The more important aspects of the verdict are that it found Apple’s patents to be valid and that Samsung wilfully and knowingly copied Apple.
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.
Last year David Weston and I wrote a teaching case on how in 2000, NTP sued Research in Motion (makers of the popular BlackBerry device) for infringing its patents that cover the wireless delivery of email (free download from WIPO). Well, NTP is at it again, and has just sued a number of firms including Apple, Google, LG, Motorola, HTC and Microsoft that make smartphones. The Washington Post has a brief description of the patents. The earlier case ended with a $600+ million settlement, but that large amount was partly the result of (a) RIM was found to have willfully infringed NTP’s patents and attempted to deceive the court when presenting evidence of “prior art” in 2002, and (b) as the case escalated, RIM faced the very real threat of having its US operations closed down in 2005. A number of the original patent claims were subsequently revoked, but I imagine that NTP is hoping that the larger base of email users these days will give it enough licensing revenue from each of the mobile operators. If you haven’t heard of NTP, that is because the company is sometimes thought of as a patent troll and is not well-loved. In my opinion, the lawsuit also highlights a more subtle problem with the patent system. When successful firms like RIM and Nokia choose to settle with companies like NTP, it gives NTP an incentive and the financial resources to then attack a broader group of other firms. A precedence is also set. It would be better if such firms fought back, e.g., by establishing prior art that invalidates such patents or by pushing back on the claims.