Apple and Samsung are keeping the IP market busy – as well as entertained – as the handbags come out
Technology. Just the word must make an IP lawyer drool. Given that legal fees in patent fights have been known to reach $821 (£512) an hour – around eight iPhone 5s before lunch – it’s no wonder. But won’t tech giants get bored of the mud fights?
Apparently not. At the time of going to press Apple and Samsung had filed about 50 lawsuits in 10 different countries, and rumours were circulating that Samsung was planning to sue Apple over the iPhone 5’s fourth-generation (4G) capability, which Samsung’s Galaxy S III already has. “It’s a sad fact of life that whenever there’s a lot of money at stake litigation is always worth it,” comments one
IP partner. “Until Samsung and Apple settle their disputes everything the other brings out will be open for attack.”
No doubt some of those attacks were rather fun to fight. Magic circle firm Freshfields Bruckhaus Deringer, for example, was defeated for the second time in a week this summer after the High Court ruled that Samsung’s Galaxy tablets did not look “cool” enough to be mistaken for an Apple iPad. “They don’t have the same understated and extreme simplicity which is possessed by the Apple design,” said Judge Birss QC in his judgment. “They’re not as cool. The overall impression produced is different.”
But what exactly are these frenemies arguing about? “The problem is that Apple has put its eggs in the user-end design basket (such as the ‘slide-to-unlock’ function), while Samsung has invested in fundamental IP rights,” says an insider. “It’s led to both sides flailing around in a mudbath. The question in the end is whether you’re better off investing your money in essentials or focusing on the shinier, user end. At the moment, it’s hard to see.”
Patent litigation isn’t all about iPhones and Galaxy tablets. A recent study by Price-waterhouseCoopers shows that patent lawsuit filings in the US reached an all-time high in 2011, growing 22 per cent on 2010. Germany, too, recorded 500 patent litigation cases just in its Düsseldorf court last year. So why is everyone at it now? For many, patent litigation has been a way of securing more market share during the financial crisis.
“In crisis-buffeted times there can be more of a taste to pursue litigation, and in this crisis the cultural threshold for ‘do I go to court or not?’ has begun to change the mindset of previously conservative and gun-shy merchants,” said Richard Kreindler, a litigation partner at Shearman & Sterling’s Frankfurt office, of Germany’s booming IP market. “The notion of IP rights and internet-based consumer electronics have simply become too important not to stand up for patent and trademark protection, and on multiple fronts.”