The details of this Patent war have become blurred to most but the sight of the 2 tech giant?s legal teams quibbling about minor details have become somewhat of a sideshow for those of us following it. However recent comments made by the presiding judge Lucy Koh has very sobering implications.
A Recap
- The high profile court case has seen bigwig executives from both sides giving testimony that gave insights into how both companies develop, market and sell their products. Among them:
- Apple considered making a car after the success of the iPod and realizing that they could make much more than computers and software
- The iPhone project was nicknames ?project Purple? and took 3 years to develop
- Apple?s products are designed at a kitchen table involving a group of designers sitting around a kitchen table and brainstorming various design aspects before turning the resulting sketches into 3D models using CAD software.
- 40 prototype designs for the iPhone including one with curved glass
- One of the design goals for the original iPhone was to make it as simple as possible and have a screen that looked like a “dark, oily pond” when switched off
- Apple pays $400/hour for an expert witness
- Apple has spent more than one billion dollars on marketing the iPhone and iPad. Prior to the end of fiscal 2011, spent $647 million on marketing the iPhone in the US alone, and $457 million on the iPad.
- Marketing research at Apple showed that 78% of users owned a case or bumper for their iPhone. This goes to show that form factor accounts for little among the majority of iPhone users.
More importantly this whole debacle could have been avoided. Apple had offered Samsung a licensing deal would have cost them $250 million in 2010, less than the amount Apple was paying Samsung for components at the time yet much less than the $2.5 billion Apple is now seeking.
According to the documents, Apple approached Samsung in October 2010 with this deal: Samsung would pay a base rate of $30 for each touchscreen phone sold and $40 per tablet. That price would drop to by $10 over two years.
Android, Windows Phone, Symbian and Bada would’ve been the phones included in the deal.
Figuring Samsung “should respond favorably,” Apple also proposed a royalty discount structure that used the Windows Mobile-based Blackjack II as an example.
The deal would’ve given Samsung an 80 percent discount overall, including a 20 percent cross-licensing agreement for Samsung’s patents.
Summary
Both Apple and Samsung have some very valid points. Should Samsung have accepted Apple?s offer, this entire expensive lawsuit would have been avoided.
Judge Lucy Koh has demonstrated to both parties that any further pursuit of this would be costly for both parties.
The plea from Koh is the second of its kind. Apple and Samsung attempted to work out their differences in a court-arranged meeting between the two CEOs in May, before the case began last month.
That meeting solved nothing and with the trial approaching a conclusion, Judge Lucy Koh wants to examine the possibility of finding a peaceful and amicable solution one last time.
Apple is seeking billions in Samsung?s revenue from what they deem as smartphone sales that copied Apple?s designs.
With well over 100 billion in cash reserves Apple is doing what they set out to do; spoil Samsung?s party. While the payout for Apple could be a paltry (in relation to their reserves) 2.5 billion, it would also secure a chunk of cash for every future Samsung phone sold. This would either dent Samsung?s profit or Increase the cost of its phones and affect sales.
Any which way I think what Apple is really is fulfilling Steve Jobs wish for making Samsung PAY for what copying Apple.
“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 thermonuclear war on this”
Steve Jobs
