Musings on Apple v. Samsung

by John Kirk   |   August 16th, 2012

As you may well know, the tech industry is currently enthralled with the Apple v. Samsung, Samsung v. Apple patent and trade dress trial. I’ve been reluctant to talk about the trial. As a wise man recently told me, the trial is bringing out a whole new level of stupid in people. No matter what I say, no matter how carefully I craft my words, I’m sure to offend somebody – and perhaps a whole lot of somebodys – and subject myself to emotion laden attacks and irrational rants springing from that newly tapped fount of stupid.

Still, I’m going to risk it. Because it’s not just Apple and Samsung who have to live with the results of this case. We all will. And there’s a few things that we should try to get straight in our minds before the trial comes to an end.

Question: If Apple or Samsung wins, will it forever alter the tech industry?

In a word,”No”.

If Apple loses this case…life goes on. Apple will have lost virtually nothing. There will be a legal precedent making it even harder for Apple or anyone else to protect their patents and trade dress. But Apple’s been living with the real or imagined consequences of that reality for years and years already. Losing the case will not change how the parties act, it will simply reinforce the status quo. A Samsung victory might even increase innovation as Apple, and everyone else, realizes that patent law is a poor form of protection and that the only real way to compete is to outrace your competitors in the marketplace. And that’s not such a bad thing.

If Apple wins the case…life goes on. Samsung pays the damages or appeals the case or whatever. Samsung is not a broken company – not nearly, not by a long shot. Samsung makes a few tweaks to their existing phones and tablets, makes them look a little different, act a little different, and their devices continue to sell and sell very well. An Apple victory might even increase innovation as Samsung, and everyone else, realizes that they have to create unique new varieties of products in order to compete. And that’s not such a bad thing.

Question: Then why is Apple Suing Samsung?

Well, it’s not for the money. Apple is asking for $2.5 billion in damages. Apple makes more than $2.5 billion in profit every 30 days. And they have $118 billion in the bank. It would be senseless for them to have devoted as many resources to this case as they have simply to pick up the monthly rent check.

And it’s not for the injunctions. Most of the disputed phones are already off the market. Some of the rest soon will be. And for those that remain, most can be “cured” of patent infringement merely by making some minor tweaks in their existing software.

And it’s not to drive Samsung out of the mobile computing business. $2.5 billion is a lot of money and Samsung doesn’t sport the hundred billion dollar checking account that Apple does. But Samsung could literally write a check for that amount and then go their merry way. The potential damages – which will be delayed for years and possibly be mitigated by an appeals court – may be substantial but they’re not going to significantly alter Samsung’s prospects or change the balance of power in the tech world.

Question: So why? Why is Apple doing this? What is this all about?

This is a warning shot fired across the bow of the entire computing industry. “Violate our patents,” Apple is saying, “and there is no amount of time, effort and expense that we will not expend to take you to court in order to rectify the matter. “Mess with us,” Apple is saying, “and we will come after you with everything we’ve got. And we are relentless.”

Apple’s purpose, in other words, is to put a stop to FUTURE infringements of their intellectual property.

Question: Will Apple’s strategy work?

Maybe so.

Even if Apple loses this case, they’ve made the point that if your product drifts too close to theirs, they can tie you up in court for years and years. And if Apple wins the case, well, they’ve turned that warning shot I mentioned, above, into a 2.5 billion dollar fusillade.

Question: Is Apple’s strategy wise?

Maybe not.

I see what Apple is trying to accomplish here but, – and this is going to sound strange coming form an attorney – personally, I wish they hadn’t tried to use the courts to solve their patent problems. Seems like an awful lot of trouble for very little return. Feel free to disagree. I’m quite sure that Apple does.

If, in some fantasy world, Apple CEO, Tim Cook, came to me for advice on this matter, I’d tell him this:

“Patents and trade dress don’t much matter. You may have a legal right to enforce your patents, but as a practical matter, they are virtually unenforceable.”

“Apple is a leader. Act like one. Other companies are always going to copy you. Get over it. Out innovate them. That’s what you’re good at. Do what you do best and do it faster than the rest. As a company, Apple will always be a lot more successful in the open market than they’ll ever be in open court.”

