What impact will the Samsapple trial have on you and me?

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Apple versus Samsung has been great news for the legal and tech journalist fraternity. The lawyers have been churning out billable hours, and the journalists have been churning out tons and tons of reports, special reports, and analysis. Great fun if you can keep up. What got me thinking is what all this hype and reportage has got to do with me and my shiny gadgets. The answer luckily is very little.

The media circus that has ensued over the whole Apple versus Samsung patent debate has focused primarily on the claims and counter claims, and very little on the impact on our daily gadget lives. Patent wars have been part and parcel of the business landscape since time immemorial.

Intellectual property was, and is, a big part of any corporate asset base. Any company that creates, discovers any process or product, that gives it an edge in the commercial world, will always seek to protect that asset, and savvy lawyers will find ways of doing so in order to preclude other, any others, from copying that work.

On the surface it makes good sense: if you took the time and trouble to create something unique you have full right to protect your product or service against those that simply watch and copy. Research and development via reverse engineering or straight off copying has become a tried and tested business strategy, especially in the electronics field. The reality of this whole process is far more complex, and the case currently being heard in the USA between the two protagonists will have lasting implications for the industry and the patent profession.

Back to the key question of what impact all this will have on you and me. Many analysts have decried the Apple action as having the potential of stifling competition and ultimately ingenuity. I disagree, protecting your interests and making super profits from your clever inventions, will work for us all. Without prejudging the case, simply innovating by mimicking successful strategies and products of those you wish to compete with, will never further the cause of innovation and discovery.

Apple has always innovated and created products and services that clearly resonate with customers. That innovation and superb ability to market and execute, has brought Apple Corporation billions in dollars of profit, and a market capitalization that is the envy of the electronics and technology industry. There is no question that Apple will use its financial clout to protect its turf any way it can. Samsung on the other hand does not have such a stellar history of innovation and execution. Samsung is however a very different animal to Apple in all respects and operate in many more diverse markets and segments than Apple.

Samsung decided to take Apple on with its mobile division, and released its Galaxy range of products after seeing the success of Apples iconic iPhone from 2007. Samsung’s strength in manufacturing, distribution, and now marketing, has taken it from an insignificant Korean manufacturer, to a world leading electronics power house. Samsung has deep roots in manufacturing and technology innovation in electronics especially at the component level. A case in point is that as much as 30% of the iPhone components were made by Samsung.

When the Galaxy SII originally came out, many people asked me directly if that was the new iPhone and was I enjoying using it. No patents were read, and no scientific process was followed, but anecdotally many people just could not tell the differences. When I received the first Galaxy Tab 10.1 exactly the same conversation ensued. The average man on the street just could not tell the difference, from a quick glance.

This leads back to the patent case. Apple contends that Samsung copied it and no matter which side of the fence you sit, there is no doubt that initially at least, Samsung carefully followed a successful market trend, led by Apple and its products, and very successfully manufactured and distributed a range of product all over the world that became great success. Samsung has followed this up with more of the same, more products more distribution and much more marketing. All this took the latest mobile device the Galaxy SIII to the position of being one of the fastest selling gadgets of all time.

Apple will in all probability win the current battle and will prove that without its patents and without its innovation, Samsung may not have brought out or at the very least been successful with its Galaxy range of mobile products. The net result is that all this will cost Samsung a few billion dollars, and it will have to re-engineer certain elements of its products to comply with any court order. Much of that process is already complete, with its new products such as the Galaxy SIII and Galaxy Note 10.1 with stylus, looking and feeling very different to anything Apple currently has on offer.

Samsung could write its loss in any patent case off to Research and Development costs, and in my opinion that would be money very well spent, as world leading bestselling tech is really hard to do in this day and age of daily tech wonders. Apple on the other hand will add to its pile of cash any award it receives and continue to wow us with cool new cutting edge gadgets, that only it can produce and market in its inimitable style. As I said nothing much changes, the lawyers get rich, the big protagonists carry on doing what it does, innovation does not suffer, and the imitators make a good living. Samsung Apple and all the others will also no doubt meet in court for the next round sometime soon.

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  • Greg Mahlknecht

    >When I received the first Galaxy Tab 10.1 exactly the same conversation ensued. The average man on the street just could not tell the difference, from a quick glance.

    The court case revealed that 9% of Tab 10.1 returns were due to product confusion. A quick Google reveals the Tab 10.1 had 2% return rates. The actual evidence is that 0.2% of people were confused enough to buy the wrong tablet. Even if only 1 in 5 returned them, that’s still 1% confusion. I’ve never bought into significant amount of buyers getting the wrong product. I find most people call tablets “iPads” – it’s become a generic term for a tablet, like Googling=searching and Hoover=vaccum cleaner. This doesn’t mean people can’t tell the difference. I’ll be standing right next to a vaccum cleaner with a giant “Electrolux” brand on it and still call it a Hoover. This is what I believe Apple are trying to capitalize on.

    Apple’s patent claims are shaky at best, Samsung did a very thorough job at showing prior art on pretty much everything in the patents, and were very methodical and scientific about it. Apple’s lawyers were more like the bad-guy TV lawyers, and I felt a number of times they were trying to mislead the jury. The best example is this – the slide we’ve all seen, the “Samsung before iPhone” slide: http://d35lb3dl296zwu.cloudfront.net/uploads/photo/image/7479/3-001.jpeg – when in reality, a more complete picture looks like this: http://d35lb3dl296zwu.cloudfront.net/uploads/photo/image/7495/Screen_Shot_2012-08-21_at_5.52.09_PM.png

    If Apple win here, they’re going to go after everyone for everything. It will be an awful precedent for the tech industry. I believe that there is a place for patents, and they’re important. But these aren’t them. Both parties need to lose their claims.

  • Steven Ambrose

    All good points. My main point was that not much will change for now, no matter the outcome, even taking into account the fact that that Apple won. The other main point is that with out Apple iPhone no matter what the prior art was, there would have in all probability not been the hugely successful Galaxy range from Samsung. I believe that innovation will not suffer, and in many ways Samsung and others, will simply have to be far more adventurous and innovative to succeed. Samsung certainly can afford the R&D.

  • Greg Mahlknecht

    >
    The other main point is that with out Apple iPhone no matter what the prior art was, there would have in all probability not been the hugely successful Galaxy range from Samsung

    The world was moving towards smartphones regardless of the iPhone, and if for arguments sake Samsung did become successful from copying it – if they wanted to become the #1 smartphone company by copying the leader, they’d have just copied whoever was #1 instead of iPhone.

    For years in the dumbphone days, the entire world aped Nokia phones, they were the clear leaders. Then when Blackberry were the world’s darling, that form factor of phone was copied. Those companies didn’t go a litigious rampage, as they recognized they stood on the shoulders of giants to get where they were, and now they’re the giants being used to advance the industry. Apple’s not going to be top of the heap forever, and they’re well knowing for copying (sorry, BEING INSPIRED) by others, and this might all come to bite them in the bum then.

    While I think Samsung overreached and the trade dress infringements might have been justified, all the rulings upholding the patents were absolutely not justified, and I think that’s the problem that will have a lot of knock-on consequences in the tech industry. During the trial we saw some of Apple’s prototypes – one looked quite like the Lumia. It’s clear that Nokia reached that design by themselves, but maybe Apple has an obscure patent on it? How much more work do device makers need to do, now that utterly stupid patents have won this high-profile victory?

    > Samsung certainly can afford the R&D.

    Indeed, I think they’re topping $10bil this year, highest R&D spend in the world of any company.

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