Wednesday, 8th August, 2012

It’s war between Apple and Samsung

Over the last couple of years Apple and Samsung have engaged in what commentators have labelled a tablet war, a feud, and a battle.

In reality the two parties are involved in a regular commercial dispute. I think the high profile of the dispute can be attributed to two things. One is that the object of the dispute involves well-known consumer devices. Another is that there are intellectual property rights involved about which everyone seems to have an opinion.

So far we have seen litigation in the United States, Germany, the Netherlands, Australia, the United Kingdom, France, Italy, Japan and South Korea. The exact nature of the litigation in each country depends on the intellectual property rights secured by the parties in those countries and the extent to which those intellectual property rights can be enforced.

Trade dress

In some jurisdictions we have seen Apple take action against Samsung for what is known as trade dress infringement, unfair competition and/or consumer protection law. Apple is saying that consumers are going to buy a Samsung product thinking they are buying an Apple product due to the way Samsung is manufacturing and packaging its Galaxy Tab product.

My impression is that Apple is not doing too well with this cause of action. I could understand it if the product was a can of dog food or a tube of toothpaste. A customer in a hurry may pick up the wrong product off the shelf. However I would like to think that a consumer dropping several hundred dollars on a tablet device would at least stop to look at the packaging.

Design patents

In some jurisdictions we have seen Apple secure registered rights for the appearance of its iPad product. These types of registered rights are called registered designs or design patents. Apple is alleging that Samsung's Galaxy Tab product infringes some of these design rights.

The problem here is that the iPad isn't that distinctive looking. Turn off the device and all you have is a rectangular glass plated hunk of metal. In Germany for example Samsung has re-engineered its product so that the glass front does not extend to the side edges. It now looks slightly different and is, according to Samsung, no longer covered by Apple's design rights.

Utility patents

Samsung is calling out Apple in some jurisdictions. It is saying that Apple infringes some of its patents relating to mobile communications and wireless communications. These patents are said to be essential for implementing European mobile telephony standards.

This hasn't gone too well for Samsung, with a European anti-trust investigation underway against the company. The issue here is whether Samsung's attempts to enforce these 3G related patents violate an agreement it made with the European Telecommunications Standards Institute (ETSI) to licence the patents to other companies on fair, reasonable and non-discriminatory terms.

Perhaps the most promising cause of action for Apple involves a whole bunch of patents it owns relating to touch screen technology and user interfaces. Apple's patents are not essential to operate the tablet device. Many of the patented inventions contribute to an enhanced user experience. It has asserted these against Samsung in many of the jurisdictions in which it has acquired them.

Samsung will be arguing that it doesn't infringe the patents and that the patents are invalid anyway. Samsung will argue that the claims of the patents are not new, that they are obvious, and/or that they cover subject matter that shouldn't be patentable in the first place.

The New Zealand perspective

The commercial dispute between Apple and Samsung is unlikely to have a significant effect on research and development undertaken by New Zealand companies. New Zealand's small market size means that any given electronics/ICT patent in the United States will have only a 1 in 100 chance of also being applied for in New Zealand.

The litigation in Australia on patentable subject matter will be interesting from a New Zealand perspective. Patent infringement lawsuits involving computer-implemented inventions are unheard of here, so we tend to look to Australia for guidance on subject matter eligibility.

New Zealand businesses will continue to commence and grow to a useful size. When an individual business is ready to export it may review the intellectual property landscape on a market-by-market basis to assess freedom to operate. If it becomes a truly global business it will assess freedom to operate in the intended markets as part of its research and development programme.

The Apple-Samsung dispute has been a fascinating one to follow. However it ends up, I think it shows a healthy level of competition and strategic use of intellectual property rights within a competitive consumer device market.