In early 2008, shortly before the iPhone SDK launch, I met a gentleman with a very big mouth. He boasted obnoxiously for some time until someone mentioned buying an iPod touch. This guy subsequently warned the entire room not to buy, because new models were coming soon. He knew this, he said, because his job involved managing the flash memory supply for iPods and iPhones, and recent capacity orders suggested the model line was about to change.
He worked at Samsung.
It’s clear to me that over the last five years or so, Samsung has built not only a multibillion-dollar business, but a corporate culture around having Apple’s number. The partnership has had irreversible conscious and subconscious effects on the way Samsung’s product divisions think and do business. The proof is on the store shelves. It’s sickening.
But is it illegal?
That’s the question we must ask ourselves as Apple v. Samsung heads to the jury. The trial’s drama has distracted from what I see as its real long-term implications.
I must say I believe Samsung’s defense has been terribly flawed. Apple has argued that Samsung illegitimately profited off of Apple inventions. Rather than “We took inspiration, but here’s why that isn’t infringement,” Samsung’s rebuttal seems to have been “These are our own inventions.” I don’t see any reasonable jury believing that for a second, but depending on Judge Lucy Koh’s instructions, they may not hold it against Samsung either.
Samsung argued that Apple, which was struggling to keep up with demand for the iPhone 4 from July to October of 2010, did not have the capacity to have delivered on those additional sales. “Apple couldn’t service its own customers with the iPhone 4, but it could service customers it didn’t have?” Samsung attorney Bill Price asked…
This took my breath away. Here’s an opportunity to say “These people chose to buy Samsung instead of Apple. We are clearly bringing something to the table,” but instead, Price concedes “These people settled for Samsung because they couldn’t have found an iPhone anyway.” (Samsung may well know this for a fact because it’s supplying many of the components Apple needs to satisfy customer demand; see “having Apple’s number” above.) It was extremely shortsighted.
The stakes in this trial are enormous. If Samsung is vindicated, it will embolden competitors everywhere to aggressively mimic the iOS experience. That would be immeasurably bad (and familiar) news for Apple. If Apple wins, the damages check will be the least of Samsung’s problems, and Apple will itself be emboldened to further press its rights.
Most importantly, this case brings the ever-brewing controversy of software patents further into the spotlight. Apple’s case is far from patent trolling, but I do worry about the precedent it could set. If a verdict is reached, lawyers and judges across the country will surely look back to this case repeatedly during their own. In closing arguments, Apple attorney Harold McElhinny told the jury:
If you find for Apple in this case, you will have re-affirmed the American patent system.
Many people in the tech industry don’t see this as a good thing at all — so much so that one might think Samsung’s lawyers said it as an argument against finding for Apple. An Apple victory will surely inspire other far more cynical parties to beat down would-be competitors.
I must admit I’m uncomfortable with the idea that the world’s largest corporation, whatever its name, could be given such a big stick as early as this week. However the verdict falls, I feel like there are no winners here in the long term — certainly not us. Maybe that’s why Judge Koh has been begging for a settlement.