Apple this week, deciding that if you are in for a penny, you are in for a pound, added Samsung to the list of handset vendors that it is suing. Apple says that its Galaxy handsets and tablets infringe iPhone and iPad patents and their trademarked appearance. Why is Apple making a complaint against its biggest supplier, no less than the fabricator of it A4 chip? Perhaps it feels stung by the quaint idea that Samsung should remain loyal and not compete with its designs. But more likely it is completing a set ‘ without suing Samsung it can’t make a strong legal point against Android in general. This has the flavor of the suit Apple brought against Windows all those years ago and lost. Windows was indeed an operating system that copied many of the core design features of Apple’s environment, but was not similar enough to be a patent infringement.
The appearance and trademark claim actually made us laugh. 2011- A space Odyssey must have laid claim to a ‘shiny Black Obelisk,’ shape when it came out in 1968, which is the same as the iPad, and if you believe the Arthur C. Clarke story, that’s been around since before the dawn of man. Not to mention the look and feel of all the Tablet PCs that were launched 10 years ago.
As we have said a few times before, Multi-touch is a genuine innovation, but not all the other patents Apple lays claim to. And you can’t have a patent and refuse to let anyone use it so that you can dominate handsets forever, and you can’t do that while failing to pay a penny for the 175 or so patents you need to build a modern handset. In our view Apple’s position is doomed, but it shouldn’t affect it that much financially even if it caves in, it’s just that it cannot harm its rivals in the courts.
The US ITC staff also seem to agree with us because they have recommended that the ITC should find that Nokia and HTC do not infringe Apple patents. A lawyer at the ITC has made the recommendation, which is highly likely to be adopted by the full body when it reaches its final verdict in early August.
Apple has been seeking to block imports of both Nokia and HTC smartphones to the US, as part of broader legal battles with the Finnish giant, and a wider attack on the Android community – also involving Motorola and now Samsung. This case is only one of several versus Nokia. Adding Samsung to it at least makes the attack consistent, though not any more powerful.
The recommendation of staff lawyers are not binding, and the ITC could vote to ignore it, but it doesn’t happen for no reason and it would be extremely unusual for the final verdict to overturn it. Last month, the ITC ruled against Apple in a separate complaint against Nokia and in March an initial determination by the ITC says that Apple doesn’t owe Nokia any royalties either on 5 particular technologies.
It’s hard to see exactly what’s going on here, given that Apple may not pay royalties for key cellular technologies, but perhaps its component suppliers do, and that might be an issue for the ITC (though it hasn’t been in the past and other cellphone makers pay full royalties for all cellular patents).
Nokia immediately hauled out another 7 patents and lodged another complaint and presumably will keep doing this until it gets Apple where it wants it and there are already other suits in play, two in the US and three in Europe where Nokia alleges that Apple is not paying its dues to be in the handset vendor club.
The HTC ruling is particularly important because it is likely to have implications for the whole Android base. Apple claims the Taiwanese vendor infringes five patents that are vital for “seamless integration of hardware and software”. Some, related to signal processing and inter-process communications, date from the early 1990s and “were, at best, a very narrow distinction” from the inventions of others, HTC lawyer Robert Van Nest told the ITC judge. “HTC is a smartphone innovator and pioneer in the smartphone sphere. They were there long before Apple,” he said. “The fundamental differences from the Apple patents represent choices made by HTC and Google.”
One of the signal processing patents involved in the HTC suit is also cited in a complaint against Nokia, and this was spun off from the wider ITC suit against the Finn, which should be decided by June 24. Nokia lawyer Pat Flinn, of Alston & Bird, accused Apple of “dredging up patents” when it was approached for royalties by mobile pioneers like Ericsson and Nokia itself, according to Bloomberg. “Advances in technology have made the patent moot,” Flinn said of the signal processing IPR. HTC and Nokia have their own countersuits against Apple and HTC’s counterclaims will be heard from May 9.
Meanwhile, Samsung has responded to Apple’s patent lawsuit against its Galaxy product range. “Samsung will respond actively to this legal action taken against us through appropriate legal measures to protect our intellectual property,” was the official statement, but Korea’s Yonhap news agency quoted executives saying that, in fact, it was Apple which violated Samsung IPR. One commented: “Apple is one of our key buyers of semiconductors and display panels. However, we have no choice but to respond strongly this time.” In fact, Apple was Samsung’s second largest customer in 2010, accounting for 4% of its total revenue of $142 billion. Apple may have been trying to reduce its dependence on the firm, but it will not be able to avoid it, given the shortages of touchscreens and memory chips.
Won’t it be juicy if Samsung decides that it can’t continue to offer Apple some of those critical components like the A4 chip, designed by Apple, but designed on top of the Hummingbird Samsung chip work. Apple would be left high and dry and have to find fabrication elsewhere ‘ which we’re sure it could manage, but not without disruption in supplies that would open the market and put a black mark in Apple’s relationship with consumers.