John Kirk

John R. Kirk is a recovering attorney. He has also worked as a financial advisor and a business coach. His love affair with computing started with his purchase of the original Mac in 1985. His primary interest is the field of personal computing (which includes phones, tablets, notebooks and desktops) and his primary focus is on long-term business strategies: What makes a company unique; How do those unique qualities aid or inhibit the success of the company; and why don’t (or can’t) other companies adopt the successful attributes of their competitors?
  • Rich

    “Patents and trade dress don’t much matter.”

    John, the post seems right but I do have a question: Do you think that the US patent system has any usefulness at all?

    • FalKirk

      “Do you think that the US patent system has any usefulness at all?”-Rich

      That’s a great question, Rich, and I don’t feel qualified to answer it. One would have to perform a comprehensive study of the law and the philosophy behind it to make such a sweeping determination. (Or, at least, this “one” would.) Patent law is literally written into the Constitution of the United States. I would not discard it lightly.

      My short answer to your question is that yes, of course, patent law has validity and usefulness. My long answer is that winning the battle is not always the same thing as winning the war. There’s a long history of companies – even the Wright Brothers, I believe – who have ruined their businesses by focusing all of their efforts on protecting past patents.

      Apple, and companies like Apple that make their living by leading the pack, may be better served by focusing all of their efforts on moving forward rather than diverting some of those efforts towards slowing everyone else down.

      Patent everything like crazy. Then run your business as if you have no patent protection at all. Run. Run just as fast as you can and never look back. Because if you do, you’re not going to like what you see.

      • twilightmoon

        Even marathon runners have to stop at some point. Apple has carried the computer industry on its back for a large portion of its 30+ years of existence. They were at the forefront of the original PC revolution with Apple II, then they moved everyone to GUI based on inspiration from Xerox PARC research center, they had the Newton before Palm was able to make it smaller and cheaper, they were one of the first makers of laptops, the first useful MP3 player, first usable online music store, first useable smartphone that did more than text and email, and first maker of a useful and popular tablet computing device.

        Through all that they were copied, repeatedly. In Macs, it cost them not only the computer market but almost their entire existence. Out innovating is a nice buzz word but in the real world its rare for a company to be able to innovate fast enough to stay in business when others are ripping off all their ideas.

        Patents may not work, I don’t know. But if they don’t I think we are all in trouble, because we need innovators to have the incentive to put in the very hard work to create new things and not worry about being ripped off 6 months later.

        • http://twitter.com/hurtle24 Hari Seldon

          Well said, I sometimes struggle to encapsulate Apple’s contribution and how they are continuously being ripped off. I may have to steal your first paragraph for other comment threads because you made your case so succinctly.

          • twilightmoon

            I just laid out facts, I make no claim on authorship of facts. Feel free.

        • FalKirk

          “Even marathon runners have to stop at some point.”-twilightmoon

          Two things. The idea of connoting a business with a marathon runner is a nice analogy, but it’s only an analogy. In real life, marathon runners have to stop while businesses can never afford to stop. Perhaps that’s why theres’ such high turnover in business and perhaps that’s a good thing.

          The rest of your response, which is really good, seems to supports my position rather than refute it. Apple HAS been running faster than the rest of the industry. Apple didn’t fail in the eighties because of failed patent litigation, they failed because the rested on their patent laurels.

          It may be unfair – heck, it IS unfair – but in business, there’s no rest for the weary. It’s innovate or die. And if you’re a student of economics, you know that that’s a good thing.

          • twilightmoon

            I don’t support your position, because you state that running fast by innovating is enough to stay ahead of people that can copy you (possibly cheaper) merely 6 months later, for work that may have taken you years or even most of a decade. It’s simply impossible to innovate faster than people directly copying you, because it is far too easy to copy in the electronics arena. It is also orders of magnitude easier and cheaper to copy than to innovate.

            Copiers should not be rewarded the way Samsung has been, they should have to earn their own money by doing their own original work. In Korea it is very common to copy the way Samsung has, but that does not mean it has to be imported into the US and that we should accept that mentality and behavior.

