Apple Can’t Go Thermonuclear on Patents Without Fallout

| Hidden Dimensions

“Stay Hungry. Stay Foolish.” — Steve Jobs, Stanford Commencement, 2005.

Mushroom cloudApple is right to defend its intellectual property in court. For a long time, when Apple was a weaker company, other companies, worldwide, made a modest living by following Apple’s lead. Nowadays, Apple has the money, resources and patents to defend its inventions and deserves to profit, alone, from its creativity.

And yet.

Android, as a product, has shown a remarkable tenacity. The 21st century smartphone, as envisioned by Apple and copied by others, has proven to be extraordinarily profitable. No company with money and a great legal staff is going to walk away from the prospects. There’s just too much at stake in the future of smartphones.

And so we have to wonder what the downside is of Apple’s ongoing, perhaps, eternal legal battles. No endeavor of this magnitude can be without cost.

Despite the upfront value of Apple’s crusade, there is something to be said for not paying too much attention to the competition. One proponent of that is Seena Sharp. In November, 2010, long before the Apple v. Samsung suit went into high gear, Ms. Sharp wrote an essay at The Directive entitled “Competitors: Fuh’Get About ‘Em! How too much focus on your competition can throw your company off course”

Ms. Sharp’s thesis was:

Companies with too much focus on competitors tend to offer more of the same, while fiercely defending the differences that customers either don’t notice or don’t care about. Then they end up with a product or service that’s faster/bigger/cheaper, when what the customer wants may be something else…”

We’ve seen that before with other companies. When the goal is to crush the competition, product design is, in turn, driven by the competition. As Ms. Sharp explains, in dwelling on the competition, customers may no longer view your company as a leader, and that can, in turn, affect innovation. However, if the goal is to do something wonderful, then a company doesn’t dwell on the competition so much.

Of course, we currently see Apple as an innovator and a leader by virtue of the iPad and iPhone, products that were nurtured and brought to fruition by Steve Jobs. In one sense, however, Apple has been too successful. iOS, the iPhone and the iPad were breakthrough technologies and Apple’s intention is to dominate the marketplace by virtue of its inspiration and perspiration. That singular sensation has its dangers. After all, going “thermomuclear” also means fallout.

Danger Man

When you’re on top, and the whole world seems to be stealing your stuff, and you’re constantly at war, there is a human tendency, to be resisted, to focus only on profitable avenues. Tough questions are asked of any proposed project. Will it help the war effort by offering a leg up on the competition? Does it promote the brand? Will it be profitable? Will it help gain marketshare?

Any new idea that doesn’t meet these criteria might be deemed not critical enough to the war effort. That’s why, as Ms. Sharp explained, products tend to be the same. quoteSerious departures from the combative norm might be too risky. Failure gives the competition an opening.

One example of that is Microsoft’s Surface tablet. Microsoft’s obsession with Apple drove it, first, towards risk and innovation with Courier, but in the end, the company retreated into the comfortable, safe arms of Windows.

We see this manifestation in iOS and OS X. It’s safe to add more and more features because features are talking points. If you have more features than the competition, you are, presumably, better and more innovative than the competition. It’s also profitable to follow social fads in order to keep your products appealing, but following rather than leading can also back a company into a corner.

Finally, when it comes to the search for fundamental breakthroughs in everyday technologies, the Return on Investment (ROI) looks dubious in the face of heated competition. Apple’s email app is so ordinary, Tobias van Schneider has taken up the challenge to make things right. An inconvenient truth is that a very ordinary Safari hasn’t set the world on fire. Google seized the initiative with Google reader news feeds, something every iOS RSS reader now depends on.

Glory Road

The future holds some fabulous challenges for Apple. The pricing of the (rumored, but almost certain) 7.x-inch iPad will be critical, along with corresponding iPod touch positioning and pricing. The design and future of a top-of-the-line desktop, the Mac Pro, seems always in doubt. At some point, as Siri matures, Apple may have to think about iPads with larger (than 10-inch) displays, driven on the desktop by voice rather than OS X’s mice and trackpads. The (rumored) Apple HDTV project is fraught with traps set by the TV industry. Dramatic change suddenly looks very risky when your former friends and partners have become capable opponents on the battlefield and in court.

