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Apple v. Samsung, Unspun: Patent Warfare Is a Slow, Costly Habit with Few Winners

Rob Pegoraro
Tech Columnist
Yahoo Tech
May 6, 2014

Apple v. Samsung, Unspun: Patent Warfare Is a Slow, Costly Habit with Few Winners

Rob Pegoraro
Tech Columnist
Yahoo Tech
May 6, 2014
Apple v. Samsung, Unspun: Patent Warfare Is a Slow, Costly Habit with Few Winners

NEW YORK — There’s one clear winner in the latest in a long round of patent-infringement lawsuits between Apple and Samsung: the children of the lawyers working for each client, who can now rest assured that Mom or Dad billed enough hours to cover tuition at any top-tier college in America.

In the long-running case, a jury in San Jose, California, came out with what’s little better than a nothing-nothing tie. For infringing three of the five patents Apple had asserted, the jury awarded Apple $119.6 million — or a bit more than 5 percent of the $2.2 billion it had sought — while directing Apple to fork over $158,400 to Samsung for infringing one of the Korean conglomerate’s patents.

(For your reference and/or insomnia treatment: Apple claimed infringement of patent 5,946,647, describing how its software can automatically recognize designated data types such as dates; 6,847,959, about device-wide search; 7,761,414, background sync; 8,046,721, the slide-to-unlock gesture; and 8,074,172, automated word suggestions. Samsung, in turn, cited 6,226,449, describing camera operation; and 5,579,239, about video transmission. See also the jury’s 12-page verdict form.)

It’s tempting to speculate that the blood-feud nature of this fight will lead Apple to send over its payment in bags of pennies. But first both sides will almost certainly appeal. 

This won’t be a quick process. Remember the August 2012 Apple-Samsung patent verdict — initially north of $1 billion, then reduced to $929 million after a retrial involving a second jury? That case is still under appeal

So what will happen to the top Apple and Samsung phones on sale today, as a result of this trial? Nothing. If any of you were hoping that Android or Samsung would be crushed righteously with a blow from Judge Koh’s gavel: Sorry. Not going to happen. 

Even if Friday’s verdict were beyond appeal, neither company’s suit names current flagship models like Apple’s iPhone 5s and 5c or Samsung’s Galaxy S5. How could they, when this case started in February of 2012? 

At this rate, the iPhone 6 and the Galaxy S6 may be in trouble sometime in 2017.

A deliberate pace of law should not invalidate a law, but in this case the law had one job: to “promote the Progress of Science and useful Arts,” as the Constitution spells out. 

But when you combine the profusion of software patents in the average smartphone — the low estimate I’ve seen is 100,000, the high end 250,000 — with the slow progress of patent litigation and the slower time it takes to get a patent invalidated, trench tort warfare over last year’s models like “AppSung” is an inevitable result. 

And yet we keep handing out more patents. A just-updated study by researchers at the University of Richmond found that once you factor in revised applications that ultimately get accepted, 92 percent of applications last year became patents

Considering that an approval from the Patent and Trademark Office grants you a government-created monopoly over an implementation of a concept — running 20 years from the date of filing — you can’t blame a company for working the refs.

Better yet, you can turn that patent into actual money even if you never use it: Sell it to a “patent assertion entity” that can send off nastygrams to enough companies — remember that you don’t have to know a patent exists to be found to infringe it — and you can have a nice little side stream of income.

So instead of promoting the progress of science, the patent system now promotes the progress of patents. In 2011, for instance, Apple spent more to buy a share of a patent portfolio — $2.6 billion — than the $2.4 billion it invested in its own research and development. 

There’s been a lot of attention paid to the problem of so-called “patent trolling” I just outlined above. AppSung and cases like it — for instance, Microsoft’s successful campaign to get Android manufacturers to pay licensing fees, or a suit by Yahoo against Facebook that ended in a no-cash settlement in 2012 — don’t involve conventional trolling. They involve companies that ship actual software, services, or hardware. 

And in Friday’s case and the 2012 ruling, there are real questions about how much copying Samsung has done. (Any such mimicry, at best, is taking a lot longer to make the tablet market look like the smartphone business.)

If patent lawsuits involved only cases like this, it would represent an upgrade over a situation where a random patent troll can send “demand letters” to small businesses insisting they pay a license for, no kidding, using a scanner. And yet … is this really how we want to tie up the courts? 

“These are fights that should take place in the marketplace, where consumers benefit financially and where the phone makers are incentivized to improve their product, investing in R&D instead of patent lawyers,” wrote Julie Samuels, executive director of the tech-policy group Engine Advocacy (and before then, occupant of the “Mark Cuban Chair to Eliminate Stupid Patents” at the Electronic Frontier Foundation). 

But that focus on innovation isn’t gone. Try going to startup pitch events like TechCrunch Disrupt here in New York, where I spent Monday watching a parade of companies demoing apps, gadgets, and services. Number that I heard bragging about the strong patent portfolio they could bring to the table? Only one. At least some companies are still focused on the product.

Email Rob at rob@robpegoraro.com; follow him on Twitter at @robpegoraro.