The Apple vs. Samsung patent war has recently been the major tech story in most mainstream media outlets: not surprising when we remember that many news organisations basically equate newsworthiness with Apple relatedness. However, with this type of coverage, it’s sometimes easy to miss some of the finer points which reveal themselves if we take a broader perspective. With that in mind, here’s 5 key conclusions worth highlighting from this episode:
1. Patent wars are now sadly a permanent cost of doing business in the tech sector – especially with regard to the extremely lucrative (and rapidly expanding) smartphone and tablet market. The $1 billion Apple has just been awarded from Samsung is not that much more than the $600+ billion it payed to Nokia not long ago to settle another IP dispute. Meanwhile, after the Apple vs. Samsung ruling, many analysts are expecting that Motorola and HTC will be next in Apple’s sights.
If I gently jog my memory I can also recall that Nokia recently launched suits against RIM, HTC and Viewsonic – while Apple and HTC last went a few rounds only last year. Patent wars are as old as the great tech rivalries (Microsoft and Apple have had a fair few over the years) and they’re here to stay in a sector that relies on very rapid innovation cycles where a year or two of being different (in whatever sense) can make a huge difference to market share.
2. Anyway the bottom line is that currently the sums being awarded in damages are not that significant to these giants – not enough to be thought of as some sort of financially crippling knock-out blow in any case. So, it’s not so much about the money (although it’s not insignificant either) but also about reputation and implications for long term prospects. Samsung’s share price took a big hit after this latest ruling for example (as did Google shares – while Nokia’s went in the other direction on account of their Windows Phone devices being relatively immune to Apple’s legal jousting).
Also, as some bloggers have pointed out – it also makes designers edgy, knowing that potential perceived infringements could end up costing millions. So, while the monetary costs are not yet prohibitive (Samsung’s annual marketing budget is 3 times the value of these damages for example), there are various other less obvious costs which will have incremental impacts. These patent wars do affect the strength of each company’s relative position – but not through short term fines – instead, it is the long term prospects for competing in a specific market that are really being fought over (in this case, Apple is seeking to handicap Samsung in the US market to which the ruling applies).
3. Ultimately however, these patent wars are a matter of interpretation – this is not the type of case where some fingerprints and DNA evidence can ensure that the same verdict be reached in any fair court. One of the most important factors is home advantage – it seems jurors are quite likely to be more understanding of a flag-ship domestic company’s arguments than those of a foreign competitor. So, in the South Korean leg of the patent war, Samsung won. In the US leg, Apple won – no big surprises there. The advantage Apple has over most of its competitors here is that its home advantage pertains to the largest smartphone market in the world.
4. Apple does not want to see Samsung go broke. Another subtlety which might elude those who only see the headlines in mainstream news – Apple and Samsung profit massively from trading with eachother by virtue of the fact that the latter provides many of the components for Apple devices. So what does Apple want? It’s not even so much as to remove Samsung from the smartphone and tablet market and leave them as mere anonymous component manufacturers working on tight margins while Apple reaps the big bucks at the most profitable end of the supply chain.
No, Apple is perfectly happy for Samsung to make smartphones – even, dare I say, touchscreen smartphones. All that Apple wants is to cripple Samsung from competing at the high-end of the market. Apples is not, and never will be, interested in producing accessibly priced, budget-mid market products – they will happily leave Samsung to dominate this is they so wish. But when it comes to the high end (i.e. devices which rival the iPhone in terms of pricing, profitability, and features – the SII & SIII for instance), Apple will fight tooth and nail to protect its position at this end of the market.
5. Apple has a massive advantage when it comes to interpretations of innovation and creativity – a direct result of the media propagated mythology that surrounds the company. One of the key issues of the lawsuit revolved around the question of whether Samsung had copied Apple’s ‘trade dress’ – in other words, the use of a touchscreen dominated device with few buttons. The answer to that question is a pretty obvious ‘yes’ (this issue related to about one third of the 33 points discussed in the lawsuit).
But what about this question: is a touchscreen with only a few buttons a ‘trade dress’ which derives solely from Apple’s innovation? Samsung lawyers argued that the answer was ‘no’ and that the idea was obvious – but the jury, having been shown photos of Samsung phones before and after the iPhone launch, were not convinced.
This is where you really need a historical perspective, as this excellent post over at OS News points out: we should not look for the iPhone’s ancestors amongst older mobile phones, though this is what Apple lawyers said we should do – yielding the obvious conclusion that Apple is a massively innovative company that deserves sole credit – and a patent – on the touchscreen-with-not-many-buttons trade dress. We should look at PDA devices which have been around for over a decade before Apple launched its first iPhone – and which prove that Apple’s role in developing and re-defining mobile phones is somewhat overblown (no doubt in part by the so-called ‘fanboy’ effect).
Indeed this is the major talking point of the verdict – and the one with most interpretive leeway. Basically some people think Apple’s iPhone was not an obvious technology back in the mid 2000′s and others think it has been obvious ever since Star Trek hit our TV screens back in the 1970′s. Nobody I think doubts Apple’s innovation in bringing this technology into the mobile phone arena and in defining smartphone design for years to come – but that does not mean that they exclusively should be able to own the ‘trade dress’ of a touchscreen with few buttons when similar devices had been around for years, different only for the fact that they didn’t make or receive calls – which hardly the iPhone’s defining function anyway.