The daft world of patents

Below is an extract from the Wikipedia entry “Apple Inc. v. Samsung Electronics Co., Ltd.

Behold the convoluted mess…

U.S. courts

Apple accused Samsung of infringing on three utility patents (United States Patent Nos. 7,469,381, 7,844,915, and 7,864,163). Apple also accused Samsung of infringing four design patents (United States Patent Nos. D504,889, D593,087, D618,677, and D604,305). Samsung accused Apple of infringing on United States Patent Nos. 7,675,941, 7,447,516, 7,698,711, 7,577,460, and 7,456,893.[39] One 2005 design patent “at the heart of the dispute is Design Patent 504,889″,[40] which consists of a one-sentence claim about the ornamental design of an electronic device, accompanied by nine figures depicting a thin rectangular cuboid with rounded corners.[41] The injunction Apple sought in the U.S. to block Samsung smartphones such as the Infuse 4G and the Droid Charge was denied. Judge Lucy H. Koh ruled that Apple’s claims of irreparable harm had little merit because although Apple established a likelihood of success at trial on the merits of its claim that Samsung infringed one of its tablet patents, Apple had not shown that it could overcome Samsung’s challenges to the patent’s validity.[42][43][44] However, in June 2012, Judge Koh granted Apple’s motion for a preliminary injunction as to Samsung’s Galaxy Nexus, and thus enjoined Samsung from making, using, offering to sell, selling, or importing into the U.S. the Nexus and any other of its technology making use of the disputed patent.[45] Simultaneously, Apple was ordered to post a $95.6 million dollar bond in the event that Samsung prevailed at trial.[45] A U.S. jury trial was scheduled for July 30, 2012[2] and calendered by the court through September 7, 2012. Both Phil Schiller and Scott Forstall testified on the Apple v. Samsung trial.[46][47]

On August 24, 2012 the jury returned a verdict largely favorable to Apple. It found that Samsung had willfully infringed on Apple’s design and utility patents and had also diluted Apple’s trade dresses related to the iPhone. The jury awarded Apple $1.049 billion in damages and Samsung zero damages in its counter suit.[48] Design Patent 504,889 was one of the few patents the jury concluded Samsung had not infringed.[49] However, Groklaw reported that the jury in the case had awarded inconsistent damages and ignored the instructions given to them whilst pursuing the case. [50]

Impact

Within the context of these patent wars, Google accused Apple, Oracle and Microsoft of trying to destroy the market for Android devices through patent litigation, rather than by innovating and competing with better products and services.[51] As part of a defensive measure to protect Android, in August 2011 Google started the process of purchasing Motorola Mobility and its 17,000 cellular patents for $12.5 billion.[52] Following the U.S. court ruling, it sued Apple for infringement of Motorola’s patents that it had acquired.[citation needed]

Is this capitalism?  I think not.

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About Russell Lamberti

Russell Lamberti is a regular contributor to Mises SA. He is Chief Strategist at ETM Analytics, an Austrian-influenced economic research firm based in Johannesburg. Although he wrties about many topics, you'll most often find him slaying patent and copyright law and exposing the biggest bubble in history: fractional reserve banking.
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