Apple vs. Samsung Lawsuits: Clash of the Titans!
Rita is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Apple (NASDAQ: AAPL) recently won two lawsuits against Samsung Electronics as the court granted Apple’s request for pre-trial injunctions on grounds of possible infringement of patents held by Apple. The maker of Google’s (NASDAQ: GOOG) Android powered master smartphones, Samsung has been dominating the smartphones space for some time now. With a 29% worldwide smartphone market share, Samsung is the ruling champion and Apple is not far behind. Apple with its 24% market share is gaining momentum rapidly to take on the ruling champion.
The two Titans: Apple and Samsung have been battling for a long time now, both in the market place and in the court. The South Korean smartphone maker poses a serious threat to Apple and the later is surely worried about that. So, are these lawsuits ways to get back at Samsung? Is Apple attempting to settle scores?
The lawsuits
The first law suit was filed by Apple against Samsung a few days back where the iPhone maker requested the court to grant a pre-trial injunction against the sale of Samsung’s Galaxy Tab 10.1 tablet in the U.S. And now, the company filed another lawsuit against Samsung requesting the court to grant another pre-trial injunction against selling the Google Nexus phone. The week has been a good one for Apple with two back to back wins against Samsung, specially because it is not at all easy to get pre-trial injunctions approved.
Prior to these, Apple had filed similar lawsuits against Google, requesting the court to grant a pre-trial injunction on selling Motorola smartphones. However, that plea from Apple got rejected by the court as this would harm consumers. Nevertheless, Apple had a good week this time and bagged two great wins in the smartphone and tablet war.
The issue behind the law suits
Apple has been an innovator, and iPhones and iPads are the best among its innovations. Automatically, Apple is very possessive about these two and owns a lot of patents related to the look and feel of the devices. Apple’s point is that Samsung infringed the patents through its Galaxy Tab 10.1 and Galaxy Nexus smartphone and thus caused irreparable damage to Apple. As a remedy, Apple requested the court to stop Samsung’s products from being sold. In response to Apple’s plea, the court has granted only pre-trial injunctions, that is, the devices won’t be allowed to be sold until the lawsuits are over.
Apple has problems about the fact that Samsung’s tablet and the iPad are "virtually indistinguishable" and Samsung violated the patent rules by illegally copying the look of the very popular iPad. Secondly, Apple has objections about the similarities of the Galaxy Nexus handsets with the iPhone, violating the iPhone’s patents which includes a patent related to Apple’s latest voice activated assistance system “Siri.”
Now what?
The court was convinced with Apple’s debate regarding the damage it is likely to face in the absence of the injunctions and finally ruled in Apple’s favor. Following the ruling, the court has asked Apple to post a $2.6 million bond for the first lawsuit and a bond of $96 million for the second lawsuit. In the event of Apple losing the lawsuits, these amounts will be paid to Samsung, since these law suits are likely to cause financial damage to Samsung resulting from the temporary ban on the sale of the two products. The court has instructed the ban on selling the Galaxy Nexus and Galaxy Tab 10.1 to prevail as soon as Apple posts these two bonds.
In response to all of this Samsung officials said they were pretty disappointed with the court’s decision and they will do everything in their power to ensure the availability of the Nexus handsets. Galaxy Nexus is one among the very few handsets which run the unaltered Ice Cream Sandwich version of Android and also will be among the first devices to experience Android’s next version called Jelly Bean. However, in the case of Galaxy Tab 10.1, the company is not much worried as they don’t expect the ruling to have a substantial impact on Samsung’s business as they have a variety of tablets already available in the market.
Concluding thoughts
As the fight between the titans continue, there is nothing we can do but wait for things to settle down. Is Samsung truly a worthy challenger to Apple, or did it actually violate the patent terms and compete with Apple by taking unfair means? Is Apple taking these steps as an unbiased market player or it is trying to get even with Samsung? Well, we will have the answers soon. If you ask me, I feel, Apple is not wrong in taking these steps. One must protect its intellectual properties and the lawsuits are definitely a part of the crucial business strategy.
analyse360degree has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
