14
Nov
apple-rotten1

I can't say I'm the biggest student of Gandhi, but that whole "an eye for an eye and the whole world goes blind" bit sure came to mind this morning when I read that Samsung's head of mobile, Shin Jong-kyun, said the company "[does not] intend to (negotiate) at all" with Apple. This came on news of HTC's settlement with Apple on Saturday, which I contend is objectively good for the industry and consumers, no matter how you spin it.

First, let's look at the backstory. Apple and Samsung are involved in probably over a dozen various legal entanglements across the world. None of those suits have settled, and only one has gone on to be a definitive victory for Apple. Of course, it's also the one that took place in the country that, economically speaking, matters most: the United States. The US is still the single most lucrative smartphone market on earth, and has become the key legal battleground for the mobile patent wars.

In August, Apple landed a monster $1 billion verdict against Samsung (though that number is subject to some change, most likely). More important, in my opinion, was the fact that Samsung tallied up a whopping $0 in damages against Apple for its own patent infringement counterclaims.

While even more Samsung patents are going to be in play as part of Apple v. Samsung: Round 2 (scheduled for trial... in 2014), the result of this first verdict was a double win for Apple. Even if Apple's damages are reduced, even if the trial has aspects that end up needing to be re-argued to a new jury, Apple's still ahead. Not only did they "prove" (I use that in the legal, not the practical, sense) that Samsung copied their iPhone design and software patents, they showed that Samsung's "two can play at this game" strategy was an utter failure. Bring that down to the quality of advocacy, the jury, the venue, or whatever you like - that's what happened.

Before the trial, Apple offered Samsung a license for its infringed patents - at a cost of $30 per phone, and $40 per tablet (or $24 and $32, respectively, if Samsung cross-licensed back). Which is absolutely absurd. Apple likely knew Samsung wouldn't take it (in terms of cost of production, this is probably a 10-15% royalty). Apple would have likely included "anti-cloning" provisions in this license for its design patents, similar to agreements it currently has with Microsoft on these same patents.

However, Apple reached a mutually amicable agreement with HTC that resulted in an estimated $6-8 per handset royalty, if not less. And since Apple's original licensing offer, Samsung's hardware and software design and features have changed significantly. The Galaxy S line is no longer the sort-of-iPhone-looking device it once was. TouchWiz doesn't feel like it's trying to imitate iOS so much anymore. The realities of a licensing deal have changed, and Apple and Samsung both know this. Apple knows that its legal efforts have effectively pushed Samsung away from its designs and UX. Even Samsung's new tablets look very little like iPads - even as the difficulty of designing around the iPad's registered design has basically become a tacky pop culture reference.

Things are different now than they were in 2010. Much different. Samsung is a much bigger player in the smartphone market, and its products have grown further and further apart from Apple's. That's why I have such a hard time believing that Samsung, a multi-hundred-billion dollar electronics giant, doesn't intend to negotiate "at all" with Apple. That's ridiculous - of course they do. Samsung and Apple are billion-dollar business partners. Letting this global disagreement sour their entire business relationship would be monumentally stupid. You don't cut off your nose to spite your face.

Mr. Shin could mean what he said, but I am highly skeptical. I'm not saying that he was being disingenuous, so much as he was putting on his poker face for the Korean media. But If he did mean it, and Samsung truly doesn't intend to negotiate with Apple, then I cannot clearly see the difference between Samsung's resolute assertion of its complete innocence, and Apple's arrogance in the absolute validity of all its claims. If there can be no compromise, then the only real winners in all this are the lawyers.

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.

  • cooldoods

    Samsung probably likes the publicity that Apple's lawsuits have generated for Samsung products. Anyway, I think the verdict that went Apple's way will be scrutinized by Judge Koh and/or the appeals court. Samsung probably feels they have a good chance that the verdict will be reversed.

    • DCMAKER

      judge koh wont change shit...she is a tard...posner though would throw that shit out in a heart beat

  • Robert Jakiel

    I agree with Samsung on this one and would never give in to Apple. Apple is in the wrong as has been proven time and time again after appeals and the invalidation of Apple patents upon review of the USPTO. Microsoft was using this same strategy to bully a bunch of Android manufacturers but Barnes and Noble stepped up to the plate and challenged Microsoft and in doing so MS caved HARD and became a B&N partner and invested $300 Million in the Nook. Why? Simple. If B&N had gone through and taken MS to court it would have proven that MS didn't have a leg to stand on. This would have set the precedent for the other companies MS bilked money out of to file suit. So instead MS paid B&N off with the "investment" and B&N in turn dropped the suit.

  • coversnails

    It's sad really, 10 - 20 years ago Apple were seen as almost the nice guy fighting against the giant Microsoft PC monopoly. Macs were cool and a bit nerdy (though not as nerdy as people running Linux then). Then iPods and iTunes made them rich and important again and they've slowly become this seemingly power hungry company.

    • http://profiles.google.com/olavamjelde Olav Alexander Mjelde

      Actually it was MS that saved Apple.
      http://www.youtube.com/watch?v=WxOp5mBY9IY

      It's known as "the microsoft deal".
      Also, I dont know why Bill Gates have not gotten a better rep.
      He has donated SO MUCH to charity and to cancer research.
      How much did the CEOs at Apple donate?

