TECHNOLOGY SPECTATOR: Apple's patent knockdown

Apple has scored a crushing win over Samsung in the landmark patent war, but what does this mean for the future of the mobile device market?

Technology Spectator

Apple has made the most of its home court advantage over Samsung in the landmark patent case, winning a crushing victory over its South Korean rival. The emphatic nature of the win is highlighted by the fact that the jury found in favour of Apple on almost every single count, effectively reducing Samsung to a petty plagiarist and a wilful pilferer of Apple’s hard work.
In contrast, none of Samsung’s allegations of Apple infringing three patents in the design of its iPhone, iPad and iPod touch were summarily rejected. Unfortunately for Samsung, it didn’t quite fare so well in its home turf either with a court in Seoul ruling that both Apple and Samsung infringed on each other's patents on mobile devices. The Seoul Central District Court ruled that Apple breached two of Samsung's technology patents, and ordered it to pay 40 million won ($33,946) in damages, while Samsung was ordered to pay 25 million won ($21,195) for violating one of Apple's patents. It’s a lot better than the outcome in the US but just not the clear cut victory that Samsung would have dearly wanted.

The South Korean giant has unsurprisingly promised to fight the verdict and the true magnitude of the damage incurred will only become clear if the presiding judge decides to adjust the verdict and grant Apple’s request for a preliminary injunction barring Samsung from selling its infringing products in the United States.

That injunction will hurt a lot more than the billions Samsung is in line to pay as penalty, especially as the holiday shopping season edges closer. With the new iPhone and the iPad mini expected to be in the market before December the stars are aligned for Apple to maintain its dominance in the market.

Apart from reinforcing Apple’s position in the market in the short-term, the verdict could have a significant bearing on the consumer tech market and the current "intellectual property” regime, which some say is out of control.

First things first, the verdict doesn’t spell the doom for Samsung or Google for that matter. Samsung’s rampant sales and the fact that it’s the flagship for Google’s Android meant that it was always going to be subjected to a fierce attack. While the an injunction on US sales will halt Samsung (and Android’s) momentum, Samsung does have the fiscal and technical muscle to fast track the release into the market of devices that don’t infringe on Apple’s patents.

This will require close contact with Google and given the destabilising impact of the verdict on the entire Android ecosystem, one would think that it will choose to align itself more closely with the third-party manufacturers to break Apple’s stranglehold.

Meanwhile, the verdict has sparked fresh optimism at Microsoft. The idea is that device manufacturers – scared by the prospect of an increasingly litigious Apple – may ditch Android in favour of Windows. It’s a fair assumption given that Microsoft’s decision to cross-license Apple’s technology provides them a modicum of protection. Samsung already has its Focus range that runs on Windows and it’s reasonable to assume that the Korean giant may pay greater attention to developing the Windows Phone relationship. In fact, there is already talk that Samsung is about to announce a new Windows 8 hybrid device.

With Nokia set to to announce the first Windows Phone 8 smartphone in September, Microsoft can at least extoll the virtues of being a true innovator and a legitimate second option. That is until Apple finds a way to cut it back down to size. Let’s just bear in mind that Windows Phones are nowhere near close to challenging the Apple status quo, while the Samsung-Android combo was making life difficult for Tim Cook. So, while there should be some short-term gain here for Microsoft it still faces an uphill battle with regards to turning it into long-term success. Meanwhile, Google won’t sit around idly.

What will be interesting to see is whether these permutations and combinations actually ends up hurting Apple in the long run. According to UBS analysts, Apple’s patent stranglehold will inevitably spur its rivals to innovate and potentially create a new category of devices that leaves the tech giant flat-footed.

It’s an interesting scenario, after years of following Apple’s lead perhaps this is exactly the tonic needed by Google and its roster of device manufacturers to think outside the box. However, consumers are unlikely to see anything tangible come out of this anytime soon, simply because the legal imbroglio is far from over. There are dozens of Apple versus Samsung cases running around the world, including Australia, and while Apple is in the box seat, it shouldn’t expect a repeat of the US verdict in every jurisdiction.

Amidst all the talk of "thermonuclear” outcomes and billions of dollars changing hands, some have pointed out that the case is another example of a patent system spinning out of control.

As Forbes contributor Haydn Shaughnessy points out ‘design is not invention’ and Apple deserves no kudos for leveraging its design credentials to take out a strong competitor.

It’s a valid argument that perhaps warrants more consideration but in respect to this particular case Samsung left behind a substantial paper trail which showed a pattern of actively copying Apple’s ideas.

The legitimacy of this practice may be subject to debate but for consumers they might need to get used to the ideas of smartphones and tablets not looking like the iPhone or the iPad.

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