The problem with patent litigation is that you can never know for certain how it will turn out. You may think that you have a watertight case, but if the judge (and the jury in the US) does not agree, there is absolutely nothing you can do about it. That’s why if you are going to sue someone for infringement you need to do it dispassionately and with your eyes wide open. You also need to recognise when you have a winning hand and then play it.
The day after Apple’s latest pyrrhic US victory in its on-going, multijurisdictional patent dispute with Samsung, it’s hard to escape the feeling that Steve Jobs and then Tim Cook, as well as other senior executives at the company, could have done a much better job.
As this blog discussed in October 2011, a few months after Apple launched its initial suits against Samsung, emotion and patent litigation do not mix. Taking things personally clouds your judgement and makes it more likely you will make mistakes. And as this blog has also argued, in dragging Samsung through countless courts in jurisdictions across the world all Apple has done is help its competitor, while harming itself.
Once Samsung had no smartphone or tablet business, a slight (at best) reputation for innovation and a less than stellar brand; now all that has changed. Maybe it would have happened anyway, but it’s hard to believe that the process has not been significantly speeded up as a result of disputes in which Apple has very publicly recognised that the Korean company is a major competitor whose products it wants to see taken out of the market. When you are selling at a significantly lower price point than Apple, how helpful is that? And it’s not only Samsung – other Android manufacturers have been able to piggy-back: “We’re selling something that is pretty much the same as the iPhone and the iPad, but much cheaper.” And it’s a message that is getting through spectacularly.
Of course, this would not have been a problem if Apple had succeeded in getting the injunctions that it wanted. But it hasn’t. In the US and elsewhere it has failed almost every single time it has tried. And as the years drag on, even injunctions will become less effective as Samsung has had time to develop workarounds to take away their sting.
The thing is that Apple did have an alternative. It did not have to launch thermonuclear war. Instead, it could have accepted the competition and taken a licensing toll. The money would have been nice, regular, and would have affected Samsung’s pricing point and/or its ability to invest in product improvements; but, more important than that, it would have left Samsung on its own to build its business without the benefits that three years of AppSung have delivered. The value of that latter point alone is probably greater than any revenues a deal might have delivered.
As Samsung showed in 2010/2011, when it made agreements with the likes of Micron, Intellectual Ventures, IBM and Microsoft, it was ready to sit down and talk. There was probably also a window of opportunity after Apple’s first Northern District of California win in the summer of 2012. But Apple either did nothing or its demands were way too high. Then, after Judge Lucy Koh denied the company’s injunction request in December 2012, the dispute’s narrative changed spectacularly.
Now, as things move inevitably towards a settlement at some point or another, does anyone seriously believe that Apple will end up getting the deal from Samsung that it could have got two, three or four years ago? The answer, surely, is No. That’s great news for Samsung, but also for a company based just a few miles down the road from Cupertino. What with yesterday’s decision and the sale of Motorola Mobility to Lenovo, so far 2014 has been extremely kind to Google on the patent front. If Congress now delivers litigation reform it will be time to hang out the bunting in Mountain View.
Licensing, IP litigation, Patents, IP business