We think we’re seeing, from the best available information, that the iPhone 5 will have a larger display. If this is driven by customers, are those customers the same ones fascinated with the Android phone’s larger displays? Is a larger iPhone 5 display an Apple innovation or an obsession with the competition?

Apple remains the most innovative company in the world. Plus, Tim Cook said it himself, almost to the point of painful overemphasis. “Our North Star is to maniacally focus on making the world’s best products.” I like that. It’s a worthy goal to stick with.

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Comments

Bosco (Brad Hutchings)

Nowadays, Apple has the money, resources and patents to defend its inventions and deserves to profit, alone, from its creativity.

John, what marginal social benefit would be gained by Apple getting to “profit, alone”? The market is operating right now as if Apple doesn’t have that right on various (questionable and dubious) patents that Apple is using to defend its position in phones and tablets. We have plenty of choices, and Apple, the relentless innovator, can’t even keep up with the pace of the market. Yet Apple is amazingly profitable, predominantly from phone sales.

Because if Apple is allowed to exclude others, with the backing of the United States, it will simply give Apple an excuse to slow its own pace of innovation, not offer form factors and features that the marketplace clearly demands, and charge exorbitant prices to pad its profits. The result would be not so different than Obama’s announcement that USDA will buy meat from farmers who can’t afford to feed cattle because 40% of corn needs to go to a ridiculous ethanol production program. Bottom line is that a special interest—Apple or cattle ranchers and corn farmers—get bailed out and the rest of us pay higher prices for less quality and less choice.

John Martellaro

Brad:

what marginal social benefit would be gained by Apple getting to ?profit, alone??

- Preservation of a willingness by Apple, any company, to invest in risky, expensive R&D.

- Protection of American innovation from copiers.

- Preservation of an ethic that says hard work deserves appropriate rewards. In other words, justice.

Bryan Chaffin

Because if Apple is allowed to exclude others, with the backing of the United States, it will simply give Apple an excuse to slow its own pace of innovation, not offer form factors and features that the marketplace clearly demands, and charge exorbitant prices to pad its profits.

A counter, more realistic viewpoint is that it will force other companies to innovate, to do their own inventing, in order to compete.

It’s not like Apple has a lock on all good ideas. Other companies could be just as disruptive as Apple if they only tried.

Bryan Chaffin

John, what marginal social benefit would be gained by Apple getting to ?profit, alone??

I’ll add that this sounds like a line that would be uttered by an Ayn Rand bad guy.

Seriously.

John Martellaro

One of the things I would run with if I were competing against Apple’s iPad is the concept of multiple apps on the screen at the same time.  For example (below), taking notes while reading a Web page is something writers do all the time.

http://news.cnet.com/8301-1035_3-57493353-94/with-galaxy-note-10.1-samsung-gets-a-fresh-start-in-tablets/

Bryan Chaffin

I agree, John. That’s a soft spot for Apple, IMO. Proper multitasking should be increasingly possible as the underlying tablet tech progresses.  From real estate to CPU muscle to battery life, Apple’s iOS limitations will begin to make less sense as time goes on.

Bosco (Brad Hutchings)

John, that’s why I asked about marginal benefits. The status quo where Apple is mostly unable to gain government protection from other competition has delivered the first item to Apple.

Your second item is just overgeneralized bully talk. There are plenty of things that we’re allowed to copy. In Apple v. Samsung one major point of contention is whether many of the things to which Apple claims exclusive rights are even legitimately claimed. And there are plenty of legitimate recourses to “copying” that don’t require government force or special privileges.

The implication of your third item is offensive. What? Nobody did any work making competing phones and operating systems? Is that, for example, because Google hasn’t asserted a patent against Apple for its notification scheme that obviously informed Apple’s late to the game implementation in iOS?

