Apple vs Samsung

Epic court battle over smartphone features continues

As Apple Computer prepares, with the forthcoming launch of the new iPhone 6s in India, to challenge Samsung's dominance of the Indian smartphone market, a recent ruling from an American court adds a new dimension to the ongoing four-year battle for intellectual property rights between the consumer electronics giants. The US Federal Court of Appeals said Apple was entitled to a "narrow order" preventing Samsung from using Apple's slide-to-unlock, autocorrect and quick links features in its phones and tablets. The court stated that "the right to exclude competitors from using one's property rights is important...To rule otherwise, would eliminate patent rights of inventors of certain features in multi-component devices". Apple had appealed a verdict in May 2014 from a California court which awarded $119 million in its favour but refused to prohibit the incorporation of such features in Samsung's devices. The appeals court verdict means that Apple can now revert to that California court, and ask for an order prohibiting its Korean rival from designing a phone or tablet with such features. Samsung is appealing the decision of the appeals court, which will add yet another layer of legal complications.

These specific prohibitions are actually now irrelevant since technology has moved through several cycles since the original suits and counter-suits were filed in 2011. Samsung says it doesn't use two of these three features any longer, and that it uses the third in only one product. However, the size of any monetary award will be affected by the historical sales of all devices held to violate those patents. But the implications go well beyond the specifics of these features and prohibitions. In all multi-component devices, certain features are basic and integral to their function and design. To take an example, any passenger or commercial vehicle compliant with modern safety standards must possess airbags and anti-lock braking systems. If those features are under patent, there has to be a regulatory framework under which patent holders can license such patents out to all manufacturers either immediately or over an agreed time frame. This is needed in order to foster healthy competition and allow for consumer choice, while also ensuring that patents are respected and research and development efforts receive a return on investment.

The design of a modern smartphone or tablet involves licensing multiple patents owned by many different multinationals. Certain features, such as slide-to-unlock in this case, might not be essential to the actual function of the device but would surely influence consumer choice. If the patent-holder of such a feature refuses to license, an absurdly monopolistic situation might be created. This is why Google, HTC, LG Electronics, and so on were among the companies backing Samsung and they all argued in a joint filing to the court that a judgement like this could allow the patent owner "to unfairly leverage patents for competitive gain."

This judgement sets a precedent which could conceivably be cited to pull devices out of the market. While intellectual property rights surely require strong protection, it would be troubling if companies could establish monopolies on the basis of a few patents and a complete refusal to license. That would add new dimensions to "patent trolling". In terms of corporate rivalry and competition, too, it is an interesting situation. Consumer electronics and information technology are fiercely competitive, interlinked sectors where success is driven by intellectual property. Physical devices and software cannot be made, or improved upon, without recourse to licensing of patents held by many different entities. That leads to "coopetition" - where competitors must also cooperate and be collaborators. So, even as they fought a bitter battle across a dozen legal jurisdictions, Apple and Samsung continued to have a business relationship. The duo has now agreed to bury the hatchet in most parts of the world but they continue to duel in the US courts. Hopefully this particular case doesn't lead to a narrowing of consumer choice, without of course undermining research and development efforts.