August 1, 2014

Begun, the Patent Wars Have

Every day, it seems there is a new lawsuit in the mobile phone industry. HTC, Motorola, Google, Microsoft, and especially Apple and Samsung are actively litigating their way through a thicket of patents. The same is increasingly happening in the rest of the IT industry. But is all this bloodshed really about innovation? Or is it, as one federal judge noted, simply a new form of intense business competition?

”The court is well aware that it is being played as a pawn in a global industry-wide business negotiation.” – Judge James Robart, to Motorola and Microsoft

I’m deeply concerned about this rash of lawsuits. No one can defend “competition by frivolous lawsuit” and retain any semblance of credibility. Patents were created to foster innovation, not to allow “trolls” to spike the competition or demand protection money. The court seems to be tiring of these lawsuits, with eminent judges like Richard Posner stepping in to put a stop to this mess. But companies have a right to sue each other, and seem intent on doing so.

The Battle and the War

Why is Apple suing everyone over patents? Why is Microsoft? Are they patent trolls, evil extortionists, or scared anti-competitors? Some people seem to think Apple is the instigator, but I believe they’re mistaking the battle for the war.

Imagine you were a Pacific Islander in 1940′s and witnessed an American bombing run on your home. You would certainly curse the evil Americans, even if you didn’t much like the occupying Japanese. But there were much larger issues at stake in World War II, and individual actions did not tell the whole story.

The same is true of Apple’s recent effort to halt the importation of Samsung-produced Google Galaxy Nexus phones. No one believes that this lawsuit is really about Google’s combined search box. It’s not even about the Galaxy Nexus. This is a tiny action in a much larger war between Apple and the entire world of Android phones.

Certainly, demanding a halt to importation of competing products over a tiny software similarity is petty and reactionary. But Apple is doing what companies do: Using all the tools at its disposal vigorously to compete with its rivals, especially Samsung. Apple is not the first company in the mobile industry to turn to patent litigation to gain an advantage, nor is it the only one currently so engaged.

Where Does This Lead?

Apple’s actions are not unique, but neither are they proper. Certainly, Samsung was attempting to “out-iPhone” Apple with lookalike devices based on Android. But Apple’s previous litigation seems to have dented this effort: Witness the work Samsung did to differentiate the Galaxy S III from any other phone.

Apple learned through previous patent and “trade dress” litigation that it can injure Samsung and force it to modify its products. Now they are continuing this effort, even with dubious patents (Google on the wrong side of a search patent? Irony!)

As Judges Robart and Posner are well aware, Apple and others are using patent litigation as another negotiation tool. They are attempting to force their competitors to give way in other business negotiations to avoid damaging import bans. But what does Apple want from Samsung?

Apple is not a troll. Although they are asking for money, I do not think the (comparatively) small amount they would win from these suits is their goal. Rather, I believe Apple wants two things from Samsung in particular:

  1. No more lookalike devices or software: Even the Galaxy S III retains the general iPhone shape, and Android still looks an awful lot like iOS to the casual user. Microsoft proved that a mobile OS can look and feel totally different and fresh. Apple wants Google, Samsung, Motorola, HTC, and the rest to move on with a differentiated Android offering.
  2. Better pricing on components: Apple is Samsung’s best customer for chips, displays, and flash. These lawsuits are a way of weakening their hand at the table while negotiating these unrelated purchases. If Samsung is less successful at selling complete handsets, they will be more willing to play ball on component deals.

It is doubtful that Apple really wants some kind of patent cross-licensing deal. After all, this would cast aside their best negotiating tool! But I imagine this is exactly what they will get in the long run. Samsung and Apple will eventually settle, with Samsung agreeing on point 1 above and the companies exchanging licenses to a whole raft of patents.

Stephen’s Stance

Apple is a corporation, and corporations are amoral. They act for advantage and profit, not the betterment of society. Either Android will be redesigned away from iOS in look and feel or Apple will continue to battle Samsung and the rest in court. This is what the system allows them to do. But a better outcome would be for American and international patent laws to be changed to restrict or eliminate software patents!

  • Level380

    Someone needs glasses or has never seen a SGS3 in real life. Here to make it easier for you here is a side by side picture of the iphone and SGS3, both even in white! 
    http://1.androidauthority.com/wp-content/uploads/2012/05/iphone-vs-Samsung-galaxy-S3.jpg

    Don’t look the same to me at all!

  • http://twitter.com/networkstatic Brent Salisbury

    Great read Steven! What is your take on Amazon getting into the mobile phone market? Whats next TVs, newspapers, oil and gas? I guess its hedging bets on the umbilical chord of always plugged in so that might make some sense. I guess they see it being close enough to the Kindle to be safe. I sure hope I can read ’50 shades of grey’ on that too.
    Thanks!

  • http://twitter.com/networkstatic Brent Salisbury

    I sure say I guess a lot. I guess I should proofread comments before i post.
    I guess. hehe laters.