What Apple’s court victory really means

The verdict is in. Apple has won its landmark case against Samsung Electronics and scored the largest patent-trial compensation payout to date. By Bradley Shaw.

Bradley Shaw

The Apple-Samsung trial had been running in the San Jose, California, federal court for four weeks, although the saga has been brewing for a lot longer with the two companies going at each other hammer and tongs for years now.

The verdict, handed down on Friday, is by far the most conclusive we have seen to date. The jury found in favour of Apple and awarded the company damages of more than US$1bn. The damages could be trebled to as much as $3bn if Samsung is found to have willfully infringed on Apple’s patents.

“This is a huge victory for Apple,” said Mark Lemley, a Stanford Law School professor, in an e-mail. “The verdict is just large enough to be the largest surviving patent verdict in history.”

There are ramifications beyond this trial. It will have an impact on other Android manufacturers, including HTC, LG Electronics and Sony, and could also have far-reaching implications involving Google and the Android operating system itself.

In response to the verdict, Google has already said the court of appeals would review both the infringement and the validity of the patent claims.

“Most of these don’t relate to the core Android operating system, and several are being reexamined by the US Patent Office,” Google said. “The mobile industry is moving fast and all players, including newcomers, are building upon ideas that have been around for decades. We work with our partners to give consumers innovative and affordable products, and we don’t want anything to limit that.”

This clearly indicates that Google is trying to distance itself from the ruling and is not, at this point, coming directly to the defence of manufacturers using Android. The statement also points out that the rulings in their current form do not directly affect Android. The company would probably have responded in a vastly different manner if this was the case.

Only time will tell whether Google’s support for the broader Android ecosystem will materialise. For now it looks like it’s going to be the manufacturers taking on Apple on their own. Of course, the stakes will be raised if Apple decides to take on on Motorola, the handset manufacturer now owned by Google.

One party that appears happy with Friday’s ruling is Microsoft. “Windows Phone is looking gooooood right now,” exclaimed Bill Cox, Microsoft senior director of Windows Phone marketing Bill Cox, on Twitter.

There are, though, alternative views — some with merit — in the marketplace.

In a blogpost,  Enrique Gutierrez, chief technology officer of Digithrive, a Los Angeles-based Internet development and design firm, said the move could actually benefit Samsung. He argued that if Samsung’s products are so similar to Apple’s, why would consumers pay a premium for Apple products when Samsung’s generally cost less?

Another view is that it has cost Samsung $1bn in damages to become the second biggest smartphone player in the world by revenue. Compared with Microsoft’s $8bn acquisition of Skype, Samsung’s $1bn penalty is small change — just 1,5% of the Samsung’s annual revenue.

The outcome of this trial could give Samsung the spur it needs to take it to the next level. Rather than being happy with its current level of innovation, it might just help drive the company into innovation overdrive in an effort to take Apple right out of the equation.

The only real loser in Friday’s verdict is the consumer, who will, at least in the short term, probably have to pay more for products that have to license Apple patents.

If Apple steps up its war on Android, tackling smaller players such as HTC and LG, it could damage these manufacturers irreparably if the outcome is not in their favour.

  • Bradley Shaw, on Twitter at @darbshaw, is managing editor of Africa Telecoms & Tech and technology editor at Rolling Stone SA
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  • http://twitter.com/ixhd Cliff Hazell

    “The only real loser in Friday’s verdict is the consumer, who will, at least in the short term, probably have to pay more for products that have to license Apple patents.”

    Wrong.
    Samsung will now be forced to innovate, which should benefit the consumer.

  • Greg Mahlknecht

    I find it rather amusing that the Galaxy S3, which can’t be mistaken for an Apple product by any stretch of the imagination, is far more succesful than any Apple iPhone so far. Perhaps with Samsung’s products looking iPhone’ish actually hurt their sales!

    I think anyone with a clue in the tech industry doesn’t buy into the “I bought a Galaxy S2 by mistake” argument which seemed to be a cornerstone of the trial – what percentage of the market walks into a shop with boxes of cellphones on the shelf, silently picks one of the most expensive ones and buys it? The S2 was a damn good phone, and while looking iPhone’ish probably didn’t hurt its sales, I really don’t think it’s the reason for its success.

    I think from a legal standpoint, Samsung might have over-reached a bit with the trade dress, but all the patent claims were entire BS, and feel that there was prior art for all of them.

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