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>>Apple v. Samsung: What’s Next in Their Patent War?

Apple v. Samsung: What’s Next in Their Patent War?

Prof. Doug Lichtman, UCLA School of Law
October 16, 2012

Patent litigation between Apple and Samsung continues to attract enormous attention, with newspapers, public commentators, industry executives, and investors all struggling to understand not only the cases, but also the bigger picture implications of this much-hyped patent war.

Back in July, I sketched some early thoughts about this patent fight. In September, Jim Gibson wrote a post here, offering an update just after the California jury ruled. Now, with another major round of hearings set for December, I thought it time to come back one more time, update my own analysis, and think ahead to where things will likely go by the end of the year.

1. At a high level, what is Apple’s strategy in this web of litigation?

Apple has dozens of cases playing out in dozens of countries, and Apple has patents across the entire technology space – from patents on the way the operating system works internally, to patents on the graphical user interface, to patents on the way its hardware looks, to patents on specific interaction features like slide-to-unlock. Apple has launched cases on all of those issues against Samsung, and many of those issues against HTC. The intent is obviously to put enormous pressure on Android and ultimately to force the Android ecosystem to offer products that consumers perceive as meaningfully different from the Apple equivalents.

2. But Apple sued for cash damages and specific injunctions, right?

Yes, in court, Apple asked for cash and for specific injunctions, but those are the only things that Apple can ask for in court. Apple cannot ask for something more sweeping, like a general agreement not to copy. My view, however, is that Apple will ultimately trade away whatever it wins in court to instead get (a) some sort of anti-cloning agreement with Samsung, Google, HTC, and the other Android players; and (b) sure, some cash, to the extent Apple has leverage left after achieving its main goal.

3. Might Apple achieve its goals one lawsuit at a time, never in fact needing a global settlement and anti-cloning agreement?

Possibly. Apple is going to be able to force baby-step differentiation one case at a time, for instance in one case stopping Samsung from (say) using slide-to-unlock while in another case forcing Samsung to drop double-tap-to-zoom. That, plus natural product evolution, might be enough. That said, the more likely pattern will be a series of patent wins by Apple, followed by a negotiated business deal that settles all the cases, resolves whatever patent suits Samsung has going the other way, and sets the rules looking forward. A business deal makes sense because the courts can only tweak features in an awkward, slow, narrow way. A business deal can be much more comprehensive, and it is more likely to yield a stable peace that both sides can live with.

4. Investors and commentators have focused most of their attention on the case that just concluded in California. Are not the international cases just as important?

The international cases will be important, but the case that just concluded in California deserved the extra emphasis it received. Some reasons are obvious. For instance, the California case has implications for the entire United States, which is a big market; and the California case addressed both software and hardware claims, and at that for the iPhone and iPad both. Less obviously, the California case was also particularly important because some of Apple’s legal claims (for instance, its arguments about trade dress) allowed Apple to tell a broad story about how Samsung copied pervasively. Most of the international cases will be narrow by comparison, focusing on specific patented technologies but not opening the door to the broader “they copied” storyline.

5. You talk a lot about Apple’s patents. Where are Samsung’s patents in all this?

Samsung obviously came up empty in the California trial, but that does not mean that Samsung has no fuel left in the tank. Samsung has an enormous patent portfolio and surely will at some point win some cases and identify some technologies that Apple has not properly licensed. Still, the reality is that Apple’s position is stronger. Apple has a nearly unparalleled patent position thanks to its patents on operating system fundamentals, user interface strategies, hardware designs, and the like. And Samsung truly did copy many of these features from Apple, and, worse, copied in ways that judges and juries can readily perceive. So, while Samsung has some valuable patents, in this war Apple is the United States to Samsung’s France or Great Britain.

6. What about Google’s patents?

Google similarly has a large treasure trove of patents, including the patents it acquired (pronounced “ridiculously overpaid for”) from Motorola and patents like the ones it purchased from IBM. Yes, many of those patents cover technologies that are essential to various technical standards like the WiFi, 3G, and 4G standards. And, yes, because those patents are essential to technical standards, the courts will for the most part not allow Google to use those patents to significantly tax or disrupt Apple’s business. However, even accounting for that, Google still has plenty of patents that are not standards-essential and hence could be used either to retaliate against Apple or to discourage Apple from pushing the patent war too far.

7. Who are the winners and losers in this patent fight so far?

Apple is obviously a big winner, in that it has put pressure on its Android competitors and presumably strained relationships between Google and its OEMs, between the OEMS and the wireless carriers, and between all of these firms and their end users. Microsoft is another big winner, because Microsoft has been able to capitalize on the fear of patent litigation by licensing its patent portfolio to nearly all the Android OEMs. Microsoft also has used this moment to build its relationships with firms like Samsung and HTC, recognizing that those firms are today more interested in diversifying their businesses away from too heavy a reliance on Android and toward a more diversified, risk-averse approach that includes platforms like, presumably, the new Windows operating system.