@Bryan: Ayn Rand’s views on copyrights and patents pre-dated both software patents and massively asymmetric returns on investments. It would surely be interesting to hear her try to break down the current IP clusterfrack to first principles.

skipaq

Any company has the right to defend/not defend its’ IP. What anyone thinks of current patent law doesn’t make a difference. The only lawful options are: respect the IP rights of others or prepare to defend what you are doing. This matter is now in the phase of Apple defending its’ IP and other companies defending what they have done (some are waging bogus FRAND attacks as a defense.)

Apple’s tactics are not all in the courts. “Thermonuclear” has also involved pushing Google from favored status on iOS and bringing in other supplier options besides Samsung. It is an attempt to starve those companies of cash flow from Apple’s innovation. Does Android or iOS provide more revenue to these companies? If that cash begins to dry up in any appreciable amount this will prove to be more effective in the long run.

There is also what these companies can’t see and don’t seem to do on their own. Apple will not stop working on the next big thing. They have already managed to outflank Microsoft and their desktop stranglehold. These competitors should be careful about what comes next.

Bryan Chaffin

Agreed, it would be interesting, Brad. She was so delusional about so many things, I truly wonder what her take would be.

But my original comment wasn’t aimed so specifically at patents as it is the broader premise. I find it interesting that someone who has a passing admiration for her philosophy would not be Apple’s champion on the issue of whether or not Apple deserves to profit solely from its work.

The notion that others should be able to take what they want from Apple’s R&D efforts sounds like bad dialog from a Randian villain.

Bosco (Brad Hutchings)

Apple?s tactics are not all in the courts. ?Thermonuclear? has also involved pushing Google from favored status on iOS and bringing in other supplier options besides Samsung. It is an attempt to starve those companies of cash flow from Apple?s innovation. Does Android or iOS provide more revenue to these companies? If that cash begins to dry up in any appreciable amount this will prove to be more effective in the long run.

And you may be surprised to learn that I completely support Apple’s right to play the game this way! I’m not terribly optimistic about how effective it will be at achieving Apple’s dream of being the only company allowed to innovate, and it seems like a real waste of energy in a rapidly growing market that Apple can’t keep up with, but whatever gives them a special tingly feeling between the loins about their self-worth!

@Bryan: “passing admiration” is a bit strong. I’m the guy who loves that smart ass who will point out the turd floating in the punchbowl, just because everyone else willfully ignores it to keep up appearances. Rand did a lot of that.

Apple could always lock up its innovations and require its customers to live fully monitored lives on a secluded island so that nobody can “copy”. Unfortunately, that’s a risk we all have to take when we put our work out in public, and especially when it becomes wildly popular. As skipaq illustrates, there are extra-legal ways to deal with those you perceive as rip-off artists.

Bosco (Brad Hutchings)

The notion that others should be able to take what they want from Apple?s R&D efforts sounds like bad dialog from a Randian villain.

On copyrights, she most certainly was an absolutist, much in line with “moral rights” in the European tradition. We have some strongly embedded “fair use” exclusions that diminish such rights in the United States in specific areas, and generally serve to encourage small scale remixing and reusing of *ideas* and even limited amounts of actual *expression*.

On patents, though, the bar is so much lower for obtaining one now, and the realm of domains vastly expanded from when she opined on them. There is even variance by whole industry, both in patentability, and practical economic importance of patents. Getting a drug to market costs billions now, and takes many years under which the patent is in effect. Fashion enjoys zero patent protection outside of materials. Designers copy before dresses are even off the runway. And yet that industry thrives.

Bryan or John… What marginal benefit is gained when other computing device manufacturers can’t use magnetic power connectors? Or when parts suppliers can’t make a $10 replacement power brick for a MBP? How are any of us who own Macs benefited by Apple’s unwillingness to license the relevant patents?

stilep

The pioneering innovations they seem to be upset about currently, that must have taken 100s of millions of dollars in r+d and not to mention 10s of thousands of man hours is the incredibly pioneering “black rectangle with rounded corners” design that they clearly were the first ever to come up with.  That and over-scroll bouncy effects.

