Near-total victory for Apple stifles phone, tablet design
August 25, 2012 12:06AM
Kevin Johnson, attorney for Samsung, leaves the United States Courthouse and Federal building after a jury reached a decision in the Apple Samsung trial in San Jose, Calif., Friday, Aug 24, 2012. After a year of scorched-earth litigation, a jury decided Friday that Samsung ripped off the innovative technology used by Apple to create its revolutionary iPhone and iPad. The jury ordered Samsung to pay Apple $1.05 billion. An appeal is expected. (AP Photo/Tony Avelar)
Updated: September 27, 2012 11:35AM
Most people were expecting the jury in the Apple vs. Samsung patent fight to deliberate for a couple of weeks. But maybe it wasn’t a surprise that they handed in a decision after just three days: the venue was San Jose, Calif. If a chocolate company wanted to win a multibillion-dollar lawsuit, they’d want the case decided by juries selected from Hershey, Penn. Apple couldn’t have had any more favorable a venue than its own backyard.
Whether the home field advantage was a factor or not, the result was startling and unequivocal: a near-total victory for Apple. Almost all of Apple’s patents were upheld (the exception being their purported ownership of the basic concept of devices with rounded corners), and the jury awarded Apple $1.05 billion of the $2.5 billion they demanded from Samsung.
An award of this size means that an appeal that lasts until the heat death of the universe is inevitable. To Samsung, a company less-sexy than Apple but similarly wealthy, a $1.1 billion judgment isn’t ruinous. But if the decision stands, it’ll make it far, far more difficult, expensive, and risky to be a company that designs phones and tablets.
Apple wasn’t the only big winner Friday. Every company that already entered into a licensing agreement with Apple — essentially buying the right to make phones and tablets without getting their legs broken — is considering those per-unit licensing fees to be money exceptionally well-spent.
Microsoft, eager to finally establish their own beachhead in these markets, entered into a cross-licensing agreement with Apple several years ago. Windows Phone 8 and Microsoft Surface now have a clear run to the goal line.
The jury didn’t necessarily say, “Samsung copied the iPhone.” Technically, they said “Apple holds patents on many broad ideas of mobile device design and multitouch user interface. Samsung violated those patents, and in almost every case they did so knowingly.”
The lesson here is that the so-called Patent Wars, mostly a campaign of skirmishes before now, has suddenly turned into global thermonuclear war.
Thus, the most ironic winners on Friday were Nokia and Research In Motion. These two companies, driven to their knees by the stagnated dowdiness of their products and intense competition from the iPhone, are now attractive companies to own, thanks to their large and longstanding portfolio of mobile device patents.
Google spent $12.5 billion to acquire Motorola’s mobile division last year. If they wanted Motorola for its design and manufacturing savvy, isn’t it interesting that Google’s successful Android tablet bore a prominent ASUS logo?
Samsung will be fine. The biggest losers here are consumers. If the verdict stands, then the costs of the judgment will be reflected in the cost of mobile devices. Furthermore, other manufacturers will feel the need to buy Apple’s official permission to build useful phones, passing down the possible $20-per-handset fee.
And it’s possible that the next great phone, the one that shames the iPhone the same way that the iPhone buried the Blackberry, will never make it to market. Designing and selling an advanced smartphone just became a dangerous business.
An Apple spokesperson thanked the jury, insisting that the lawsuits against Samsung were about values. “We make these products to delight our customers, not for our competitors to flagrantly copy.”
Which seems like a bold way to characterize the jury’s findings, given the esoteric specifics of the ruling.
Friday’s verdict doesn’t feel like justice. It feels like the day when Apple lost a hunk of its public persona as sweet hippies motivated by excellence and freedom, who win by making the best products.