Apple’s Big Win

August 26, 2012

Apple wins jury verdictPatent lawsuits rarely attract much attention.  The case involving Apple and Samsung in federal court in the Northern District of California is a significant exception.  When the jury in that case awarded Apple more than $1 billion in damages late last week, the news spread rapidly around the world.

At issue in the case were allegations of patent infringement involving a variety of technologies incorporated into the mobile phone and tablet computing devices manufactured by both companies.  Technologies associated with touch screen interaction, on-screen icons, and screen design were at the heart of the dispute.

Apple argued that Samsung had willfully and systematically infringed on seven of its patents for technologies used in the Apple iPhone and iPad products.  The company argued that Samsung had engaged in deliberate copying, and it litigated the case with a zeal reflecting the outrage reportedly expressed by Apple’s late-founder, Steve Jobs, who was apparently particularly incensed by the appearance of the Samsung products.

Samsung contended that Apple’s claims were absurdly broad and represented arrogant overreaching.  It took the position that Apple’s assertion of ownership over geometric shapes, such as rectangles, and design features including rounded product corners was outrageous and, if enforced, would dramatically harm competition, to the detriment of consumers.

In the end, the jury overwhelmingly sided with Apple.  It determined that Samsung had infringed on six of the seven Apple patents, while Apple had not infringed on any of Samsung’s patents.  The jury also concluded that Samsung had engaged in willful infringement, thus enabling Apple to pursue triple damages.

In the wake of the ruling, Apple reportedly plans to seek an injunction blocking distribution of the infringing products.  Although this is not the final word on the full range of patent disputes involving iPad and iPhone technologies, as many cases in a variety of jurisdictions around the world continue to proceed, there is no question that this case represents a big win for Apple.

Without doubt, the monetary award is significant, but it is important to recognize that Apple has won much more than money in this case.  Apple has also dramatically enhanced its strategic competitive position.

The ruling against Samsung will force all competitors of Apple to reconsider their product offerings.

As the Samsung products used Google’s Android operating system, this case provides a competitive setback for Google, an important Apple competitor.  The competitive landscape for mobile devices will be dramatically influenced by the results of this case.

Finally, there is an entirely intangible and emotional aspect of this Apple victory.  A company that prides itself on being innovative and creative has, in its view, successfully defended its honor in this case.  Implicit in the Samsung arguments was a contention that the Apple products in question were not nearly as unique or special as Apple claimed them to be.

For a company with Apple’s self-image, it is likely that line of argument stung far more than any potential monetary or competitive harm presented by the case.  By siding so completely with Apple, the jury seems to have provided strong vindication for Apple’s vision of itself as a leader in creativity and innovation.  For the company that still clearly bears the mark of the dynamic Steve Jobs that vindication may well be worth more than all the money in the world.