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Samsung v Apple: does the law snuff out the magic?

Unless you have been living under a rock, you know that last Friday the “tech trial of the century“  — the patent battle between Apple and Samsung in the US — generated another big event. And how. After a mere three days’ deliberation, the jury delivered its answers to the 700 or so put before it. The bottom line: Samsung lost on most points, and the jury ordered a $1.5 billion verdict against Samsung.

This is certainly big, as the market reaction suggests: Samsung’s shares took a 7.5% hit in one day on the Korean stock exchange; Apple’s shares rose about 2.5%. But there are limits to the direct impact of the litigation.

In the US, commentators have noted the case didn’t address Samsung’s latest models; there are workarounds for some of the patents; and notably too the jury found that the Galaxy Tab 10.1 did not infringe one of Apple’s design patents.

The US case is also far from over. Even apart from Samsung’s inevitable application to the judge to overturn the jury’s verdict (made easier perhaps by the blinding speed of the jury’s deliberations, errors in the jury’s first verdict and their apparent decision not to read the 109 pages of jury instructions), there is also the hearing to determine the scope of any injunctions Apple might get to prevent sale of Samsung devices in Australia and, of course, appeals.

Outside the US, it would be wrong to assume that similar results will necessarily follow. Although similar issues are being litigated (and similar patents), patents are territorial (US patents are enforceable in the US; Australian patents in Australia). And the law is different. In fact, courts elsewhere have already reached different conclusions. Also on Friday a South Korean court made findings that both Samsung and Apple infringed each others’ patents. For another thing, what happened on Friday was a jury verdict that came mostly in the form of yes/no answers. That’s going to be less compelling to overseas courts than a fully reasoned judgment by a judge.

Mike Madison comments that, with all the litigation currently going on, the players in the mobile are “fucking with the magic” of technology and innovation. I think Mike means two things here. The players are stuffing up the momentum and excitement that fuels innovation in this space — which must be right. For Samsung, if you’re spending more time thinking about how to avoid patents than about what products should look like and do, that’s got to impact on how you innovate or compete. For Apple, I suspect that competition from other mobile manufacturers is good for it, pushing it to do more, or at least, find ways to do it best.

But I think Mike also hints at the fact that all this litigation tends to undermine the “magic” that sustains the IP system. The IP system is not natural (no matter how much inventors, creators, or, god forbid, tobacco companies may talk about their “human rights”). It is an artificial construct, sustained by the force of law but also by community acceptance and support. I’m constantly driven to wonder how many fights of this kind — fights over “rectangles with rounded corners” — we can have and still have people accept that the patent system as it is deserves our support. Even Richard Posner, US judge and IP-supporting academic, has been voicing doubts recently.

It’s a bit early to tell how the judgment is really going to play in how the public see patents. The parties are still trying to control the narrative. Samsung has characterised the judgment as giving Apple “a monopoly over rectangles with rounded corners”, and one that is a loss for consumers, leading “to fewer choices, less innovation, and potentially higher prices”. Apple said the verdict was a win for “values” and American ingenuity, applauding “for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right”.

I’m not sure who is going to win that public relations battle. The jury verdict suggests they saw the whole thing as a morality play, with Apple representing the forces of light, assisted perhaps by some of Samsung’s internal documentation.

But longer term, there’s no guarantee that attitude will remain. Because beyond Mike’s comments, I think there’s another narrative here. Much as Apple may paint a story about Samsung stealing from a more innovative company, there’s another view that puts Apple on far less elevated moral ground. In that narrative, Apple’s fundamentally hypocritical attitude and approach in particular is screwing around with the “magic” that has sustained evolution in the mobile phone market. Mark Summerfield has talked about this.

There have long been patents in the telecommunications and mobile phone space, but historically, their impact on companies’ ability to compete was limited because the critical technologies became part of standards licensed to all on “Fair, Reasonable and Non-Discriminatory” (FRAND) terms or were part of massive cross-licensing deals between companies. As far as I can see, Apple’s attitude seems to be that everyone else’s technology counts as standards that should be open to everyone (including Apple), but Apple’s innovations in design and user interface are for it alone. It’s the two-year-old approach to patent: what’s mine is mine and what’s yours is mine too.

As Summerfield points out, Apple is within its rights here. It hasn’t subordinated its technologies to the standards systems. But I wonder if longer term, Apple’s attitude might encourage everyone to think in the same toddler terms. And that could really stuff up the magic (and the competition) for everyone.

2
  • 1
    John Bennetts
    Posted Tuesday, 28 August 2012 at 2:17 pm | Permalink

    I need a new phone to replace my aging Nokia, perhaps one with some whistles and bells.

    What I don’t want is to deal with ramifications and implications and uncertainties of IP law and the Apple-versus-the-world fight.

    How long will I have to wait before I can make my decision confidently? Will IP law need to be re-written before clarity prevails? Will I even live that long?

  • 2
    Demas
    Posted Tuesday, 28 August 2012 at 6:53 pm | Permalink

    When Steve Jobs complained about the Windows GUI being similar to the Mac/Lisa GUI Bill Gates is reputed to have said, “If you go into someone’s house and steal the TV you shouldn’t complain if another person goes in after you and steals the Microwave”, referring to the early development of the GUI concept by Xerox (The Xerox Alto being the first “desktop” to have a GUI).

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