(Every week, Kyle St. Romain will talk about the business and legal side of the app world. While his opinions don’t always reflect those of Rocksauce Studios, you should hear him out…the guy knows his stuff!)
Last week, the jury gave its verdict on the Apple v. Samsung case. To recap, Apple sued Samsung over various patent infringements related to its popular iPhone and iPad devices, claiming that Samsung copied various design aspects from these devices and used them its own Galaxy line of mobile devices. During the trial, Apple had to reveal closely help secrets about its marketing strategy and design process. If you want to read more about the case including the secrets Apple had to reveal, check out my post titled Patent Lawsuit Reveals the Inner Machinations of Apple.
Back to last week’s news: the jury found Samsung guilty of willfully infringing a number of Apple’s patents, and awarded Apple damages in the amount of $1 billion dollars – half of the $2 billion Apple initially set out for. If the award stands, it will be one of the largest verdicts in patent history. Willful patent infringement can also be subject to treble damages (3xs) at the discretion of Judge Koh.
The funny thing about all this is that Apple really doesn’t need the money (it has $120 billion cash sitting in its rainy day account). Thus, the victory is largely regarded as symbolic and more a warning shot to competitors: don’t even get close to thinking about copying our first class design. And just to jog your memory: Steve Jobs is quoted for telling biographer Walter Isaacson in his self-titled book, “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.” Could this be Jobs working overtime from the grave? Perhaps.
In any event here is some of the aftermath of the verdict:
- Expect Samsung to appeal the decision. Duh!
- Samsung lost $12 billion dollars in market cap (about 7.5% of its share price and the total value of the Google-Motorola deal), emphasizing the value shareholders place on the mobile industry (and maybe a better estimate of what Samsung really lost). Apple added another 2 percent cushion to its title as “most valuable company in the world ever (not inflation adjusted).”
- Apple may be awarded an injunction that would prevent Samsung from selling its devices in the United States; however, such IP protection isn’t likely available in international markets. The hearing for the injunction is set for September 20, and we should get a ruling within six to eight weeks.
- Apple gets an ego boost, encouraging it to battle with other competitors in the Androidsphere – like Google. The inverse is also true: competitors may be more careful in how they compete with Apple.
- The effects on the consumer are to be decided. On one hand, the verdict sends a strong message to competitors: don’t get too close. While on the other hand, it has the potential to spark a new round of innovation (not as likely). Unfortunately, I believe the intent of IP protection is being obscured by cutthroat competition and ultimately hurts the consumer. It limits our choices and prevents other companies from innovating existing products. While patent protection eventually goes away, it persists for what seems like an eternity in technology years. Maybe patent law should offer a shorter term of protection for technology patents?
Have you been following the Apple v. Samsung case? Let us know what you think the real spoils of war are, and how they are being divided in the comments below.