          • FalKirk

            “Copiers should not be rewarded the way Samsung has been…”-Twilightmoon

            Maybe not. But “fast followers” have been a big part of business thorough my lifetime and, I suspect, throughout history. In the seventies, fast followers rescued Japan from the post-world war II doldrums and turned that country into an economic superpower. As I said, it’s happened throughout history and it will undoubtedly continue to occur.

            Now Samsung may or may not have stepped over the line. I’ll let a jury decide that question. But regardless of whether one supports patents or not, innovation, not litigation, is the only way for a business to insure its continued survival.

          • twilightmoon

            FalKirk, do you know if those fast followers nearly duplicated the design and appearance of the products that they were “fast following”? Was there any respect for original design?

          • FalKirk

            “FalKirk, do you know if those fast followers…”-twilightmoon

            I wasn’t a student of the game back then, Twilightnoom, so I can’t answer your question. But I do know that Americans were quite bitter and thought that Japanese business practices were terribly unfair.

          • twilightmoon

            twilight moon.. lol noom. Fair enough, I’ll just assume the situation was similar back then, but unless there was direct copying of trade dress back then, it’s not an exact 1:1 replica of today’s situation.

          • FalKirk

            “twilight moon.. lol noom”-twilightnoon

            Ha! So sorry. An unexpected attack of dyslexia on my part? Thank you for taking my wholly unintended mangling of your name so graciously.

            Feel free to call me KalFirk or whatever. I assure you, I’ve been called much worse.

          • twilightmoon

            “twilightnoon” ha ha.. I guess that’s an improvement from twilightnoom, you’re getting closer?

            I don’t sweat small stuff like that, if someone wants to disagree with me or call me a name, that’s on them. It’s no reflection on me. I see no need to pick on your name. :)

            You are welcome to disagree with me, or point out where any of my views or ideas are flawed, I’m always willing to learn new things. I learn much from people I disagree with, if they can present their arguments well.

          • FalKirk

            Thanks again, twilightmoon. It’s debates like these that make the tech.pinions comment section so very valuable.

        • steve_wildstrom

          Apple has indeed been a great innovator, but you give them too much credit. They were actually somewhat late to the laptop game, for example. And t wasn’t imitators that nearly did Apple in in the late 1990s, because by then no one was copying them. The company’s problems were a bad product line, bad execution, bad supply chain management and, especially after 1995, a badly aging operating system.

    • steve_wildstrom

      I won’t speak for John, but for myself, I’d say yes, without question. I think the case for both software and design patents is very weak, but in the pharmaceutical industry, patents are essential. Drugs are relatively easy to copy–patents generally disclose the chemical formula–and without patent protection is would be all but impossible for the inventor of a new drug to profit from it. The different interests of tech and pharma is the major issue that has blocked serious patent reform–what works for one doesn’t for the other.

      • Walt French

        Because design patents cannot cover aspects of a design that are largely about function, there is exactly zero true innovation stifled by enforcing them.

        They merely have to do with a firm being able to carve out an identity for itself, similar to the protection that you would expect if somebody else started publishing tendentious, propagandistic disinformation under your name and likeness… hey, wait a minnit!

      • twilightmoon

        I have heard this “software patents are bad” mantra for so long. As they say, you repeat a lie often enough it becomes the truth. But it’s still a lie is the problem. Software patents are just as important and necessary as any other form of utility patents.

        Trade dress and design patents equally so. Coke has a trade mark on their coke bottle shape, they have created a brand around it. There’s no reason a competitor can’t make up their own bottle shape, and no reason they should be able to free-load off of billions in advertising over nearly a hundred years by Coke.

        I’m reminded of the movie Coming to America, with Eddie Murphy. There was a rip off of McDonnald’s in that movie that had “golden arcs” instead of golden arches. That’s essentially what Samsung has done, they have created “golden arcs”.. which are *very* different from golden arches!

        • steve_wildstrom

          You are confusing trademarks and patents (admittedly design patents muddy that water badly.) I don;t think anyone really takes issue with trademarks and trade dress.

