Aug 28, 2012

Samsung verdict - Why it is no big deal

The web is full of alarmist and doomsday predictions about the impact of the verdict. Yes, it is a setback, no doubt. But this is not end of the world for Samsung. And we are not talking about '$1 billion? It is 2% of their monthly sales' sort of financial justifications here...

Let us look at them..

The American market is big, but no longer that big

There was a time when Americans checking tyre pressure could save more gas than is consumed in all of China. Not any more.

And it is getting less relevant almost on a daily basis...China is already the biggest smartphone market and brands like Meizu and Lenovo, who dont sell much, if any, in the US are raking in big dollars selling feature laden smart phones that rival the Iphone ...for a substantial discount. Guess what operating system they run on? Android. To a lesser extent, South East Asia, India and other large markets are also huge markets for smart phones and growing at rates a mature market like USA can never match.

The lawsuit only affects phones already obsolete or nearly so

Bit like Toyota forced to stop selling the 2009 Camry.

Samsung's own flag ship S3 as well as newer versions are not affected. At least not by this lawsuit. And Samsung may have been stupid in the past, but they surely would have learnt a lesson, however wrong the lesson is from a moral or legal standpoint.

So all this talk of huge gains for Nokia and Microsoft are complete nonsense. No one is going to visit a phone shop, find no Samsung models and hence end up buying Nokia.

Google is least bothered - just read their press release.

They just survived a far bigger danger - Oracle trying to attack the very core of Android. Compared to that the Samsung case is (even those that go into phone features and not design) about peripheral features that not many will miss even if completely taken out and not just replaced with non-offending versions. Who cares if the icons bounce or they don't?

Android is bigger than smart phones and it is growing..

Remember the old Sun slogan? Java Everywhere..that went nowhere. Well, Google has done it. With Android. There are big global players releasing all sorts of stuff running Android - from motor vehicle dashboards to refrigerators and cameras to even small satellites!

And none of that is going to run Windows or IOS ever! And these companies are not stupid, they have lawyers too and know how to do due diligence.

Time is on Android's side

Remember everyone used to say that 'Apple computers are so easy, my grandmother can use it. Not like Windows'. Well, with all that M$ beat up Apple in the marketplace and drove their stock down to $9. Jobs got fired. And Windows did catch up on features and ease of use and became pervasive.

Same thing may yet happen again. Android is fast closing the gap and is even leapfrogging. There is hardly any popular application left that runs only on IOS. More importantly, Google has no existing fat holy cows to protect. Apple and Microsoft do. For every cheap tablet sold, Microsoft loses a higher value Windows (plus Office which is even more profitable) sales opportunity. With every cheaper 7" tablet sold, Apple loses killer margins on its larger IPAD. But it may be forced to do the same, simply to protect market share and mind share. 

Perhaps that common fear and loathing explains the unusual Apple - Microsoft deal to share IP even though Jobs had said his IP is for Apple to exploit, not to lease out to others.

To be continued..

Samsung verdict - Justice or a Mockingbird killed?

That the US patent system is broken and badly needs a fix hardly needs repetition. Dubious patents seem to be the rule not exception. You don't even have to be a respected judge and scholar like Justice Posner to know it. When two clever Indians wanted to "patent" the medical properties of turmeric, known to grandmothers in India for thousands of years, they went to the most advanced country in the world to do so. It took years of costly battles to get that overturned. But don't be surprised if some manages to patent yet another well known grandma's recipe, perhaps the humble neem or Indian gooseberry.

If you are an eternal optimist you can see this as another case of bureaucratic bungling or if you are conspiracy theorist you can think of this as a clever plan to help American companies. Conspiracy theorists would no doubt see the Apple vs Samsung verdict as evidence confirming their worst suspicions.

Delivering a slam-bang-thankyou-mam verdict in three days flat on a complex case where just reading the instructions and filling out the verdict form diligently should have taken that long, if not longer, the jury has raised serious doubts about its job. It is little wonder that ridiculous totalling and other errors were made. The jurors even confessed they had made up their mind on Day one itself, even before Samsung said anything, and had not bothered to read the instructions. A weird side effect of the jury's botched job is that Apple lost that one aspect of the case where its pre-trial chances were strongest, based on injunctions granted - the one against Galaxy Tab. If Judge Koh reverses that ruling she must pretty much acknowledge that this jury has been incompetent or in a tearing hurry to get it over with and go home, having made up its mind even before evidence was presented. If she doesn't  it would then put a question mark over her the wisdom of her own enthusiastic eagerness to ban the tab even before the trial was held because it was 'substantially similar'.

As if all these are not enough, the jury foreman also bragged that they 'punished' Samsung, which is completely nonsensical and against common sense as well as what they jury were told - to compensate Apple for lost profits (if any) and not 'punish'.

In so many ways, this jury is not that different from the 'mockingbird' jury.

No wonder words like unfair, biased and all sorts of other allegations are being thrown around.

Perhaps Samsung's attorney was predicting the future when he blurted out the honest but injudicious truth - 'why even have a trial' when he was barred from presenting prior art evidence because it was 'late'.

But it is never too late. There will be appeals where it is not a jury but judges that will hear the case. Hopefully the American legal and justice system will come out smelling a little bit better at the end of the process. Or will it still be held hostage by nonsensical patents and $1,200 an hour lawyers and $100 Billion companies and their paid shills that abuse it for their commercial benefits?

Time will tell..

Aug 17, 2012

Samsung vs Apple vs Samsung - What next?

 If my own servant could not believe my innocence, how could I hope to make it good before twelve foolish tradesmen in a jury-box? - Quote from the "Sign of Four" a Sherlock Holmes tale by Arthur Conan Doyle

Geeks and non-geeks alike showed a lot of interest in this particular lawsuit.  It has been fun watching all the legal fireworks. Just as it happened with the Oracle vs Google trial, we are at a critical phase.

