25
Jan
android-vs-apple
Last Updated: January 27th, 2012

A recent Newsweek article has been making the rounds claiming, through an unnamed Apple "insider," that Apple has spent north of $100 million litigating its various grievances against HTC since late 2010. Verifying the accuracy of this number is pretty much impossible. But that doesn't really matter. It may just as well be $80 million, $150 million, or $300 million - the conclusion drawn would remain the same: Apple is spending quite a chunk of income on its growing lawsuit habit.

Apple currently has open suits against Motorola Mobility, Samsung Electronics, and HTC in the ITC (International Trade Commission), a number of US District Courts, and various other buildings in which judges are known to sit in ornate leather chairs for long periods of time around the world. In doing so, Apple has made clear that its intention isn't just to hurt Android, but to slap it with so many injunctions and judgments that it'll be more radioactive than Bikini Atoll. But Apple's thermonuclear IP arsenal has proven, so far, to be about as effective as North Korea's real one.

Dr_Evil

Head of Apple Office of Legal Counsel.

Most recently, Apple won a single preliminary ruling against HTC from the ITC on a relatively small feature in HTC's phones that brought up an action prompt when a user tapped a phone number displayed in plain text. HTC quickly announced it had developed a workaround. Apple also lost on a number of other patent claims in that suit, but it is planning on appealing the decision. Of course, appeals are like cars on Oprah - everybody gets one, as long as you're willing to pay the associated fees, taxes, and surcharges.

As a result, there seems to be a growing consensus that, since Apple has had a number of cases with claims dismissed or resulting in unfavorable rulings, the now-deceased Steve Jobs' iCrusade is winding down. After all, it was Jobs who came awfully close to breaking the the Soviet Union's record for inciting the most uses of the phrase "thermonuclear war" in major US media outlets over the course of a single week. Someone should really get in touch with Guinness about that one.

But don't count on Tim Cook to make zombie-Steve Jobs eat his own words before the sweet, delicious brains of the living. There's clearly an existing strategy in place, and Cook is unlikely to upset the Apple cart (OK, I apologize for that one) Steve so carefully arranged before his demise. While in the long term an endless litigation cycle isn't tenable (fiscally or practically), there is little reason to think that Apple has any intention of withdrawing from its onslaught of filings for anything short of Android's head on a stick.

In the world of big tech, litigation has wormed its way into the standard operating costs of most major companies. Lawyers don't come cheap, either - big firms such as those representing the likes of Google, Apple, and Oracle may charge up to $1000 per hour for each low-level associate working a particular case, and much more for the time of highly paid partners leading up to trial. So, suddenly, that $100 million number may not seem all that unreasonable. Analysts and investors tend to view these "IP wars" from a balance sheet standpoint - legal costs today are royalties agreements tomorrow. I'm not so sure that's what's going on here, though.

mission10

This is not an iPad-like tablet. In 1968. Nope.

Based on Jobs' statements in his biography, he took Android's similarities to iOS very personally (I wouldn't have been surprised to hear a story about a flaming bag of dog feces on Eric Schmidt's porch). It seems a given that the lawsuits would have continued rolling out in a highly efficient Apple-Chinese-assembly-line manner, but for one small contingency: Jobs' untimely (and deeply saddening) death. Now that things have settled down in Cupertino, some of the Apple-faithful are willing to admit that, maybe, their messiah pursued his foes with a little too much zeal. With Tim Cook at the reins, there seems to be a taboo desire in parts of the more Apple-friendly media that the company let these legal entanglements pass into the 8-point font footnotes of its high-tech history, and just move on.

This may be easier said than done. At this point, Apple is in a bit of a pickle - withdrawing from current litigation, even in exchange for dropping of countersuits by rival manufacturers, would mean a lot of wasted money and, frankly, make Apple look a bit wimpy. Settling on royalties agreements right now would be exceptionally difficult, as well.

