Apple-Samsung Patent Verdict: 3 Ways Apple Didn’t Really WinAugust 29, 2012 7:49 am ·
After scoring a major victory on the order of more than $1 billion last Friday, Apple found itself leading the pack in what is likely just the beginning of a long, drawn-out patent war. As the nine jurors of the Apple-Samsung trial handed down the verdict, it might seem cynical—perhaps even a little naïve—to suggest that Apple wasn’t the clear winner.
However, given the potential ramifications of this historic decision, the $1,049,343,540 in damages that Samsung now owes Apple is arguably minute in comparison to the overall toll that this verdict will take on Apple, not to mention the tech industry as a whole. This will ring particularly true if the court sees fit to grant Apple’s request for an injunction against eight Samsung devices.
Exit Samsung, Enter Apple? Think Again.
The first and most obvious indicator that Apple’s victory will be short-lived is the fact that would-be Samsung owners are not going to wake up tomorrow and decide to buy an iPhone instead. To be sure, should the court grant the injunction, Samsung users are likely to be outraged at the fact that next-generation Samsung devices are no longer available. This is understandable, considering the likelihood of the converse had Apple devices been on the losing end of this legal battle.
Therefore, if Apple was hoping to score a few more customers by limiting selection, it should prepare to be sorely disappointed. Given the fact that Samsung’s smartphones are Android devices, it is likely that disenfranchised users will elect to purchase a smartphone that runs on the same operating system.
Meanwhile, others will likely continue using their current Samsung phones and hold out hope that there is still a chance at some compromise being struck between the two companies. However, given the post-trial posturing of both companies, such hopes are unlikely to become reality anytime soon.
The Lingering Patent Problem, And Apple’s Pending Fate
Another costly side effect of the Apple-Samsung has to do with the prevailing patent issues that still plague the technology industry. In an internal memo this week, Samsung management made a notable observation when it said the following:
History has shown there has yet to be a company that has won the hearts and minds of consumers and achieved continuous growth, when its primary means to competition has been the outright abuse of patent law, not the pursuit of innovation.
Over the past few years especially, it has become increasingly evident that companies are more interested in petty protectionism than standard-setting innovation. Unfortunately, the current patent system does very little to mitigate such a trend. In fact, given tech companies’ preoccupation with increasing legal battles being waged across the globe, the current system actually seems to encourage such rampant litigiousness in the tech industry.
Tossing aside the innovative purpose of intellectual property that patent law is meant to enshrine, these companies have elected to use these otherwise useful legal devices to wage war on competitors, causing patent litigation to soar by a staggering 230 percent margin over the past two decades alone. Among the larger firms, especially, patents have become tools for taking (and defending against) legal action. This “proliferation of [unnecessary] patents,” as iconic Judge Richard Posner accurately describes it, has shifted the focus away from the encouragement and rewarding of creative work and toward a competition among a few elite companies with deep enough pockets to play the game.
As demonstrated in this particular case, it was Apple who—with its unmatched stores of cash and its war chest of sweeping patents—came out on top…this time. As other tech elites (Google anyone?) continue acquiring patent-rich firms in this rapidly escalating “patent arms race,” it is only a matter of time before Apple finds itself in the same place it just put Samsung.
Innovation Stunted, Everyone Loses
Perhaps the most devastating result of the Apple-Samsung verdict is the negative impact it threatens to have on innovation and, as a result, the public interest. Writing for The New York Times, Nick Wingfield had a chance to gauge the general post-verdict sentiment among tech and legal experts. Among those concerned about the case’s outcome was one who suggested that the case opens up a “minefield” for designers, freezing development in its tracks for fear of litigation.
Others argued that “the scarcity of mobile developers and the complexity that they face is going to get worse,” pointing to the ailing RIM and Nokia, as well as the deceased Palm as evidence of the already-fierce climate that developers face.
Such predictions, should they ring true, threaten to bring innovation to a grinding halt.
And while these companies will still make money as the continue cannibalizing and suing each other using their arsenals of absurdly broad patents, it is the consumer (and the economy, for that matter) that will endure the brunt of the blow.
Speaking with the BBC, ZDNet’s Zack Whittaker’s words seem to echo that sentiment. Asked for his expert opinion on the effects of the ruling, Whittaker opined:
Despite the court ruling in Apple’s favor, and Samsung’s financial bruising, it will be the end user on the street who is likely to suffer the most.
Samsung claims consumer choices could be restricted by the ruling – we have yet to see in practical terms exactly how this will play out – but it’s the consumer that may have to pay a premium for the privilege of using a rival product to Apple’s iPhone.
While Apple may have won itself an extra billion dollars, the climate created by the Apple-Samsung verdict can hardly be described as a victorious one. From newly disillusioned consumers to increasingly powerful rivals, Apple’s actions certainly haven’t won the company many friends. And should the status quo remain in place, this is only the beginning.