Apple's Thermonuclear First Strike Against Samsung
David is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
If you pay any attention at all to the tech press, you've no doubt heard that Apple (NASDAQ: AAPL) has won a patent infringment lawsuit against Samsung in the U.S. District Court in San Jose, Calif. over the design of some of its Android-based phones. A jury awarded Apple $1.049 billion after determining that Samsung did indeed copy some of the iPhone's visual elements.
This situation mirrors another lawsuit in the 1980s between Apple and Microsoft (NASDAQ: MSFT) over the "look-and-feel" of the Macintosh and the Windows user interfaces. Apple had granted a license to Microsoft for the first version, but in Windows 2.0 Microsoft made a change to the interface that allowed windows to overlap. The case dragged on until 1994, where the court ruled that certain visual elements of Apple's interface weren't copyrightable.
The ruling appears to have gone against the precedent set by that case. Apple succesfully argued that Samsung had knowingly copied distinctive visual elements of the iPhone, including the home screen and the way scrolling through lists worked on the phone. The claim was also apparently bolstered by emails that Google (NASDAQ: GOOG) sent to Samsung asking them to tone down some elements as they looked too similar to the iPhone.
Google seems especially sensitive to claims that their Android smartphone operating system looks too similar to iPhone's. Steve Jobs regarded Android as a "stolen product," since it was developed by former Apple employees, and the late Apple founder threatened to go "thermonuclear." The Samsung lawsuit is equivalent to a first strike.
Google, for its part, has been consciously redesigning Android elements so that they look less and less like Apple's, including designing some distinctive-looking phones with Samsung, such as the Galaxy Nexus. The phones covered under the lawsuit and which Apple is seeking injunctions for are mainly older designs.
It seems this fight over smartphone platforms mirrors the earlier suit over graphical user interfaces. The iPhone is like the Mac: elegant, cleanly designed and exclusive to Apple. Android plays the part of the PC. It's not quite as polished as iOS, but it runs on a wide variety of cheap hardware. Android is still more popular than the iPhone, with over 51 percent of the smartphone market share. Apple sees an opportunity to become the dominant force in this segment and avoid repeating the mistakes in the '80s that led to the ascendancy of the PC.
If Apple insists on global thermonuclear war, then other companies in the highly competitive smartphone market will either have to fire back or head into the bomb shelter like Google is doing and come up with some more innovative products.
Apple could just as easily come after Research In Motion's (NASDAQ: BBRY) BlackBerry line, but with RIM posting two consecutive losses in the last two quarters, that would just be kicking a company when it's down. Apple could also come after Microsoft for Windows Phone, but the market share is so small that it's hardly a threat.
One possible defense against claims of copying the visual elements is that there was no other obvious way to make them. Microsoft successfully made this defense against Apple, but given tha Samsung apparently made deliberate changes to the Android software to make it more iOS-like, Samsung might not be able to repeat Microsoft's performance on appeal.
The mobile market is highly litigious, and manufacturers and investors should duck and cover.
Fool blogger David Delony has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. 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.
