Tuesday, August 28, 2012

Apple v. Samsung patent case has real implications for venture funding of future innovation


The recent jury-driven judgment against Samsung in a lawsuit by Apple is certainly going to raise questions about whether a “monopolistic” approach to patents will lead to reduction in innovation, as Electronic Frontier Foundation has often warned.

The center of the controversy seems to be the “push to zoom” finger-driven technology, very popular with users (and it amazes me how good young adults are with dexterity in texting while dancing in bars, as if companies could have predicted this – not good when driving, though). 

Craig Timberg and Hayley Tsukayama summarize all of this pretty well in a detailed story on the Aug. 28 Washington Post, “Post-pinch: what’s next for digital age?”, link here

The point is well taken. There are hundreds of hardware patents registered for smartphone technology.  But should an invention that changes a basic paradigm of use monopolize the field?  It would seem that if another company came up with another chip that could emulate the push-zoom experience, then it could get a separate patent.

The writers for Post note that Apple was the first company use encourage users to interact with a computer operating system graphically.  Microsoft more or less emulated the idea with Windows (the 3.1 version in the early 90s, followed by Windows 95), but did not run into insurmountable patent problems.
USA Today has reported that a South Korean court found that Samsung did not “copy” the iPhone (Thunderfeed here).

Apple is reported to be seeking to enjoin the sale of eight Samsung phones in the United States (Times of India story )

Consumers owning Sansungs now should not be affected (nor should warranties), but future orders might be, as could contracts for future purchase discounts.

A Business Day story by Claire Cain Miller and Brian X. Chen Aug. 28 in the New York Times discusses the possible affect on Google, and whether it could become a “target” of Apple litigation. Maybe not, because Google uses arrangements with  other companies for the hardware, and as a business strategy, litigation could backfire for Apple (link).

Litigiousness about patents could certainly affect the ability of future start-ups to attract venture capital (see movies blog today).  Let the politicians debate this at their conventions.   




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