          I don’t think software patents are inherently evil, but I think the way they have been applied by USPTO has done a great deal of mischief. There are a lot of reasons for this and it is by no means all USPTO’s fault.

          The problem is, how do we provide protection for software innovation? Lotus v. Borland rendered copyright largely ineffectual and trade secrets are very difficult to enforce. In an ideal world, the industry, USPTO, and Congress would work together to find a new form of intellectual property protection that worked for software. But that’s not the world we live in. The most hopeful thing I see is the effort to build a database of prior art that could guide future USPTO decisions.

          • AdamChew

            I maybe wrong about prior art.

            It is a term used very loosely, does it mean a picture sketch by a 5 year old which resemble some product can be called prior art.

            Or it should be a working model and perhaps in the mainstream as well to be considered prior art.

            Time to look at the term prior art again to give it more validity as today some of them are just pictures or sketches with no working models.

  • benbajarin

    Best point you made in my opinion is about outpacing the competition. Because if you think about that point it is what Apple can and has shown the ability to do which others can not. Therefore their best competitive advantage holistically may be that specific and unique trait of Apple.

    “Out innovating” is a better strategy than “out patenting.”

    • twilightmoon

      Out innovating is impossible when you are being copied by one of the largest manufacturing companies in the world that specializes in duplicating other’s innovations and hard work.

    • edski

      All you are doing is spending your money to make someone else’s bottom line bigger. Just Google smartphones before and after iPhone and do the same with iPad. It doesn’t take a genius to see the level of IP Theft that is going on here. You are correct by saying out innovate BUT they should OUT INNOVATE APPLE! Not the other way around. Stop stealing ideas from them. Let us see how smart you are and that you are willing to take the same risks that Apple takes.

  • Techpm

    I can’t see simply out innovating being a long term strategy. Innovation is a combination of very hard work – with lots of dead ends – and some luck, it’s not something a company can just press a button and churn out every day.

    If a company like Apple spends years perfecting a product only for another company to take all it’s best features into another product 6 months later, it’s unfair competition – there’s simply no time for the original company to recover the investment.
    So there needs to be a way to protect innovative products, otherwise it just doesn’t make any business sense to put in the effort of creating them. Without protection companies will just aim their engineering into lowering prices in a race to the bottom, but no actual new products. The computing industry already demonstrated that quite well.

    • unhinged

      That’s a very important point. People see Apple as able to simply release successful product after successful product; this is one of the disadvantages of Apple’s “secrecy” approach. Yes, you get the magical result – but then people don’t value the “magic” of creating it in the first place.

      We need to protect the effort and reward the risk-taking that improves our lives. It’s ultimately a matter of our philosophy and our values. Apple is fighting for what they believe in and whether you disagree with their philosophy or not you have to respect that approach.

  • Walt French

    Here’s a quote from the Pogue review of a new (after Apple suit) Samsung device that indicates how totally Samsung’s product/design sense has eroded when it doesn’t rely on Apple:

    Samsung’s apps are festooned with bizarre icons. None of them have identifying text labels, and their logos are frequently so unhelpful they may as well be random Cyrillic letters. Would you guess, for example, that to turn on handwriting recognition, you tap an icon that shows a circle in front of a mountain?

    (h/t Gruber)
    What seems to have been Samsung’s total dependency on Apple suggests a deeply parasitic relationship. At some point, a company has to break free.

    Your suggestion that Apple out-innovate Samsung is somewhat disingenuous: if they worked all those years on iPhone and iPad designs, and yet lose their advantage to copying, why should it work the next time around?

    • benbajarin

      I think the overall point is to do both but realistically Samsung has already moved on from this and while we may debate whether or not they are doing anything innovative, they are making products that aren’t as similar to Apple design wise. Software wise it gets a bit more tricky but the bottom line is that Samsung has moved on and the threat of this lawsuit plus the Apple patents will hopefully make people create new things on their own.

      I see patents as similar to a countries military. You have to have the threat of the military force for people to not mess with you. This is why they should of course keep patenting their unique creations and pursue legal battles where necessary but as I stated Samsung has moved on at this point so it seems as the point has been made.