Google is the big loser here, not because Apple will directly cause that big of a disruption to Android (it won’t), but because Google’s own failure to stand behind Samsung and HTC during this process likely will cause those firms, and others, to be more reserved when Google in the future seeks out manufacturing partners. Google should have stood in front of its partners and taken the heat from Apple directly, rather than quietly wishing its partners well from the sidelines. (Concerns that Google might play favorites with its now in-house partner, Motorola, similarly will keep other firms from aligning with Google too completely.)

8. So will the California case significantly disrupt Samsung’s business, and in particular is there any risk that Judge Koh will knock the Galaxy S3 off the shelves?

Apple will ultimately win some cash from Samsung, although, barring settlement, the exact amount is sure to be the subject of litigation for the next several years. That said, Samsung is so big that no plausible damages award will matter. Thus, the real question here is whether the court will issue any injunctions that in turn might truly hurt Samsung. My view is that the court will issue injunctions, and those injunctions will be read to apply to the S3, but that the injunctions will nevertheless not matter very much. If the court orders Samsung to turn off pinch-to-zoom, for instance, Samsung will replace that feature with circle-to-zoom or touch-and-hold-to-zoom. If the court orders Samsung to stop using Apple-like icons sitting in a grid of colored squares, Samsung similarly can easily comply by (for instance) dropping the squares and instead using circles, or instead placing its icons directly on a uniform black background.

The only injunctions that would really hurt would be injunctions that apply to hardware features on phones that Samsung has already manufactured. The distinction there is that software features can be changed through software updates, but hardware features can only be fixed in the next production cycle. Lucky for Samsung, however, Apple’s hardware patents do not seem to cover the Galaxy S3’s hardware design. Apple’s design patent that covers the way the iPhone looks from the front when it is turned off, for instance, simply isn’t a plausible problem for the S3. On the iPhone, the screen and the rest of the front blur together into a seemingly unified, glossy, mirror-like reflective surface; on the S3, the screen is a distinct element, always clearly separated from the remainder of the phone’s face.

9. But wait a minute. I thought Apple has patents on single-finger scrolling, and on the idea of having a rectangular telephone. Surely injunctions against those technologies would hurt Samsung in the market place.

The press coverage of the case has been horribly misleading, so let’s set the record straight here. Apple did not even argue in this case that it owns the idea of single-finger scrolling. Apple instead convinced the jury that it owns the idea of distinguishing single-finger scrolling from two-finger touches like pinch-to-zoom. Thus, for all Samsung phones, single-finger scrolling is still perfectly permissible.

Similarly, Apple did not argue that it owns all rectangular devices. Instead, Apple took more nuanced positions about how the iPhone and iPad look, for example (as I noted above) emphasizing how the front of the iPhone seamlessly integrates the screen into the rest of the face. Moreover, one of Apple’s broadest design patents – the patent on the general way the iPad looks – failed in front of the jury, with the jury deciding that Samsung does not infringe this patent even though the accused Galaxy Tablets look remarkably similar to the iPad in terms of their general shape and screen positions.

10. Commentators seem torn as to whether Apple’s win was evidence of a patent system working well, or evidence of a patent system gone awry. What’s your view?

In my view, this case is largely an example of patent law working correctly. Samsung clearly copied. That’s not a surprise to any of us. Just look at the products and you can see all sorts of unnecessary duplications in terms of how the devices look and operate. That the jury saw the copying and reacted to it, then, is a reason to celebrate, not complain. Patent law’s most important job is to make sure that competitors do not copy innovative ideas from their rivals, but instead come up with their own distinct but competitive alternatives. The video game market works exactly this way, with the PlayStation, XBox, and Wii sharing many similarities (they all connect to your television, allow you to pretend that you are a football player, and even allow you to use motion control to interact with the games rather than just using normal remote control handsets), but those platforms are still different enough that consumers can readily distinguish the brands. The cell phone market has not been working this way, and patent law will now rightly play a central role in changing that status quo and bringing about more intense, differentiated competition.

Indeed, if I were advising Apple in all this, my main advice would be to be careful what you wish for. If Apple succeeds in forcing Samsung to come up with a truly original user experience, Samsung might well be up to the task, and Samsung might in the next year or two come up with an experience that consumers prefer. As anyone who has ever typed on an iPhone well knows, there is certainly still a great deal of room left for improvement.

By |2018-07-02T12:54:21+00:00October 16th, 2012|Intellectual Property Issues|Comments Off on Apple v. Samsung: What’s Next in Their Patent War?