As I said, Apple has lost a number of claims against HTC, Samsung, and Motorola, but won none of any real, lasting significance. While it has obtained injunctions against Samsung and HTC, both companies quickly modified their products to circumvent the infringement claims Apple received those court orders for, resulting in either minimal or non-disruptions of supply. It goes without saying, but it's pretty hard to leverage your losses or half-victories in settlement negotiations. I've read a few pieces suggesting that Apple has the negotiating advantage presently, and I just think that's patently untrue. If anything, Android manufacturers are showing that they're willing to run circumvention circles around injunctions, file effective countersuits, and fight their legal battles all the way to a verdict. I wouldn't say anyone has a real upper hand here, but the media has a tendency to assume that because Apple started this legal war, they must have the better case. In reality, that's a bit like saying the side that shot first at Lexington had the advantage in the Revolutionary War.

So, what's next? While predicting the outcome of complex IP litigation is like looking into a crystal ball while blindfolded, even for the experts, there's little reason to think that Apple, or its competitors, will be slowing their legal attacks any time soon. In fact, Apple is under almost as much of a bombardment from Motorola and Samsung as they've dished out themselves. That means Apple will probably be obligated to come up with even more claims against those companies to use as leverage and intimidation, a pretty standard legal strategy (particularly in cases involving patent infringement).

In short, don't think that just because El Jobso has passed to the great beyond that his vendetta against Android died with him. This battle could rage on for years (as patent litigation often does), and I wouldn't expect it to end until someone (Apple or a major Android manufacturer) suffers a judgment with serious implications. That's when settlements tend to happen, and there has been no indication such a decision will come particularly soon. Will the media get bored of covering this legal slapfighting eventually? Of course. But remember this, the average patent lawsuit takes about 2 years (3 with an appeal) to fully litigate. That means Motorola's newest lawsuit against Apple, if it went to trial, wouldn't be resolved until 2014 at the earliest. So, put on your waders, kids - we're going to be knee deep in this stuff for a while longer.

David Ruddock
David's phone is whatever is currently sitting on his desk. He is an avid writer, and enjoys playing devil's advocate in editorials, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • Souvik Kar

    I don't think that Apple worries about these 100 million dollar lawsuits(if true). At the very least it creates a huge nuisance value for the competition. With the record profits that it has been having it can afford these, but HTC may not be able to spend a similar amount in defense. Often the primary goal of lawsuits like this is to make the cost of doing business go up. The shareholders will have no reason to pressurize Tim Cook to stop with these lawsuits as long as they have stellar quarters. When they hit below expectations for a couple of quarters, then there may be some questions.

  • ?

    Paragraph 5 first sentence to instead of tno I think?

    • David Ruddock

      Thanks, that one slipped through the cracks of editing.

  • ?

    That"s ok I had to look at it several times before I actually believed what I was seeing. And I happen to agree with the article I don't think anybody is really winning this war right now.

    • Tee

      Wasn't it S. Jobs himself who threatened to use the entire cash flow of Apple to fight Google because of Android? $ 100 million is just the beginning.

  • sriracha

    apple reminds me of a childhood friend i had some thirty years ago; he had all the cool toys. he had all the Tonka trucks, all the He-Man figures and Castle Greyskull, eventually the G.I. Joes and all the trucks, planes, and helicopters. Optimus Prime and even Omega Supreme (remember him?). all the Star Wars ships and figures, battle scenes with Jaba and Princess Leia. he'd bring them to school to show off, but never let any of us play with them. he just wanted the envy and attention, the crowd of kids wishing they were as kool as he.

    eventually we made it to middle school. gym class, algebra, and health class became the norm. playing with HE-Man and Princess Leia were not kool any more, holding hands with your girlfriend or dreaming of your first car was. you know what happened to Kaptain Kool then? we all kicked his ass in dodge ball. i'll patiently wait to see how this bodes for Apple.

    "Come on, Kate. It's time to put your mouth where our balls are." -Peter La Fleur

    • David Juliano

      I'll tell you how it plays out...Apple gets their asses kicked with an android ball to the face and we will all laugh at apple and apple sheeple and say "told you so losers".

    • https://profiles.google.com/AbhisshekDas Abhisshek

      +sriracha i wish i could +1 your comment.
      Android Police why don't you changed this
      shitty commenting system. even Facebook commenting system is better then this one .

      • http://www.androidpolice.com David Ruddock

        Trust us, we know. Technical issues have prevented implementation of an alternative system. Eventually.

  • Spydie

    And the nice part is, during the ensuing battles, the phones and tablets will change dramatically if for no other reason than to negate any of the claims the other makes against them, so by the time a judgement is rendered, that company can say, "but look, we've already changed that, so it's now a moot point." And it will be. In the end, a lot of money will spent and no one will win anything tangible. It will be a draw.

