Analysis: Apple looks to press home its advantage

By Sooraj Shah
17 Sep 2012 View Comments
Apple iPhone fighting Samsung Galaxy SIII

When the jury in San Jose, California, returned to deliver its judgment in the intellectual property infringement case between Apple and Samsung, it wasn’t just the public and the press that were taken by surprise.

Further reading

After taking just two-and-a-half days to consider some 700 questions, the nine jurors delivered a surprisingly emphatic verdict – and awarded $1.05bn (£665m) in damages – in Apple’s favour. Six out of seven of Apple’s patent infringement claims against Samsung were upheld, while all of Samsung’s counter-claims were rejected.

So quickly did the jury rattle through their decision-making that even some of the lawyers involved in the case had to rush to court ill-attired in order to hear the verdict.

Apple wasted no time filing for an injunction against a number of Samsung products – later adding the flagship Galaxy S III, launched only in April – in a bid to banish Samsung’s Android devices from American shores.

Samsung will no doubt seek first to have the verdict overturned on a technicality – the head juror has provided plenty of ammunition for such an attempt – and, failing that, it will follow up with an appeal.

Monopoly control

If upheld, the question is whether Apple will attempt to turn its emphatic victory into tighter control of the mobile phone market. Documents that emerged during the case indicated that Apple has tried in the past to persuade device makers to take out licences if they wanted to avoid an expensive trip to court.

Apple’s licensing scheme envisaged payments of up to $30 (£18.73) per device, even on “feature phones” that in no way encroach on Apple’s patents. Apple’s court victory will lend weight to such efforts, helping patent-laden industry giants to carve up the market between them, while keeping out rivals that cannot afford to pay their fees.

For example, Apple and Microsoft already have a “Nazi-Soviet”-style cross-licensing pact that effectively exempts each from having to pay the other for licences to use their respective intellectual property. A newcomer, though, might be forced to pay for licences from both companies, putting it at a double cost disadvantage.

Right now, though, Samsung is Apple’s number one rival device maker – both in the US and internationally. And standing behind Samsung, of course, is Google.

Regardless of the hype around Apple, the market share for its iOS products has fallen further and further behind Google’s Android open-source smartphone operating system.

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