Apple has won a massive victory in the latest round of its dispute against Samsung. Part of the case is on patents, and part of it is on “trade dress” (the look and feel of the iPhone).
The $1bn award sounds like a lot, but it isn’t really the most interesting part of the decision. The RIM/Blackberry case was much narrower but saw a $600m+ decision some years back. The more important aspects of the verdict are that it found Apple’s patents to be valid and that Samsung knowingly copied Apple. The validity of Apple’s patents will probably allow it to earn a healthy stream of licensing revenue from other smartphone companies into the distant future. It will also give a well-needed jolt to the rest of the industry to explore different technological trajectories and to develop smartphones that do not resemble the iPhone as much. The willful nature of Samsung’s copying is why I believe the jury reached a surprisingly quick decision while others had expected it to be a protracted case, i.e., once they decided in their minds that Samsung willfully copied Apple, it was only a step away to reach the conclusion that Samsung infringed across a broad range of its products (see this chart at TheVerge). Very bad news for Samsung.
Some people view this as part of Steve Job’s vendetta against Google, which created the Android operating system running on Samsung’s phones. While this may or may not be true, it is not the whole story. The Android operating system is quite versatile and it is possible to build quite a diverse and novel ecosystem around it without copying the iPhone. An example of this is Sony with its aesthetically elegant Xperia phone and Android-based Walkman. Another is Nikon which has just released an Android camera and is an iteration away from it becoming an actual phone.
No doubt the Samsung/Apple ruling will be appealed, but it will inevitably shape the future of smartphones.
Core Economics 
Not that I really know much about all this but my first reaction was, that one could not have reasonably expected any other verdict from a jury in San Jose, California, USA.
I understand this to be just the opening salvo of a battle apparently being waged on four continents over a smartphone market valued at $US 219.1 billion according to Bloomberg Industries (and according to a piece in the SMH today; see below).
Specifically, the companies have apparently sued each other in the UK, Australia and South Korea.
I have little doubt that Samsung will emerge victorious in South Korea and they did recently win in Australia according to the SMH article.
So, yes, there will be an appeal and there will be a couple of additional scharmuetzels and then — when the court cases have established enough facticity — there will be some negotiated agreement of one kind or the other.
I believe the really interesting issue here is whether you ought to be able to own “design patents”. Pretty crazy idea to my mind.
Read more: http://www.smh.com.au/technology/technology-news/apple-wins-1-billion-in-patent-case-against-samsung-20120825-24st7.html#ixzz24WjnOI4w
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There seems to be a drastic slippage between the notions underpinning the law and the outcome here.
My understanding is that the perceived ‘greater good’ motivating (or at least the defence justifying) patent law is that it encourages companies and individuals to innovate knowing that their inventions will be protected, and consequently everyone benefits by way of the rate of technical innovation.
In this case, however, the world’s most valuable company is trying to hamstring a few of its main competitors whose presence in the smartphone / e-reader market must surely help, not hinder innovation and consumer prices.
(As a side note on the size of the USD1bn award figure, Apple has been reported to have paid a shade under 10% overall on pre-tax global profits of USD34bn in 2011.)
It’s a shame that Samsung ‘ripped off’ Apple, but the world knew that for a certainty anyway, so all the moral credit of invention already redounds to Apple. A judgement like this detracts from their credit for me.
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