Apple’s Not so Secret War

Motorola has filed a new lawsuit in the Southern District of Florida, in addition to its previous complaint against Apple. Included in the new suit are complaints about Apple’s iCloud and the iPhone 4S that couldn’t be added to the previous suit, according to Florian Mueller at FOSS PATENTS.

The Google acquisition of Motorola is not yet complete. Even so, the agreement with Google stipulates that Motorola cannot start a new lawsuit with out Google’s blessing. Mr. Mueller concluded that Google must have authorized this new action. Why the second lawsuit? Mr. Mueller explains:

“As I mentioned before, Motorola would have preferred to add the iPhone 4S and the iCloud to the list of technologies accused in an action that started in late 2010. However, that litigation is already far along, with a trial scheduled for this summer, and the judge rejected Motorola’s supplemental infringement contentions as untimely but said that MMI [ Motorola Mobility, Inc.] would be free to accuse those technologies in a separate lawsuit.”

Google is pouring on the coals.

This is War

Aircraft carrierWe know that Apple has gone thermonuclear against companies that it feels have infringed on its patents related to iOS, the iPhone, the iPad, etc. Apple may have even spent US$100 million to date on this litigation. Even if the rumor isn’t true, we can surmise that Apple is spending a huge amount of money on these cases.

What may be happening is this. Back when Apple was niche player, the whole PC and phone community got along fairly well. There were occasional spats, but the general tenor was that they were all in a very large market, big enough for everyone. Dell, HP, Lenovo, Toshiba, Asus and others merrily sold PCs and carved out their markets. A billion feature phones were sold every year, and companies that made mobile phones had their regional strengths.

Apple was niche player with a UNIX operating system and a few percent of the market. It wasn’t a major player.

All of a sudden, Apple burst on the scene in 2007 with an insanely popular smartphone and a new OS, iOS, that formed the basis for a tablet that would eventually come to greatly upset the applecart. PC sales were threatened. Companies that had the phone market to themselves, like RIM, Palm and Nokia were suddenly threatened.

Apple did what Steve Jobs and Tim Cook have said they would do: vigorously defend their intellectual property. As a result, the rest of the industry was stunned and annoyed with Apple. First because Apple doesn’t play nice with other competitors, second because Apple keeps the whole pie, and finally because Apple was for the first time hurting their business. The happy family concept of “I’ll help you make money if you help me make money” was being undermined.

So Apple, a company that had been an easy pushover before, has become a major irritant and is threatening to completely own the tablet revolution. The rest of the industry can’t let that happen, and so is fighting like mad. It’s like WWII and Pearl Harbor. Without assigning corporate sides here, one country starts a preemptive strike and tries to win on the first blow, demoralize the enemy, and run the table in the South Pacific. The defender, mad as hell, fights back, blunts the enemy in the Coral Sea and wins the next round at the Battle of Midway, buying time to build up its forces.

This is why Apple seems to be meeting so much strong, imaginative resistance. The various companies are running up huge legal fees because the stakes are high. Plus, all sides are taking both tactical and strategic approaches. Some tactical losses may turn out to be strategic wins such that the defender is left spent and weary. New vulnerabilities are exposed.

I think this is going to go on for a long time. Some have said the warriors will tire of the battle and settle everything with license fees. And that may happen in on a case-by-case basis. But Apple’s earnings report yesterday suggests that this $415 billion dollar company with $150 billion in annual revenue and nearly $100 billion in cash and securities isn’t done yet. It wants to run the table, and the only possible response by the defenders is to put up major resistance in the courts, buy time, and figure out what to do next.

If they can.


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