In what has been called a landmark decision, last week saw a nine-piece California jury find in favour of Apple in one of the largest cases of its type to reach the courts. Having sued for damages in excess of $2 billion, the smartphone giant may be feeling underwhelmed by the $1 billion they were awarded, but with their stock price increasing by nearly two per cent overnight and the way paved for numerous future lawsuits, their competitors are shaking in their technology towers and are scrambling to redesign popular items to avoid more embarrassment.
The Irish Times reported that the decision is “expected to alter to dynamics of the highly competitive … industry” and they’re probably correct. Apple has essentially been given the court’s approval to rule the roost. And why shouldn’t they; they owned the design and it was stolen so aren’t they entitled to sue and win and celebrate?
This writer would be inclined to say that they do. After all, they earned the right to do so long ago; they’re simply re-affirming it by winning. However, all this talk of the changing face of technology seems somewhat over the top.. There’s a whole lot riding on a number of factors that are being overlooked and while one big case in Silicon Valley made international headlines, it wasn’t the first and it won’t be in the last in the battle of some of the biggest companies in the world.
For instance, one can look at proximity and exposure. When the jury in California returned with their decision, they did so in a courthouse ten miles from Apple’s headquarters in Silicon Valley but a jury in Seoul, South Korea, came to a totally opposite decision on the other side of the world. Apple won one lawsuit but the overall picture shows a back and forth where no one stays on top for long.
Samsung is a Korean company and that may be partly the reason the jury thought it was the correct thing to side largely with Samsung. Apple was found to have infringed two patents of Samsung’s while the latter only copied one. Samsung said in a statement that the ruling affirmed its “position that one single company cannot monopolise generic design features”. Most would call that a victory but with the Korean court banning the sale of many Apple and Samsung products and pending decisions in courts on two other continents entirely unclear, nobody has really won and it makes everything look a bit pointless.
There’s a phrase in law that has found its way into common use – “anti-competitive behaviour”. The idea behind stopping it is so that the consumer has choice and a fair chance to get a good deal. So, when Apple, Samsung or any other company takes ideas from another and incorporates it into their product, would that be covered? Like most questions in this area, the answer in unclear. Ultimately, while it may seem unfair that Samsung cannot make use of what they themselves have termed “generic features”, if they will be unable to use those designs, they have to make new ones. They will be forced to be more innovative and inventive and ultimately that will benefit them because they have designed something that people want. This also helps the consumer because it gives them a wider choice and choice is rarely a bad thing.
There seems to be little emphasis on what the sanctions and rewards really mean. A billion dollars will pass from Samsung to Apple in the next few days but for one of the largest companies the world with one of the biggest turnovers, that’s not exactly the windfall it may seem. In South Korea, Apple must stop selling items such as the iPhone 3GS and the first generation iPad while Samsung has to discontinue its Galaxy S and Galaxy Tab among others. Again, this may seem like a heavy penalty but those who know their technology will realise it isn’t as harsh as it first appears.
Considering that Samsung made a profit of $6 billion in the second quarter of this year, the settlement is a drop in the ocean. The most recent versions of the products banned in Korea can still be sold and so the impact on profits there will also be minimal. Both enterprises have been warned that the penalties will only go up and up if they don’t heed the warnings and advice of the courts and change the way they’re doing business. While a landmark case in many way, it is difficult to know whether there will be a real impact for the consumer and these companies, but the world will certainly be keeping watch.