What will happen?

Predicting outcome in such cases, involving jury trial, even with complete knowledge of facts and law is a dangerous game. Anything can happen. We can only weigh the various possible outcomes, given what we have seen reported in the media, and put some rough guestimates to them.

1. CEOs will meet, talk and settle

While chances are low, this can still happen. Apple may decide it is not going to get much by way of leverage , at best a few millions, which is pocket change anyway. Samsung may realise too that fighting lawsuits in an alien country where they have to fly in Korean speaking staff who need translators and so forth is not really easy.

If they do settle, it will be to preserve their overall relationship which is worth a lot more than what this trial is about. While both can find other partners, costs go up when you rule out one big player and mark him as an enemy.

Probability - less than 2 in 10.

2. Apple wins, big, gets the entire $2.5b it wanted

Apple getting a large financial settlement and/or an injunction against CURRENT and POPULAR models, not ones that are anyway dead or outdated is surely one possible outcome. But the most recent and popular models are not even part of this lawsuit. And in any case, Samsung will learn and has probably already learnt the lesson and remove offending features, like others did.

That only leaves money on the table - chances of Apple getting the $2.5b it asked for are about as much as Oracle getting the $6b it wanted against Google - zilch. Because it is inevitable that Apple's team would have painted the numbers and the judge will trim it down. Even that reduced number will be apportioned towards offending aspects. A few hundred millions, enough to embarrass but not kill Samsung, is probably what you can expect.

And we are not even talking about appeals here.

Probability - less than 2 in 10

3. Samsung wins, big, along the lines of Google in the Oracle trial, pays nothing

Samsung has thrown a few spanner in the works - prior arts claims, which appear extremely credible, tablet designs that pre-date IPAD launch, dramatic testimony by the Korean designer who missed feeding her baby because she was too busy designing phones..any female juror balancing her career with domestic life will surely nod her head in understanding.

When the whole thing is listed down and debits and credits are tallied and reconciled by jurors, who are by no means patent experts or tech gurus, I suspect there will be one or two jurors who will either rebel or force moderation of any verdict.

Remember, it has to be unanimous - or nothing.

Probability - 5 out of 10

4. Apple wins, but not a huge victory. Life goes on.

Apple has a few smoking guns - the superficial similarity of the phones with Apple's models (assuming prior art defence collapses), emails from Google and so forth. I seriously don't think so called smoking guns about Samsung's internal comparisons will matter because firms do that all the time. That is brainstorming, benchmarking and rallying the troops.

Samsung's defence has been fairly strong too. See (3) above. They are known in the states as a strong tech company that designs great products - LCD TVs, monitors and so forth. No reasonable judge will treat Samsung the way a Chinese copycat will be treated. Although that is the impression Apple seeks to leave in the marketplace.

So it is entirely possible that jury will grant a theoretical victory to Apple but in the damages phase, when all things are considered, the judge will give Apple much less than what it wanted. And we all know how greedy Apple has been.

And in any appeal, Samsung will most likely get to present the F700 model it was not allowed to present in this trial because it was too late. That will surely boost its case. It looks a lot like IPHONE before IPHONE was launched.

Probability - 6 out of 10

Let us wait for the result...

Aug 5, 2012

Samsung vs Apple: America on trial?

When it comes to being 'investor friendly', 'transparent', 'fair to foreign investors' etc., it would seem that it is only the non-western nations that have to bend over backwards and do things that please the 'foreign investor' even as western nations, United States in particular, erect barrier after barrier that protects their businesses and companies and tilt scales in their favour without having to explain. On the contrary others are supposed 'understand and respect' their legal systems.

The lawyer infested, highly litigious American legal system, has already attracted a lot of negative press, even within USA. In the context of the high-tech business, patent trolls, abusive industry titans and their destructive lawsuits have attracted a lot of negative publicity and several legislators and very respected judges have taken up the case for patent reform before too much damage is done.

While Apple may not be a troll with no other business as with many other full-time trolls, many see the present dispute with Samsung as a simple case of Apple bullying Samsung by throwing money around, trying to patent anything that is 'rectangular and has glass screen'.

The American justice system is no doubt capable of delivering justice, at least in a vast majority of cases subject only to the usual human failings, and is perhaps one of the best that is out there despite all ills caused by sleaze-bag lawyers and greedy trolls. But, just as people were watching carefully lawsuits against Korean majors in Korea itself, when they are pitted against MNCs, no doubt many people are watching this particular case to see if the system can not only be fair, but also seen to be fair.

If you recall, when Samsung was fighting lawsuits in Korea itself, the usual nonsense about bias, 'investor confidence in legal system' and innuendo of that sort were thrown about by many 'independent' analysts.

Strangely the coverage in US media has been largely anti-Samsung, a lot of it propaganda fed by vested interests. If you just read western media, you may be forgiven for thinking that Samsung does nothing but copy, has no original technology and Apple is as pure as fresh snow. Anyone that has watched the tech space will know that is nonsense.

Disturbing signs are also emerging on other aspects of the case

  • While Apple is allowed to go town and shout aloud about copying, piracy and all sorts of unproven allegations, issue press releases and spread FUD by the minute, allegations that any juror can lay his hands on with a lot more ease, when Samsung presents evidence, that too stuff already in the public domain, it is seen as trying to influence jury!
  • Some reports already talk about 'home advantage' for Apple because the jury are largely from Apple's base where it obviously is a large employer and means a lot to local economy. 

The American justice system is also on trial, will it deliver? Will it be seen as doing so? Or is it not a level playing field?

Time will tell.