The jury has spoken, awarding Apple some $1.05 billion in damages from Samsung for infringing on its utility and design patents covering the iPhone and the iPad. Although the trial is not over — Judge Koh could decide to throw out some or all of the jury’s decision, and of course Samsung will appeal the decision in a process that could take years — the verdict represents a substantial victory for Apple and its claims that Samsung’s mobile phones and tablets copied key elements of Apple’s flagship products.
Apple’s late co-founder Steve Jobs famously decried Android as a “stolen product,” and although Apple’s suit was specifically against Samsung, in some ways the South Korean company served as stand-in for the entire Android ecosystem, representing not just fellow phone makers like HTC, Asus, LG, and Sony, but also Google itself.
The jury’s decision doesn’t mean Apple has killed Android, nor does it mean Android devices are suddenly going to disappear from store shelves. However, Android device makers are going to have to think carefully about their products going forward — and Samsung is probably going to suffer a setback in the U.S. market.
Will Samsung’s Android phones disappear from the market?
Maybe some of them. Assuming the California jury’s decision of favor of Apple stands, Apple’s next logical move will be to seek import bans on Samsung devices that the jury has found to be violating its patents. That’s a lot of products — including the Galaxy S and Galaxy S II smartphones offered by a variety of U.S. carriers. However, it does not affect all Samsung phones and tablets: For instance, the recently-introduced Galaxy S III smartphone is not impacted by the decision, and the jury actually ruled Samsung’s tablets didn’t copy the iPad’s trade dress.
Bottom line: Several of Samsung’s budget-oriented Android phones and older flagship devices may eventually disappear from the market. The silver lining for Samsung is that many of those devices are nearing the end of their lifespans, or aren’t designed to be for sale very long. (Certainly none have a lifespan like Apple’s iPhone 3GS, released more than three years ago and still available today.) Samsung will fight Apple on import bans, and may succeed in keeping devices on the market or at least creating a delay. But — for now — Samsung’s current flagship smartphone and tablet products will remain on sale, and you can bet Samsung’s future smartphones and tablets will be increasingly divergent from Apple’s.
Samsung isn’t the only party that can file an appeal. Apple is almost certain to challenge the jury’s decision that the iPad’s trade dress wasn’t protectable. However, even if Apple wins, potentially infringing Samsung tablets like the Galaxy Tab 10.1 will have been off the market for a long time. Samsung may still find itself on the hook for more damages.
Apple is separately seeking a ban on the Samsung Galaxy Nexus over its unified search feature; however, that case should not be impacted by today’s jury decision.
Will other Android devices be banned?
Probably not, although the ramifications of the Apple-Samsung case are less clear for companies like HTC, LG, Sony, Asus, and Google/Motorola that also make Android devices.
Several of Apple’s complaints against Samsung have to do with the appearance of physical products and onscreen icons. So far, Samsung is the only device maker Apple has accused of copying the trade dress and onscreen icons of the iPhone. Although plenty of Android devices bear a resemblance to the iPhone or iPad, so far other device makers seem to be in the clear as far as the design of their physical devices and their on-screen icons. (Indeed, HTC’s Sense UI and stock Android icons have always been quite a bit different from Apple’s iOS icons.)
Other Android device makers may face more difficulties on the software side. Samsung (and others) are sure to claim Apple’s patents covering interface techniques like pinch-to-zoom and one-finger scrolling are invalid (Samsung itself took a pretty strong shot at the bounce-back patent), but it might be moot. As the global confrontation between Apple and Samsung has become more and more heated in the last year and a half, many device makers have already shifted away from things like the bounce-back behavior. It’s safe to say Android device makers will now now start moving away from tap-to-zoom and other scrolling behaviors covered by the patents Apple asserted against Samsung. After all, Apple has already persuaded one jury those patents are strong: Who’s going to roll the dice against Apple and hope they’ll do better?
Apple has already had some success forcing phone makers to redesign around its patents. Apple is currently suing HTC for violating software patents — and managed to get a ruling from the U.S. International Trade Commission barring importation of phones that can detect and act on data items like phone numbers in otherwise unformatted content. (That’s the ruling that delayed the arrival of the HTC One X and Evo 4G LTE back in May.) HTC had to design around the patent to avoid the import ban.
Between the HTC import ban and the jury verdict against Samsung, Apple can be expected to hold Android device makers’ feet to the fire. Bottom line: Expect Android device makers to quickly rework their devices to avoid behaviors that could be covered by Apple’s patents.
Who will cut a deal with Apple?
It’s one thing for Android device makers to alter their devices and software after one of their brethren has been found guilty of patent infringement. But that doesn’t make up for past infringement and the flurries of patent infringement lawsuits and requests for import bans that have already been filed.
With the Samsung victory under its belt, Apple is unlikely to let bygones be bygones. Apple is now in a strong position to go to Android device makers and offer them a choice between stepping into Samsung’s shoes in a courtroom trial… or working out a licensing deal. During the Samsung trial, Apple revealed that it had offered to license its crucial patents to Samsung for $30 per smartphone and $40 per tablet. Samsung said no, and now it looks like it’s going to have to pay Apple a billion dollars. Other Android device makers may agree to license Apple’s patents just to avoid litigation.
That scenario would significantly tarnish Android. Most Android device makers are already paying a per-device royalty to Microsoft to protect them from the possibility of patent litigation, making the “free and open” operating system something less than free. (Financial terms aren’t available, but many estimates have Microsoft receiving about $5 for every Android device.) If Android device makers have to pay per-device royalties to Apple — especially anything in the range of $30 per phone or $40 per tablet — Android’s claims of being “free” amount to nothing. In fact, Android would be a bigger revenue generator for Apple and Microsoft than it is for Google.
The onus falls to Google to protect its ecosystem. So far, Google has indicated it’s willing to go to bat for Android — after all, shoring up Android’s patent position was a lot of what Google’s $12.5 billion acquisition of Motorola was all about. In fact, Google’s Motorola division just filed suit to block imports of iPhones, iPads, and Macs, claiming the devices infringe on seven Motorola patents. But Google’s patent benefit from Motorola doesn’t seem to be as strong as it first appeared — and now Apple has a major court victory under its belt.
Google will now be under pressure to cut a patent licensing deal with Apple that not only protects Motorola devices from infringement suits from Apple, but covers all Android device makers. The main reason Google might be willing to make that kind of deal would be to prevent Apple from hobbling the Android ecosystem with a divide-and-conquer approach. If Apple goes to every Android device maker and demands exorbitant royalties — like $30 per phone or $40 per tablet — what are some of those device makers likely to do?
- They might pay up, which would drive up the cost of Android devices with what amounts to an “Apple tax.”
- They might choose to fight Apple in court, perhaps with financial backing from Google.
- Or they might abandon Android, probably for something like Windows Phone.
Scenarios one and three would both be very bad for Google. And, as Apple just proved with Samsung, number two looks like a longshot.
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