      I know it's not a competition, but I think that Bill Gates should have gotten a better rep and he should have been cheered more. If you like Windows or not, you have to at least have a great deal of respect for a man that leaves the CEO position and does charity and other stuff :) I for one at least have to give him creds.

      • AndroidUser00110001

        MS did that to get the government off their back. It was not done just to be nice.

        Bill Gates does deserve better respect though.

      • krazyfrog

        Not everyone who donates to charity publicly advertises it.

  • Sean Lumly

    So you suggest the best way to deal with a bully is to concede and give them what they want? What type of a precedent is being established in doing that? I believe Samsung is right to stand up to Apple and to take measures against this type of corrupt behavior. In this instance, Samsung is fighting on behalf of the larger industry.

    Apple's design patents are ridiculous. Take a look at a 2006 Samsung picture frame below (http://goo.gl/Bk3h9), note the date, and then please let me know which device looks like what. This is clearly prior art, yet Samsung's products have been restricted from market for taking design cues from their own already-in-market design!

    This is one example of many patents, but a very visible indicator that the patent system is providing anything but fair justice. IMO, paying Apple for abusing the system is a step in the wrong direction...

    • Asphyx

      Capitulating to what is in essence blackmail just invites more blackmail in the future.
      Samsung should just change the aspects that were determined to be violated and when Apple runs out of lawsuits to file Samsung then just plays thier game back at them for patents and components Apple needs to make thier phones.

  • http://profiles.google.com/olavamjelde Olav Alexander Mjelde

    Samsung has just increased the chip prices of 20% to Apple and APple cant fint a new producer for chips until 2014. I guess it's sort of karma?

    • Majipoor

      Which has been denied by Samsung.

  • Ray Pholl

    The thing is, the US court case has a very strong chance of being overturned and it was the only court that said Samsung copied Apple ( and was that a surprise....). It is also a fact that other than Apple fans, no one else actually believed it. Samsungs huge sales increases prove that, so how has Apple won anything?

    Samsung have no reason to settle with Apple. Yes there are outstanding court cases, but Samsung have Apple on the iphone 5's infringement on their patents so why would they even want to come to an agreement with Apple? What is more likely to happen is that Apple will approach Samsung, especially so if the Appeals Court does the right thing and throws out the August verdict and orders a retrial. Apple certainly dont want that because all the information that has come out after that verdict shows that Apple's claims just dont stand up to scrutiny. And remember, one of the main issues of infringement, i.e. the " bounce back " patent, has been classified as invalid. And you know, that's the thing about patent law, invalid patents = no infringement, no case to answer and no damages. It also equals a complete loss of face to Apple.

  • skynet11

    For those of you who say "never give in to a bully" that's why they're called "negotiations" - Apple would have to make some concessions themselves, especially if any part of that despicable jury verdict and Vel Hogan's "aha moment" get overturned on appeal. Apple wouldn't get away with its patent bullying any longer, and would have no choice but to make compromises. Samsung recently fired a shot across the bow with raising the price for its A6 processors, and you can bet that got Apple's attention.

  • HellG

    You know that will make Apple even more of a Patent Troll than it already is dont you? giving them what they want will only make it worse

  • onpoint G

    I came here for that awesome Apple picture

    • DCMAKER

      i like the one with teeth and tongue better

  • Freak4Dell

    Meh, this is all dependent on how much Samsung truly relies on Apple. We all know Apple relies on Samsung for displays and stuff, but we don't know the extent to which Samsung relies on Apple. Sure, they get money from selling to Apple, but I find it hard to believe that it's some gigantic sum that can't be compensated for by all of the other things that Samsung has their toes in. If that's true, then Samsung could very well cut off the nose to spite the face (though it would be more like cutting off an eyebrow or something). Sometimes, making your competition suffer is worth the temporary losses you take, especially when that competition started the fight in the first place.

    If I were in Samsung's shoes, I'd have accountants go over everything, and provided that the company wouldn't go bankrupt without Apple's business, I'd refuse to negotiate with them, too.

  • yarrellray

    Sorry I would notsettle squat . What happened in 2009/2010 who cares. This is less than 45 days from 2013 Samsung is KING OF SMARTPHONES PERIOD. Apple is a has been. Apple won the battle earlier Samsung is winning the war.

  • logicrulez

    If I were Samsung, I would not give into them either. They started this who legal war, and now that they see they won't win all the time they are trying to cut deals. Samsung has the money and power to fight Apple. Apple knows the icraps are not selling like they used to, and Android is pretty much unstoppable right now.

  • AndroidUser00110001

    Samsung should mock the Apple commercials. Hi...I am iOS (they all look the same...plain and boring) I am Android (all different.colors and options) just to throw gas on the fire...

  • http://codytoombs.wordpress.com/ Cody Toombs

    "You don't cut off your nose to spite your face."

    As soon as I read that line, I thought of how Apple has dashed almost every connection to Google in the name of striking back over Android. Killing off Google Maps, dropping Youtube as a default app, etc...