pragmatic game.

Lately, we've all gotten used to analogizing patents to nuclear weapons, and equating patent strategies to those that would have led to mutually assured destruction. But in the case of the current patent wars focusing on mobile devices, trench war may provide a more apt metaphor.

Why? Because most legal processes move so slowly and at such great expense. It seems as if there's always another motion and another appeal, with neither side often holding any ground gained for very long. By the time all remedies have been exhausted, the technology in question may have been leapfrogged by new innovations—and perhaps new legal actions as well. In the meantime, wave after wave of lawyers and stockholder equity are thrown into the breach, while each company otherwise goes on with business, and sales, as usual.

The key to the defendant, of course, is to do whatever it takes to prevent its products from being barred from the marketplace so that it can remain competitive. The result? The plaintiff isn't getting the benefits of its patents, at least on a current basis, and the defendant is pouring its money into legal defense rather than coming up with its own non-infringing innovations.

If by now you're scratching your head and thinking that the current patent system doesn't make a whole lot of sense, well, that would be no surprise. At least if you're still on this side of the looking glass, anyway. Doubtless you would need to live on the White Queen's side of the interface between reality and nonsense to think this many contradictory things before breakfast.

This article was originally published on The Standards Blog at consortiuminfo.org and is reposted with permission. All rights reserved.


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4 Comments

gscarborough
Open Minded

I agree with you that cross licensing is Samsung's best option. In fact I think Samsung is actually a bit better off now than before the trial. While they lost $1B in the award, they gained something worth more in my opinion. The jury found that Apple had no proof that Samsung was acting in bad faith in regards to its FRAND patent pool. Apple still has to license those sooner of later. While IANAL, I suspect that at some point of stalling, Apple will lose is FRAND rights. When that happens, Apple will be dead in the water. While Samsung copied Apple, they were software patents and designs and other intangibles. They are easy to innovate around, turn over with prior art, or otherwise invalidate. There is no getting around Samsung's cell technology as you simply can't make a standards compliant phone with it. Then there are the FABs that Samsung owns. While Apple could pull most of its business to other parties, will they have the same quality as Samsung? It also leaves room for Samsung to make more Android gear. Apple does not really want to be in a position where the best hardware is going to Android devices instead of Apple. Anyway, just some of my thoughts on the matter.

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Andrew.Updegrove
Open Minded

Gary,
Indeed, there is a great deal of interconnectedness in the marketplace, and the person on top and be in the opposite position tomorrow. Apple is probably more immune than most, though, given its "go it alone" approach to design, marketing, operating system, chip designs, and so on. Where it does have to share technology with others, it's in the case of standards - although even there, Apple almost never participates in the development of new standards.

That said, there are just so many patents out there these days, it's virtually impossible to build anything anywhere in ICT without running the risk of being sued by someone, even if you developed the same technology independently.

- Andy

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NiteOwl_OvO
Newbie

Interesting blog. I'm wondering what innovations Apple is guilty of, though. When I look at their mobile products, I see nice packaging and lots of sparkle. They do a nice job assembling a quality product from off-the-shelf components. Their software is interesting and user friendly although it's not particularly stable. I know a couple of people who use their iPhones a lot and they wind up using the reset feature a couple of times a month. I just don't see anything new or innovative. I've asked around and the general consensus is that there are 3 features that Apple fans consider to be innovative. The capacitive touch screen, gesture interface and app support. The problem I have with giving Apple credit for those is that there is prior art. Capacitive touch screens have been around since the '80s, the gesture interface was already used on the Mitsubishi Diamond Touch product and app support was pretty much copied from IBM's Simon smartphone. So where's the innovation?

Another thing I would like to mention is that if this jury's verdict stands prior art doesn't mean anything in an IP litigation case anymore. The jurors admitted that they completely skipped the prior art and decided to assume that Apple's patents were valid. If we're going to take that stance, what's the point in even bringing these cases to trial?

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Andrew.Updegrove
Open Minded

I'm not an Apple user, so I'm not the best person to comment on their innovations directly. One distinction to note immediately, though, is that there are two types of patents involved in this litigation, one of which is "design" patents, which have a much lower threshold of novelty and differentiation from prior art (and also give narrower protection as well). So in fact, there are two separate definitions and tests for innovation in this particular law suit. The rectangular shape of the device is the most obvious (some would say notorious).

- Andy

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Andy helps CEOs, management teams, and their investors build successful organizations. Regionally, he’s been a pioneer in providing business-minded legal counsel and strategic advice to high-tech companies since 1979. On the global stage, he’s represented, and usually helped launch, more than 135 worldwide standard setting, open source, promotional and advocacy consortia, including some of the largest and most influential standard setting organizations in the world. His clients of both

Should I use a permissive license? Copyleft? Or something in the middle?