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Monday, 27 August 2012 00:00
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Apple verdict refocusses spotlight on patent regime

Though Samsung’s engineers have already found an alternative to Apple’s ‘bounce’—one of the six patents the US court has held Samsung has violated and needs to pay damages of $1.05 billion for—there is little doubt that the entire Android-based smartphone industry needs to be quaking. Indeed, given that Android-phones—which run on Google’s software which is licensed for free—outnumber Apple phones four to one, Apple’s larger battle is with Google. But apart from what the court ruling means for Samsung and Apple’s financials, there are larger and disturbing issues that have, once again, been highlighted. This is best exemplified, of course, by the US federal appeals court judge Richard Posner who, two months ago, dismissed an Apple vs Motorola case saying the US patent system was in chaos.

But only the naïve would believe companies won’t fight bruising patent battles when they’ve invested billions in acquiring the patents, nor is it clear just who is copying whom. While one estimate, in the Wall Street Journal’s law blog, is that the current trial cost upwards of $500 million including $4 million apiece for expert witnesses, this is tiny compared to what the patents cost. Google, for instance, paid $12.5 billion to buy Motorola Mobility’s patents and a group of tech firms including Microsoft, Apple and RIM paid $4.5 billion for Nortel’s patents—Google had bid $900 million for this earlier. Google, for the record, filed a lawsuit against Apple last week on the basis of the patents it bought from Motorola arguing that a number of features on the iPhone, including the iconic Siri assistant, infringe on seven of its patents. A complaint has even been filed with the US International Trade Commission on some other alleged infringements by Apple. According to Foss Patents, there are at least 50 lawsuits between Apple and Samsung in 10 countries. And not all of them are going the same way. The Seoul ruling, a few days ago, upheld the charge that Samsung had copied Apple’s ‘bounce back’, but dismissed nine other such claims. Indeed, the Seoul judge said many of Apple’s patents were invalid as they were based on features that had appeared in previous inventions by Japanese and European firms—many say Samsung’s US case suffered a setback when the judge didn’t allow Samsung to show evidence that Apple was influenced by Sony while developing the iPhone.

How will this affect the development of smartphones? Google’s famous ‘When patents attack Android’ blogpost of 2011 suggested rivals like Microsoft and Apple were seeking $15 per device in licensing fees, evidence during the trial suggested the real figure was $30 per phone and $40 per tablet. While industry will have to figure out whether such costs can be absorbed, by it or by consumers, the larger question over what is being patented remains—the old debate over patenting inventions and inventing patents. During the trial, Samsung’s lawyers kept harping on how Apple couldn’t get a monopoly on rectangles with rounded corners—one of the battles Samsung lost was that it was copying Apple’s screen icons. While the sheer pace of technology in the mobile phone space may still render the patent debate a bit irrelevant, the same does not hold in areas like pharmaceuticals where the challenge is a lot more serious.


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