      I agree with other comments that this will hopefully force others to innovate but as I stated and John pointed out, Apple is the clear leader right now and their ability to anticipate future use cases and future problems to solve is a strong asset and one that others can’t seem to replicate.

  • def4

    Great take, John and quite realistic about the outcomes.

    I strongly disagree though with the notion that Apple should stop suing.
    It would amount to tacit approval, both in the eyes of the law and of the public.
    I must admit one thing that jumped into my mind when reading your
    description as a “recovering attorney” is that you might have more of an
    aversion towards litigation than usual.

    Your proposed strategy simply cannot work because innovation and creativity requires an order of magnitude more resources than copying and, most importantly, much more time investment of really great people.
    Isn’t that why we invented the whole concept of intellectual property in the first place?

    It doesn’t seem possible to me that Apple could innovate faster than Samsung can copy.

    If Apple loses I don’t expect them to increase their rate of innovation as I don’t see any indication that they are running any slower than they could.
    What I do expect them to do is try to tie down as many of their important innovations to proprietary pieces of hardware they control the supply chain for.
    If they legally can’t stop people from ripping them off, they will try to physically stop them.

    If they try to avoid software only solutions, that will probably have a negative impact on time to market and the elegance of the solutions.
    And when their only competitor just copies them, only we’ll suffer, not Apple.

    • FalKirk

      “I strongly disagree though with the notion that Apple should stop suing.”-def4

      Thank you for the kind words expressed in your comment.

      In regard to the above, I said in the article “Feel free to disagree (with me)”. I suspect most people will.

  • http://www.facebook.com/ron.robertson1 Ron Robertson

    There is another reason for Apple to aggressively pursue its case. I can’t say that it is, or even should be, the main motivation for their pursuit. That is, they must protect the work of their employees, who have worked doggedly for years, with no guarantee of success in any way to make these products what they are. If I were with Apple and in a position to do so, I would aggressively pursue parasites like Samsung with all that I could because my employees deserved at least that much from me. This is the thing that’s been almost entirely absent in all these discussions about this case. Apple’s employees’ work deserves to be defended from thieves. No honest person can look at the phones and tablets Samsung produced without seeing they are blatant ripoff’s of Apple’s designs. If I had designed Apple’s products, I’d be furious with Samsung and the other ripoff corporations. I used to be a fan of Samsung’s products, thinking they were quality products. Now I look at their brand with total disgust, and will never buy another thing from them for as long as they are unrepentant thieves of anyone else’s products. They may have been thieves all along and I just didn’t know it until now. If so, then I regret ever buying anything they put out.

    I’ve been further appalled and sickened by the people who act like Apple has no right to pursue this, or get their history wrong suggesting Apple does the same thing, or makes claims about Apple that Apple never has made for itself. It’s hard to get at the truth sometimes, there’s a huge amount of misinformation, some of it on purpose, and one is forced to spend more time than is truly available trying to find out what is true. But, the truth can be found with some diligence. More unfortunately, the misinformation is not limited to Apple, it extends across all professions, particularly the press and journalism. What a better world it’d be if the press truly did its job and actually, thoroughly informed us, instead of nearly all of the most influential being worthless hacks, at best.

    • Rich

      “Nearly all of the most influential being worthless hacks, at best.”

      That’s a strong statement! Care to back it up?

      • http://www.facebook.com/ron.robertson1 Ron Robertson

        Iraq War, the upcoming Iran War, the hacks who bloviated our way into this situation. The fact that the president can now assassinate US citizens without a trial or even charges. All of this should have been ruthlessly exposed and everyone clear on, but it still hasn’t happened. If you want names, here are a few just off the top of my mind that can’t seem to do anything but hackery (once in a while they accidentally do something worthwhile): Brian Williams, Chris Matthews, Gail Collins, Bill O’Reilly, Maureen Dowd, Bill Keller, Tucker Carlson, are ones that have a reputation but actually lower the level of discourse with their stupid and vapid coverage. I miss the old site “Mediawhoresonline” who did such a great job of skewering the blowhards and bloviators.

