It was reported this weekend that current Apple CEO Tim Cook had been opposed to launching patent suits against Samsung when he was COO under previous chief executive Steve Jobs. According to Reuters, Cook’s opposition to suing Samsung was largely rooted in concerns about the damage such a strategy would cause to Apple’s working relationship with the Korean company, which was (and remains) one of its key suppliers of component technology.
After Cook took the reins at Apple, this blog wondered if the company might pull back from the ‘thermonuclear war’ Jobs sought to unleash on its Android-shipping competitors and instead adopt a more conciliatory approach. Since becoming CEO, Cook has publicly expressed his frustration at the smartphone wars; and under his leadership, Apple reached its first settlement with an Android carrier in November last year when it entered into a 10-year cross-licence with HTC and dismissed litigation against the Taiwanese company.
However, Apple’s high-profile dispute with Samsung has pressed on. Prior to going head-to-head in the Northern District of California last year, Cook and Samsung’s then-CEO Choi Gee-sung met to discuss the possibility of settling the spat. With Samsung facing the prospect of a US-wide sales ban, Apple would have possessed considerable leverage at the negotiating table. Those discussions may have been as good a chance as any for Apple to secure the best possible resolution from its perspective.
But no agreement was reached and – despite the court finding that Samsung had infringed Apple’s patents and awarding the Californian company over $1 billion in damages – Apple failed to obtain an injunction. While an injunction could yet be granted by the Court of Appeals for the Federal Circuit, Samsung can, for the time being, continue to sell its products to US consumers while figuring out any design-arounds, significantly weakening Apple’s bargaining position.
Apple has hit a few snags outside of the courtroom, too. Despite shipping record numbers of iPads and iPhones, Apple’s performance during the first quarter of 2013 failed to meet investor expectations and led to questions about the longer-term prospects of the company’s product offering. Apple’s strategy of trying to exclude its Android competitors from the marketplace through litigation may exacerbate these concerns that the company is losing its competitive edge in terms of products.
Samsung has indicated that it is willing to do deals in the past; and surely most of the other Android carriers would prefer – like HTC – to reach a settlement with the Apple rather than risk being dragged into litigation. That way, Apple could secure potentially lucrative royalty streams while reducing its competitors’ profit margins at the same time – just as Microsoft has done. Apple may have blown the chance to dicate a settlement on its terms and secure the optimum outcome from its dispute with Samsung, but Cook still has the opportunity to veer from the litigation warpath set by his predecessor and create added value along the way.
IP management, Licensing, IP litigation, Patents, IP business