Wednesday, May 21, 2014

Who won the smartphone patent wars?

With the Apple v. Samsung cases in settlement talks, the Apple v. Google cases dropped, Nokia dead, and upcoming anti-patent troll legislation in the works, is the worst of the smartphone patent wars over?

Microsoft's still making licensing deals with Android manufacturers. But it's not really a war. It doesn't make headlines and we don't hear about lawsuits of epic proportions and ferocity.

If the smartphone patent wars are ending, who won? Certainly not Nokia, who pulled the trigger. Did Apple?

According to Steve Job's biography, he once said:

Our lawsuit is saying, "Google, you fucking ripped off the iPhone, wholesale ripped us off." Grand theft. I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I'm going to destroy Android, because it’s a stolen product. I’m willing to go to thermonuclear war on this. They are scared to death, because they know they are guilty.

Despite an aggressive Apple, Android is still very much alive, with growing market share, currently at 80%. And before we look at the damages Apple won from Samsung, we must put them into context. In the words of Samsung:

Apple has nothing to show for its years of litigation and hundreds of millions of dollars spent on attorneys' fees.

After accounting for litigation costs, the damages paid by Samsung are relatively insignificant. Even before accounting for litigation costs, in the words of one court room spectator:

Apple just won six hours of revenue.

This is hardly surprising. I quoted a prominent blogger Tero Kuittinen in a previous blog post who wrote that litigation "will never have any substantial impact on the competitive landscape in the phone industry" and that it only benefits IP lawyers.

As Alison Frankel writes:

It has taken five years and untold tens of millions of dollars in legal fees to confirm that competition over high-tech products that make use of hundreds of patents will not — and should not — be decided by the courts. Despite Steve Jobs’ famous description of Android as "a stolen product" that he would destroy through "thermonuclear war," it simply doesn’t make business sense to throw money into a litigation bonfire that will leave you with nothing more than a handful of cold ashes.

I've said this before, but the settlement between Apple and Google makes it manifestly clear: No one won the smartphone patent wars.

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