        • steve_wildstrom

          This thread is drifting pretty far off topic. I was tempted to delete the most recent post, but it was a reply to the previous poster’s question. Let’s try to stick a bit closer to the matter at hand/

  • Jurassic

    “the trial is bringing out a whole new level of stupid in people”

    Amen to that! If I had a penny for every village idiot that said that Apple was trying to patent the “rectangle”…

    “A Samsung victory might even increase innovation”

    Actually, the opposite is likely to happen. Innovation would slow to a crawl. Why would any company spend years and millions of dollars inventing new technologies, if its competitors can then freely take and use them for themselves?

    • FalKirk

      “Amen to that! If I had a penny for every village idiot that said that Apple was trying to patent the “rectangle”…” – Jurassic

      Your post captures a lot of my thinking. I’m literally sickened by some of the discussions that are now taking place across the net. The irrationality and bile are simply out of control.

      I can’t express strongly enough my gratitude – and my relief – that this discussion has remained both civil and useful.

      I don’t expect everyone to agree with me. To be perfectly frank, my final two paragraphs took me a bit by surprise too. But it’s the discussion that counts. I don’t come to the internet to argue. I come to learn and share. And here at tech.opinions, I’m grateful that I can do just that.

      • pawhite524

        I’m on board with this with both Jurassic and FalKirk. Well reasoned and well stated to you both.

  • DrewBear2

    I’m not a lawyer, so 2 questions: Does Apple have a legal obligation to their shareholders to protect their IP? If so, did they really have any choice but to sue Samsung?

    • FalKirk

      Yes, Apple has a legal obligation to maximize shareholder value. But the courts grant corporations great leeway in deciding how best to achieve that goal. Suits are always expensive and, sometimes counterproductive. The risk has to be weighed against the reward.

      • DrewBear2

        Now that we know that Apple at least made some attempt to negotiate with Samsung, what other path do you think they could have taken? As you well know, John, this was in fact blatant copying, so Apple could not simply ignore it.

        As Ben already pointed out, the suit did at least get Samsung to modify their design somewhat. Perhaps not enough to satisfy Apple, but add the fact that it might already have deterred others from too obviously copying their devices, this unpleasant process may already have served its purpose.

        We should also remember that this case is getting a lot of worldwide press coverage. Apple has the opportunity to repeatedly use the phrase “Samsung blatantly copies…” and have media throughout the world amplify that message. Tech fans may debate the accuracy of the accusation, but I think the average consumer throughout the world instinctively accepts that Samsung is euphemistically a fast-follower.

        • FalKirk

          As I said in the article: “Will Apple’s strategy work? Maybe so.”

          “Even if Apple loses this case, they’ve made the point that if your product drifts too close to theirs, they can tie you up in court for years and years. And if Apple wins the case, well, they’ve turned that warning shot I mentioned, above, into a 2.5 billion dollar fusillade.”

  • & so

    Apple is a company that places the highest value on integrity, this is why they have gone to such great lengths with this case. This is why they have a near cult-like following. I don’t now of another company in the industry that comes close to trying to maintain the standard that Apple does and I don’t blame them for stepping up to Samsung. I truly hope Apple wins and I hope the truth about how Samsung operates behind the scenes comes out.The truth is what will hurt them in the public eye. I wouldn’t buy a samsung product again. They will do whatever they have to to get what they want, including hacking the computers of little guys who can’t do anything to stop them. Who is going to care about a small case, but apple can do something and they are. Good luck to Apple.

  • jfutral

    “This is a warning shot fired across the bow of the entire computing industry. “Violate our patents,” Apple is saying, “and there is no amount of time, effort and expense that we will not expend to take you to court in order to rectify the matter. “Mess with us,” Apple is saying, “and we will come after you with everything we’ve got. And we are relentless.”

    That makes a lot of sense and makes sense why they went after higher profile companies who have a greater capacity to fight than smaller companies that would probably quickly settle than go through court battles. It shows Apple will be as tireless as any company they go after with money and resources, like Samsung.

    Although, I do think going after Samsung in particular and more thoroughly than they are anyone else (seemingly anyway) also sends a message to potential Apple OEMs who would have advance insight to future Apple products.

    Joe