Saturday September 1, 2012
Is Apple stifling innovation?
A QUESTION OF BUSINESS
By P. GUNASEGARAM
A US jury decision against Samsung and a Japanese court decision for the Korean conglomerate raise questions over the entire patent issue
WOULD anyone have expected the Apple-Samsung case to be decided in favour of Samsung by a US court in a jury verdict and against Apple, which is by now even more American than apple pie? I certainly didn't.
But there is an appeal on the cards and it is still anyone's guess if Apple will be allowed to claim such things as shape and “pinch to zoom out” as its right. But if it is, then that's a big setback for other smartphones.
Samsung, however, scored a victory in a Tokyo court which ruled yesterday that the Korean electronics giant, and supplier to Apple, did not violate any patents. That victory will no doubt raise questions as to how fair the US jury was in making an award in favour of Apple, including US$1bil in damages.
The US decision means eventually consumers there may have to pay more for Apple's iPhone, iPod and devices because others may not be able to emulate features that may have made their devices a success. That will have repercussions on prices elsewhere as well.
In the motor industry there have been many trends in shape over the years, moving from angular to rounded designs. If some car company had decided to sue every other car manufacturer for a similar look and feel and succeeded, car shapes may have had great difficulty evolving.
But the best manufacturers of cars did not. In fact some of them deliberately did not register safety patents just so that others could use the innovations to increase passenger safety.
If Samsung is said to have infringed on shape, then there are a number of other manufacturers who are in trouble too. Rectangular faces with rounded edges are a natural evolution in the mobile phone industry. Certainly, other manufacturers are going to hope there will be a reversal on appeal.
Apple did not invent the touch screen. Thus, it seems strange that it has a patent to “pinch to zoom” which is basically one way of many ways to use a screen. That's like patenting a particular method of driving a car!
Apple has already followed up on its US victory, seeking an injunction to prevent Samsung from selling eight of its smartphones in the United States including some in the best-selling Galaxy range.
However, hearing of the injunction will only be in December and some of Samsung's models may be phased out by then, which offers some consolation for Samsung.
Some US commentators view the case as a proxy war against another US company Google which makes the Android operating system used in Samsung, HTC and other smartphones.
An article in the San Francisco Chronicle says that the late Apple chief executive Steve Jobs was once a friend of Google's co-founders but considered Google's move into mobile a betrayal that demanded revenge.
“I'm going to destroy Android, because it's a stolen product,” he told his biographer Walter Isaacson. “I'm willing to go thermonuclear war on this.”
But despite the nice rhetoric, revenge from the grave it is not. Apple's strategy seems quite clear cut. Patent everything. Then tie up competitors in court if there is any semblance of product infringement and keep its competitive advantage intact as long as possible.
Reports put its profit margins on its iPhone at as high as 50%, a huge mark-up in a cutthroat market which it has been able to achieve by parlaying an excellent product with some very deft marketing and public relations.
That made it the biggest company in the world. Many would say that the product, however, is not necessarily the best anymore if ever it was, especially since competitors are fast catching up with their own nifty designs and features. And marketing and PR too Galaxy is getting a name for itself and no doubt the cases around the world will help.
Thus it makes much economic sense for Apple to prolong this by any legal means it can for as long as possible. Does Apple care that it may be stifling innovation, raising costs and hurting consumers in the process?
Probably not. And why should it? It is a company based on the profit motive. But it needs to remember that all publicity is not good publicity and if it gets a reputation as a bully, its entire image and that of its products could change.
American companies can carry this patent thing too far and they have. Recall a few years ago when some of them tried to patent the production of pesticides from neem trees. For thousands of years, extracts from the leaves of the neem have been used for precisely that.
The American jury system cannot but be expected to favour a US icon such as Apple which is seen as brash, innovative and successful, the very image of the US itself. But that's not going to be the case in the rest of the world. And even in the US, if learned judges make the decisions instead of a jury, the results may well be different.
Really, no one is going to benefit and there may well be detriment, if we allow patents to get the better of us and stifle innovation and hinder the development of new products and services at lower costs.
It would be a travesty of sorts and ironic indeed if Apple is now seen as a technology inhibitor instead. Beware!
P Gunasegaram is an iPhone user but only because the service provider gave such a good deal.