The Apple-Samsung Verdict: What Does Apple ‘Own’ and What Will They Do With It.

If anyone hoped that the Apple-Samsung verdict would bring the end to legal battles and certainty to the future of the smartphone industry they were naive.  If anything they have entered a new and even more complex stage.

Some next steps are certain.  Apple will ask the judge to triple the damages because the jury found intentional infringement and will ask that all offending products be immediately removed from sale in the US.  Samsung will attempt to appeal the verdict to any venue that it can because nobody simply lets a billion dollars walk away without trying to stop it.

The bigger question is what this means to everybody else.  The reason is that the jury validated nearly all of Apple’s intellectual property claims.  And those claims can be applied to all smartphones, not just Samsung’s.

Based on a CNET interview with juror Manuel Ilagan the jury saw their ruling narrowly and mostly focused on visuals.

“I realized that’s a big deal if Samsung can’t sell those phones,” Ilagan said. “But I’m sure Samsung can recover and do their own designs. There are other ways to design a phone. What was happening was that the appearance [of Samsung’s phone] was their downfall. You copied the appearance…. Nokia is still selling phones. BlackBerry is selling phones. Those phones aren’t infringing. There are alternatives out there.”

Unfortunately while Legislative Intent and Judicial Intent are all valid legal topics Jury Intent is irrelevant. What industry observers are waiting to see is whether, fresh from their win against Samsung, Apple makes demands of Nokia, Blackberry, and all the other alternatives.

Apple’s intellectual property claims that were validated in the trial were broad and fall into two categories.

  1. The first are claims regarding the physical appearance of the phone.  The first is of the front appearance of the phone and the second of the rear appearance of the phone.  Samsung and other critics said that Apple was trying to own the idea of a phone that was a rounded rectangle.  The remaining claim in this category was the physical presentation of the screen as a grid of square icons.  Many Android smartphones do not use the grid of square icons, but there are a lot of rounded rectangle shaped phones out there!
  2. The second are claims that cover the interaction with a multi-touch screen.  These include pinch-to-zoom, tap-to-zoom, twist to rotate, and the bounce-back when scrolling to the end of a document.  Apple’s real target in these claims was not actually Samsung but Google, as they are features of the Android operating system.

Presuming that these claims continue to be validated what will it mean to the industry and consumers?  In the high tech world there are generally four things that companies do with patents:

  1. They openly license them for free or nearly free in the hope that by creating industry standards it will create stability and growth in the whole industry.  There are many examples of inventions being ‘sent over the wall’  but almost none of them from Apple.
  2. They charge as much as they think they can get for a license and get a slice of everybody else’s pie.  For example Microsoft asks for and generally gets a fee on every Android phone to cover a set of Microsoft mobile device patents.
  3. They use the patent to keep other companies from producing competing products.  This has been Apple’s stance regarding Samsung, but there is nothing requiring that Apple take the same approach with other manufacturers or even with Samsung going forward.
  4. They trade the patents with other companies for other technology.  So for example Apple and Microsoft have a very broad and ongoing patent-sharing agreement going back to the resolution of the Windows-Mac lawsuits.  So the Microsoft Windows Phone can use all of the multi-touch gestures contained in the Apple patent without worry.

Apple could decide to give the legal team a rest and instead declare that smartphone makers pay a certain fee per phone for the multi-touch gestures and a higher fee if the phones are also rounded rectangles.  They could, but it would not be consistent with Steve Job’s well-publicized declaration that Apple would go ‘thermonuclear war ‘  against Google and Android.  Steve is no longer with us, but in some respects that is worse.  Dead people can’t walk into a legal strategy meeting and say “You know that ‘thermonuclear war’ thing I said? I was just blowing off steam.”

Presuming that Apple decides to continue the same approach with Samsung and extend it to other manufacturers what might we see?

In terms of the design patents:

  • We may see companies adding ‘gingerbread’ to their designs to avoid legal challenges by Apple.  Samsung has already shown the ability to be remarkably agile in this regard.  But if you haven’t guessed ‘gingerbread’ is a term of ridicule and mockery among designers.  So if in the future you find yourself wondering why Europeans and Asians can buy really sleek and stylish Android phones that you can’t seem to here, there is the answer.
  • LG Prada KE850 courtesy of Wikimedia

    LG Prada KE850 courtesy of Wikimedia

    There may be one company immune to Apple’s demands to change their designs. That company is LG.  Their inoculation is the LG Prada KE850, pictured at right.  The key thing about the LG Prada, as you might have already guessed, is that it came out several months ahead of the iPhone announcement.  In fact when the iPhone was announced some people snickered that Apple had copied LG, but the iPhone was already well under development in the top-secret section of Apple’s headquarters at the time. So they were parallel developments.  But it can certainly serve as rock-solid evidence by LG of prior art.  Could a company decide to partner with LG in order to sell sleekly designed phones into the US market in defiance of Apple?  It seems feasible.

  • If a company’s foreign models are perceived as sleek and cool and their US domestic models as clunky, an internet based gray market of unlocked foreign phones may arise.
  • There may be a new-found interest in alternative forms of phones and displays, like Google’s Project Glass or wearable computers.  But once you are trying to get the largest possible screen into the smallest possible package, what really is there besides a rectangle?  Expect a lot of thought to be going into that question in various design labs.

In terms of the touchscreen interaction patents.

  • Expect a lot of interest in various design and usability labs for coming up with a set of gestures that are both different from the gestures in iOS and just as intuitive.  That will be a tall order.  The obvious way of interacting with a device is certainly the one you first thought of!
  • Google has been working hard to acquire patents through buying companies such as Motorola Mobility.  In truth so have the other big tech companies (such as the recent sale of 6000 Nortel patents).  Expect Google to try to play hardball with some of Google’s patents that Apple might want to use in the hopes of arranging a hostage exchange for the multi-touch patents.

So while much has changed from the Apple-Samsung jury verdict, nothing has been settled.

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