Who Cares About Apple vs. Samsung? You Should

The sensationalists are calling Apple vs. Samsung “the patent trial of the century.” The trial, which began July 30 in Silicon Valley, is the result of a suit filed by Apple in April 2011, accusing Samsung of infringing on patents related to the iPhone and iPad. Samsung counter-sued, saying Apple infringed on its own patents. Now it’s up to a jury and judge to figure it all out.

Together, Apple and Samsung sell over 50 percent of the world’s smartphones, so it’s easy to dismiss this case as two tech giants fighting for market share. But everyone who does business in the technology world has a stake in the outcome.

“Immense Collateral Damage”

In a commentary for InformationWeek, Patrick Houston writes that Apple and Samsung are “propagating an intellectual property war with immense collateral damage.” Houston, a principal at consulting firm Media Architechs and a former GM at Yahoo!, explains exactly why a patent war over intellectual property could be debilitating:

Its direct costs are sapping promising young companies and R&D budgets. It’s frustrating the forces of innovation that are vital to economic renewal. And if that’s not enough, it’s also consolidating more power in the hands of a few companies already uncomfortably close to market domination in mobile – namely Apple and Google, with Microsoft and Amazon not far behind.

The fact that Houston mentions Google is relevant. While this case pits Apple against Samsung, Google is an indirect target because of its Android operating system, which is used by Samsung. Apple has already sparred with Google in a patent dispute with Motorola, which is now owned by Google. On June 22, however, a federal judge dismissed that case, indicating that neither party could present “compelling proof of damages.”

A Broken Patent System

The larger underlying issue related to the Apple-Samsung case, to which Patrick Houston refers, is the U.S. patent system. Houston points out that patent law is particularly dicey when it comes to software. “It doesn’t help that more than 200,000 software patents alone have been filed since the 1990s,” writes Houston. “If you want to do the right thing by creating an e-commerce product that doesn’t infringe on someone else’s claim, you may have to slog through as many as 5,000 possibly related patents. Want to advertise, charge or ship your product? Prepare to sift through more than double that many. No wonder so many companies have become innocent violators.”

With this reality in mind, the impact of an out-of-control patent system on smaller companies could be crushing. What does it mean for business going forward if everyone is afraid to innovate because another company has a bigger portfolio of patents? How does any new innovative idea created by a smaller company survive in a marketplace where patent protection is only available to those with the deepest pockets?

There’s another insidious game going on: Large companies buy up patents for ideas that may never turn into marketable products, just so they can keep a lock on a particular marketplace. This is akin to the market-restricting practice of those buyers who grab attractive domain names with no intention of using them – they just want to sell them to the highest bidder. It doesn’t sound equitable, but in the name of free market commerce, that’s the way it is.

Will the Next Facebook Ever See the Light of Day?

Sadly, at the present time, the patent system specifically and intellectual property law in general seems rigged in favor of the big guys (what else is new?). Given the way patents work, the largest companies can apparently obtain them, sit on them, and defend them at will. Litigation has become a marketing tactic.

There will always be new ideas generated by companies large and small. But adaptation and the melding together of ideas are cornerstones of modern technology. Preventing that practice impedes innovation, yet “unique” ideas need to be protected somehow.

For ideas like Facebook or Twitter or Pinterest to be viable in the marketplace, they should be unencumbered by vague opposing patents owned by companies who want nothing more than to squash anything that even resembles a competitive product. In the long run, reducing competition hurts everyone – well, maybe everyone except the companies who utterly dominate a market. And that’s why Apple vs. Samsung really matters.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

3 Responses to Who Cares About Apple vs. Samsung? You Should

  1. Gary says:

    I am rooting for Apple. I have iPhones, iPads, and Macs :]

  2. Aditi Datta says:

    Hey Barry,
    I really like reading your post. Yes, this is true that Apple and Samsung sell the highest number of smart phones. I like the Broken patent system that you have highlighted in your post. Thanks for the share!!

  3. The patent system allows for monopoly – the way it is explained in the article implies that companies who can afford to buy patents can keep competitors and innovators out of the picture.