To litigate or not to litigate… Apple vs Samsung

On 27 June, Judge Lucy Koh of the US District Court in Northern California ended an enthralling and expensive litigation saga between Apple and Samsung. In less than a page, the Order for Dismissal validates a private settlement between the parties, on undisclosed terms, of the smartphone litigation.

Samsung appeared to have fared the worst in the litigation on a monetary basis when damages awards and legal costs are accounted for. A billion dollar award was made at one point and around $400 million dollars has been paid.

The question for this observer is: was it worth it? And does the litigation saga demonstrate a commercial approach to the business issues in the case?  Over a hundred years ago, a British jurist, Lord Esher, likened patent litigation to a tragic bout of influenza that could destroy a family and cause financial ruin. Surely something to be avoided!

On the other hand, patent litigation – on important and clearly valuable communications technology – has a definite role in business strategy. The 19th century was a time of individual inventors, aiming to build businesses that would power the industrial revolution.  And they did – names like Edison and Bell come to mind.

But 21st century innovation is often the arena of corporate behemoths fighting for market share.  So it was here.  When the litigation started, smartphones were pioneering products and the first iPhone was a massively important product.  Inevitably, another key player – here Samsung – was going to attack the market and create customer choice.  It did just that and Samsung products quickly achieved sound market share.  Apple needed to react to that. It did.  The litigation made sense at the time.

But now it doesn’t. Samsung is still here and its products continue to enjoy popularity.  Apple’s success has also endured with further products entering the market.  It makes sense to get on with life and end the litigation with no financial ruin and no viral tragedies.

(disclaimer: the writer uses a Samsung Galaxy smartphone)