Cheers for the Apple vs. Samsung Verdict

In the Apple vs. Samsung patent lawsuit, Apple won. Big time. Humongous. It was awarded over a billion dollars and almost all of its claims of patent infringement were supported. To which I say: “Fantastic.” I say this not just because I make a living writing about Apple (although I’m sure this makes me biased) — but because it was truly the “right thing.”

Apple and Samsung on scales

What happened

Samsung deserved everything it got last week. If anything, it was not hit hard enough. The company has spent the past few years shamelessly and deliberately copying Apple’s patented designs and technology. You only needed to walk into your local Staples or Best Buy over these past years and see how every Samsung smartphone and tablet looked like it was designed in Cupertino — perhaps by some Bizarro Apple not capable of doing as good a job as Apple itself, but still close enough to be confusing.

At the same time, let’s be clear: Samsung is hardly in any dire jeopardy over this ruling. The company won’t have to pay a cent until after exhausting an inevitable series of appeals. The billion dollar fine, even if the judge decides to triple it, will hardly put Samsung in risk of bankruptcy. As pointed out by Macworld, only two of the products affected by the ruling are still on store shelves (although this list may be in flux). And Samsung’s overall mobile line-up still outsells every competitor, including Apple. So I’m not shedding any tears for Samsung.

So again, I say: “Fantastic.” Last week’s ruling is a welcome victory, not only for Apple, but for anyone that doesn’t want to see Apple’s work and innovation punished by what are essentially cheap knock-offs.

But, you may ask, what about the argument that says patented aspects of Apple’s iPhone and iPad designs are so obvious and compelling they shouldn’t be restricted to one company? According to this view, doing so is like allowing only one car company to use a “circular steering wheel.”

To this I say…what nonsense!

First, if there’s a problem at all, it is with what the government permits to be patented. Personally, I’m disgusted with the entire “patent troll” industry and, more generally, the amount of money companies spend on purchasing patents and suing each other. I wish there were a better way. Maybe someday there will be, although I’m not holding my breath.

Regardless, as long as the laws are the way they are, Apple is well within its rights to take advantage of them. It would be foolish not to do so. Other companies certainly give it their best shot to sue Apple on an almost daily basis. Why shouldn’t Apple fight back?

Besides, there is no patent on the shape of a steering wheel — or the fact that all cars have a gas and brake pedal. Car manufacturers are free to create cars that are similar to their competitors in many fundamental ways. And so they do. And they continue to imitate each other, in areas that are not patented, as the designs of cars evolve. That’s why, unless you see the manufacturer’s logo, it can be difficult to tell one brand of car from another by their exterior look.

Even ignoring patent limitations, the iPhone is different. Apple’s iPhone design is nothing close to a circular steering wheel. There were smartphones well before the iPhone came along. Those older smartphones neither looked like nor acted anything like the iPhone. What Apple did with the iPhone was distinctly new and different. No one had ever seen anything quite like it before. This is obvious in retrospect. That’s why the iPhone became such a huge success. That’s why everyone is now trying to copy it.

To turn this around and argue that, because Apple’s design is successful, it is also so “generic” as to require that others be allowed to copy it—that’s an argument that should never get off the ground.

What may happen next

Despite what I’ve said here, I do have one concern about the impact the verdict may have on future innovation. I’m not worried about Samsung. Or companies like them. To hell with them. Let them come up with their own original ideas or die.

I am worried about what this might mean for a honest company, big or (especially) small, that comes up with an innovative idea. What if Apple claims (perhaps without justification) that the competitor’s idea infringes on Apple’s patents? Will that company be willing (or even able) to fight Apple? Can it afford to risk losing big, as Samsung did? Or will it immediately back down instead? Might the company not even introduce its innovation—out of fear that doing so might trigger a combative response from Apple? Will the innovation ultimately be lost (or perhaps scooped up by Apple)?

It would be wonderful to imagine Apple as a benevolent dictator, one that would never take unfair advantage of its power. It would also be wonderful to believe in Santa Claus. I do worry about whether Apple might wind up with too much power and control over the market.

But that’s a worry for another day…and for possible government action down the road. For now, I remain confident that truly innovative ideas can still emerge and thrive. And I’d be willing to bet that most of them will continue to come from Apple.

If you own Apple stock, last week’s ruling was a big win for you. On Monday, AAPL closed up over 12 points — as a direct result of the verdict. This follows a month of gains that have seen the stock rise over 100 points. Sure, there will be dips in the future (especially if Apple’s fall announcements and quarterly financial statements don’t live up to analysts’ expectations). But my educated guess (bearing in mind that I am not a financial analyst) is that Apple will show year-over-year market gains for at least the next two years.

Why? Because I believe Apple has a string of eye-popping new products in its pipeline. Further, a near-certain fallout of the Samsung-Apple ruling is that companies will have a harder time competing with Apple.

First, they can no longer simply copy Apple’s efforts. This, in turn, will precipitate delays in competitors bringing new products to market. Together, this should allow Apple to expand its market share over the coming months. In fact, I expect to see a continuing shake-out where several smaller smartphone and tablet companies disappear altogether.

One last thing: The Apple-Samsung trial did not directly address similarities between iOS and Google’s Android software. I’m still waiting for that shoe to drop. We live in interesting times.