  • gt4x

    the only winner is the lawyer and their money bags for sure :P

  • Topgun

    I still think that none of the Android makers have brought out the big guns yet. Moto and Sammy have some very big patents that haven't been to court. I think they are holding back to see what Apple plans next. I bet if Apple tries to drop the big one, (little boy), Android will come back with fat man. Both sides will have some serious damage but Apple will end up having to either pay some heavy royalties to Moto and the likes, or face losing their cash cows. People seem to forget that Moto holds the basic patents to make cell phones work. With Google owning those, and with Google's cash behind them, Apple might be in some serious trouble. Me personally, I wish they would stop this crap and create some great products. The better they do, the better for everyone. That is how real innovation works. I just think they are out of ideas now.

  • QuickSurfer

    Nevermind Apple vs Android, I think we can all agree that the real winner in this patent war is Microsoft. Fairly sure that just about every major android licensee has settled with them to the tune of ~$10 per phone sold. I've always been unclear about what the actual dispute is as far as Microsoft is concerned and would love if someone could enlighten me.

    • Topgun

      Well MSFT played this one perfectly. They could write a law class or business class on how to make money with this. Apple going "thermonuclear" on Android is causing a lot money out of their accounts but not much of a return. MSFT quietly went to the Android makers and said, listen we know you know you are using some of our patents...lets make a deal. Its weird in all of this, MSFT was the smartest and arguably the nicest out of anyone. They just want to pad their pockets, stay relevant, and get along with everyone. We live in a weird world now. You got Mr. Gates trying to use his wealth to save the world, and Jobs taking his billions to the grave.

      • QuickSurfer

        Essentially the end game is to erode the profit margins of android manufacturers, right?

        EDIT: does the private settlement carry an implication of guilt as far as the "victim" is concerned? I am not versed on US patent law.

        • http://www.twitter.com/coreduo08 CoreDuo

          A settlement does exactly the opposite. There is no implication of guilt in a settlement. The AMD vs. Intel battle I think is a relevant example. They ended all current legal disputes for a cash amount agreed upon by both companies. Intel never admitted to secret rebates as leverage for companies like Dell to be Intel-exclusive, and AMD renegotiated their cross-licensing agreement to negate breach of contract allegations with past licensing agreements.

      • Randy

        Bill Gates is more of a business person than a computer person. Always has been, always will be. Yes, he made it big off of an operating system. Yes, he built his empire around that operating system, and is now into some other computer software and other things. But it was an operating system that someone else wrote. He bought that operating system, rewrote pieces of it to make it feasible, and marketed it. He became rich off of someone else's work 30 years ago, he's doing it again now. I'm not expressing an opinion that he should or should not be doing it, just stating the facts.

  • http://codytoombs.wordpress.com Cody

    It's funny to see history re-written so easily. If you look back not that many years ago, Tim Cook was actually the litigious one and Steve wasn't. It was Tim Cook that publicly stated he wanted to sue competitors into oblivion and that it was better to operate in an industry without competitors. Sure, Steve took up that mantle and he deserves ridicule for that standpoint as well, but he didn't originate it within that company. Now that Steve has passed and people are looking at that standpoint in a negative light, it's easy to pretend Cook was just going along with it at the time. Things from Apple aren't going to change.

  • Jon

    I'm reminded of the song lyrics: you need to know when to hold 'em and you need to know when to fold 'em; there's time enough to count 'em when the dealings done. Since Apple hasn't been doing that great in court, they should cut their loss and walk away.

    • Randy

      That probably would be the best thing to do. But as the article said, that would make them look weak, and I think it would hurt their pride more than anything.

  • Kinchas

    The real point of the outcome of these lawsuits, is to settle the dust on what can or cannot be patented. The momentum so far seems to be in the favor of limiting what can be patented as far as mobile technology is concerned. Eventually, even Apple, will have to accept what the courts decid

  • http://www.superiorsmartphone.com superiorsmartphone.com

    So should apple start using android in their iphones? :)

  • http://www.twitter.com/coreduo08 CoreDuo

    Nevermind the content matter of the article, the analogies had me cracking up.

    Good work :P

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