Wednesday, August 29, 2012

Apple v Samsung - The Verdict: Copycats and Knock-offs

So the verdict in San Jose is in and Samsung was found to be willfully infringing on Apple's patents. For detailed coverage, All Things D has a great Apple v Samsung summary page of the trial and links to several jury-member interviews. For an in-depth explanation and analysis of the patents and the legal proceedings, I think that Foss Patents is unparalleled.

Reactions to the Verdict
As you might expect with any contested issue, you can get find different voices. Marketplace found people in Korea who simply expected a home field advantage verdict -- Apple wins because they are local and they employ lots of people here. All Things D had a quote from a guy from Microsoft talking about how it was a win for Windows Phone. Kara Swisher captured a rather amusing interpretation of Google's response.

Samsung tries to spin this as, "a win for Apple, but as a loss for the American consumer" and a case about giving "one company a monopoly over rectangles with rounded corners," this reality is far from that. One look at the details of the case and the patents involved will lead most people to the same conclusion. But like much of modern politics and media engagement, Samsung seems to believe that if it can win the PR battle, that the facts will rewrite themselves.

If you read through the jury interviews, you'll find that the jury really wanted to find examples of prior art. Apparently, it made the first day of deliberation a rather heated one. But, in the end, they found that there was overwhelming evidence.

Perhaps the most interesting analysis of the verdict that I came across was from Farhad Manjoo on PandoDaily. Copying Works: How Samsung’s Decision to Mimic Apple Paid Off in Spades is a thoughtful analysis of how Samsung's decision to copy Apple was a successful business strategy.

His post is a great read -- he tells the story well -- but it's also rather amusing to read the comments. It's eerily reminiscent of the old Mac v PC back and forth. Perhaps the real lesson here is that, for all of those Apple evangelists, there are an equal number of anti-Apple wackos, the Tea Party nuts of the technology world. For them, the idea that Apple wins and that people copied Apple designs is kind of like the whole black president thing -- a travesty. Or a conspiracy.
Show me the prototype. Are you going to tell me that your 'computer' doesn't resemble the one from 2001: A Space Odyssey?
The other thing which I think that Farhad really captures with his post is that, while the penalty for violating Apple's patents may seem steep in a consumer sense of scale, when you compare that to the business that Samsung has been able to build, the actual amount is peanuts. It's certainly not a disincentive. Samsung will be fine. They will move forward with new phones that don't violate the letter of Apple's patents, but they will remain competitors. First they mimic, then they evolve.

Tales from the Copycat Hall of Fame
In the technology industry, there have always been copycats. Remember when Huawei was trying to compete in the telecom space and their new switch product bore a remarkable resemblance to a Cisco switch -- right down to duplicate bugs and the Cisco name in the Huawei product manual? Sure a settlement was reached. It goes without saying that within their territory, governments can dictate the terms that businesses operate under -- sometimes those terms can be nationalistic -- but that's not really the point here.

The real point is that, nearly a decade later, both companies continue to sell products. Many customers, partners and/or whatever-else continue to do business with them. They did not get a Scarlet "C" to wear on their business cards. There may have been a period of 'lost face', but that faded. Whatever traditional business rules that they may have violated, their violations weren't so heinous that other businesses refuse to do business with them.

Of course, if you're a start-up, remember... don't try this at home. The penalties for robbing a bank like Bonnie and Clyde are far more serious than the penalties for stealing millions and causing a complete financial system collapse. Do that, and you're probably 'too big to fail".

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