Bryan Chaffin

Brad, I’ll readily acknowledge that there are examples on the margins where we, as consumers, do not benefit from Apple’s efforts to control all things.

The power connector is one such example, though I’ll add the caveat that Apple did figure out how to do it. Apple solved a problem no one else had successfully tackled. If Apple let companies make adapters for its own devices without a license, the company could be faced with PC makers using the technology in their devices. In general, one has to protect one’s IP or lose it (more true with trademarks than patents, of course).

So even there, I can find a case for Apple stopping the el-cheapo connectors while acknowledging the benefits to me, as a consumer, for cheaper options.

But, examples on the margins don’t necessarily invalidate Apple’s efforts as a whole.

Bryan Chaffin

Brad, the comparison to the fashion world is an interesting one, but not a straight analog. The fashion industry thrives even though there are knockoffs because the of the cachet of the major fashion labels. That cachet allows for the sale of high priced clothing at high margins despite the presence of the cheap knockoffs.

The electronics industry doesn’t work that way from my perspective. The rush to the bottom led by Microsoft and its OEMs (notably Dell) has resulted in only one brand having any cachet.

That brand is, of course, Apple. You can’t separate that cachet from Apple’s willingness and ability to both perform its own R&D and protect the resulting IP.

Bryan Chaffin

The pioneering innovations they seem to be upset about currently, that must have taken 100s of millions of dollars in r+d and not to mention 10s of thousands of man hours is the incredibly pioneering ?black rectangle with rounded corners? design that they clearly were the first ever to come up with.? That and over-scroll bouncy effects.

This is a straw man argument. It requires pretending that Apple’s devices don’t have an identifiable look and feel, and then further pretending that all of Apple’s R&D efforts come down to a “picture frame.”

The overscroll bounce snipe is particularly egregious. Even if you are willing to pretend that Apple’s overscroll bounce wasn’t innovative and didn’t require effort?you know, because you’ve done something?if it’s such a non-big-deal, the competition should be able to just whip up something else that leaves Apple’s overscroll bounce in the dust.

Heck, why not just whip up a solution yourself and give it to the world to use for free.

[Post edited for politeness! - Bryan]

skipaq

@stilep should read the material that comes from Samsung about the challenges they faced when Apple released the original iPhone. His comments, if true, would mean that the designers and engineers at Samsung were completely incompetent.

I don’t believe that is the case at all. They have lots of talent at Samsung. What they were up against was time to market with innovative solutions of their own. Put another way, the entire mobile phone industry was caught flatfooted. Google wasn’t because it had inside information.

wab95

John:

A timely topic, although one I am increasingly inclined to believe is off centre to where Apple is taking its argument.

I like Seena Sharp’s piece, and she makes a relevant point about company vs consumer focus, a point about which I don’t believe Apple are oblivious.

When SJ said that he was ‘prepared’ to go thermonuclear, it seems that many in the blogosphere assumed that he and Apple, in fact, had done so, and the current court cases were his ICBMs in flight. I, for one, see no evidence of nuclear armageddon; nor, for that matter, a single mushroom cloud, and argue that Apple have yet to act on the threat.

As with nationstate superpowers (we’ve only seen two attain that status, although a third seems imminent), a suite - indeed a well-defined protocol - of options have to be played out before one calls for the launch codes. The whole point of such a course is that its mere contemplation is so awful, all rational parties with an intact chain of command will be compelled to the bargaining table to stave it off. What made detente so effective during the Cold War, and nuclear war so untenable, was that there could be no winners - not so much as a pyrrhic victory. Everyone dies, or suffers its equivalent - being reduced to radioactive rubble.

Inherent in every entity is the desire to survive, which is derived from the humans that comprise those entities. The will to live drives us to find sustainable solutions that permit that survival; ergo Ms Sharp’s point (no pun intended). Death from irrelevance is no more palatable than death from legal attrition or all-out conflagration, in whatever form that might take.

