Patent wars: In Apple-Samsung fallout, one thing is certain -- more lawsuits
Patent law in the United States has been around for more than 200 years, but Apple's recent $1.05 billion jury verdict against Samsung for selling a too-similar design shows that this highly specialized area has become a much bigger and more powerful piece on the legal chessboard.
Local patent attorney Joseph Helmsen of Pepper Hamilton LLC says the surprise was not that Apple sued Samsung for copying its iPhone and iPad technology. "The shocking thing is the dollar amount" -- an amount that leapfrogs the 2006 eye-opening $612 million patent infringement settlement by the Canadian firm Research in Motion, makers of the BlackBerry mobile device.
Still untold is what impact the latest verdict, which Samsung officials say they will appeal, will have on other software companies such as Google, whose Android operating system is used in Samsung phones. But the potential for future lawsuits seems clear enough.
"The company is certainly going to feel the effects of this," said Mr. Helmsen.
Two days after the verdict, Google officials were quoted as saying most of the claims in the Apple suit don't relate to the core Android operating system, a move Mr. Helmsen speculated was meant to soothe the stock market.
What may follow are more lawsuits or, to avoid that, competitors may seek licensing agreements with Apple. Because of the Samsung verdict, Apple "is going to have a bigger club to wield in any kind of negotiation they go forward with," said Mr. Helmsen.
That's not likely to slow the internecine legal battles among software companies fighting over patents that represent untold riches. In April, Oracle Corp. accused Google executives of unlawfully taking some of its Java technology when it developed the Android software, a charge Google denied. In June, Google filed a patent claim of its own against Microsoft and Nokia related to mobile computing, and it acquired Motorola Mobility for $12.5 billion to get its 17,000 patents.
One reason patents have gained prominence is the struggling economy -- companies cannot rely as heavily on sales revenue, so companies "are trying to find revenue streams other than just consumer purchases," said Mr. Helmsen. Holding the right patents, even if only for the usual 20-year lifetime, means holding back the competition.
The challenge for Google is that it is a comparative newcomer to the patent wars, although it has been trying to catch up.
In addition to its Motorola Mobility deal this year, Google also bought more than 1,000 patents from IBM.
But Google still lags behind the likes of Apple, which now has the force of the Samsung verdict behind any claims of patent infringement against rivals. Bloomberg News reported that Apple is now seeking a ban on eight models of Samsung smartphones, including the Galaxy S; late last week, a hearing was rescheduled for Dec. 6.
Mr. Helmsen said buying patents is not necessarily easier than creating an innovative idea yourself. Before buying a patent, he said, "you need to be patent savvy. You really have to understand what's there. You want to make sure the patents are useful," whereas your own design "is less costly to develop and you understand it better because you went through the entire design cycle."
Federal patent law underwent its first major reform in more than 50 years last fall when President Barack Obama signed the America Invents Act into law, which is expected to speed up the patent application process. The law now awards ownership of a patent to the first one to file, rather than to someone who claims to be the inventor.
While it is critical for competitors now to work around the Apple patents while developing their own products, it may be a matter of refining their work rather than starting over, he said. "It wouldn't make sense to start over from scratch with the design cycle time." He added, "I would be shocked if they hadn't already done that at the beginning of this lawsuit."
With patent infringement judgments now breaking the billion-dollar mark -- the Samsung verdict in San Jose, Calif., is the fourth-largest jury award in a patent case in U.S. history, according to Bloomberg -- the stakes are incredibly high.
"I don't know if Apple is going to dominate, but they are going to be a very strong player for a long time," said Mr. Helmsen. "Google will be hindered in the short term, but in the long term they'll be back, I'm sure."
On Friday, Reuters, quoting unnamed sources, reported that the CEOs for Apple and Google have been meeting to discuss "a range of intellectual property matters, including the mobile patent disputes between the companies."
First Published September 3, 2012 12:00 am