Apart from an educated geek fringe who avidly follow the intricacies of the industry (you know who you are), most - nay the overwhelming majority of - consumers are wholly unconcerned with IP court battles between Apple and Samsung, or for that matter, Apple’s battle with Google by proxy. All they want is to be able to use, and benefit from, the latest tech with minimal investment in a learning curve, maximum efficiency, and a boatload of fun. They didn’t know about the Flash fight, nor did Adobe’s quiet surrender make the front pages of anyone’s newspaper; they don’t know, nor do they care, which of Moto’s patents were/were not useful to Google in its battle with Apple, nor did they shed a single tear over Moto’s ‘restructuring’ at Google’s tender hands.

What they care about, and what they would respond to with their wallets, would be a restriction of options or features that would materially affect their productivity, and/or a lessen the pace of progress into a post-PC era. Anyone who is not convinced of this should talk to RIM, or for that matter, an exec at MS about the angst that has gripped Redmond over the release of Windows 8 and what that release might mean for the future of the company. And while they cannot predict it, nor even articulate in advance what they want, consumers recognise progress when they see it by its effect on their options, their productivity and their sense of well-being.

Any company, Apple included, that shifts its focus from the consumer to the competition, and plays to the competition, will lose the consumer by becoming irrelevant to the consumer. The consumer, and this includes enterprise which has begun to follow the personal consumer?s footsteps (part of the new paradigm, and proof of the existence, of the pos-PC era), will move onto companies that provide consumer-enabling options. Once lost, they may never return. Ask RIM.

As the company that redefined the centre of the mat to be the consumer in its fight against an erstwhile enterprise-centric competition, and by dominating that centre, has gained its current place of leadership, it would be irrational for Apple to exercise, as its first or current option, thermonuclear war on its rivals when it, more than any other company, has so much to lose.

Confusing these courtroom skirmishes, and any tactical advantages they may/may not confer, with an extreme measure of last resort is folly and belies the expert credentials of one who would venture this opinion. Rather, I see Apple raising this spectre, as have other superpowers before it, as a measure of how far it is willing to go, if necessary, to thwart a mortal threat to its survival.

Happily, Apple is thriving, as are its clients. Indeed the threat, substantiated by a war chest that a modest nation-state would envy, appears to have had the desired effect. Apple?s rivals are awakening from their torpor of entitlement - that sense that it is their right to ape Apple with impunity - and its ill-begot offspring of near-indistinguishable product imitation.

For Apple?s future, including their future products and profitability, I believe detente is satisfied, mutual assured destruction (MAD) is averted, and the skirmishes will play themselves out.

John Dingler, artist

Samsung and Google behave as if they resent that Apple does not allow and others to make clones. Feeling entitled to Apple’s intellectual property, they now selectively steal the best code and design elementss to, in effect, clone anyway.

John Dingler, artist

Since Ayn Rand died a Socialist, and Samsung steals from those with more means just like a Socialist, then the bedridden Ayn Rand’s would likely favor Socialist Samsung.

Bosco (Brad Hutchings)

Samsung and Google behave as if they resent that Apple does not allow and others to make clones. Feeling entitled to Apple?s intellectual property, they now selectively steal the best code and design elementss to, in effect, clone anyway.

That’s an awfully strong statement considering that Apple has not actually definitively established the IP rights it is asserting. Imagine a world where companies could just assert that they own some concept, without ultimately having to defend their ownership in court? What’s to stop a company from claiming they own something completely absurd, such as a rectangle with round corners and a bezel?

If Apple and its fans really believe that these asserted patents are valid and “owned” by Apple, you can be comfortable knowing that a just court will find infringement and find an appropriate remedy suitable to Apple. No need to make high level ad hominem attacks alleging “slavish copying”, “entitlement”, “theft”. That’s how I know you don’t really believe what you’re spewing grin.

BTW, John, please show me where Google or Samsung copied Apple’s code. Dramatic is fine, but you can leave stupid at home.

Myob

Rediculous to say that Apple “invented” the smartphone.  A tech blogger should know a lot better than that.  I spent 18 years in Japan, and watched how it took Apple and others nearly 10 years to catch up to the phones which we had domestically in Japan.

And Yeah… Apple made a RECTANGULAR tablet.  Whooeeee!

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