Apple may hurt shareholders with Android patent war or something

14 years ago

“Steve Jobs, the co-founder of Apple Inc., told his biographer that he’d rather wage ‘thermonuclear war’ with Google Inc. than make deals to share its technology with the maker of the Android operating system,” Peter Burrows reports for Bloomberg.

“That was no empty threat. In the 18 months before Jobs died on Oct. 5, Apple sued HTC Corp., Samsung Electronics Co. and Motorola Mobility Inc., the three largest Android users,”
Burrows reports. “It alleged that the phone makers stole Apple’s technology and asked courts to make them stop.”

Burrows reports, “Now, as rulings start coming in, it might be time for a détente that helps Apple maximize the value of its patents, said Kevin Rivette, a managing partner at 3LP Advisors LLC, a firm that advises on intellectual property. When courts side with Apple and impose bans on infringing products, competitors can often devise workarounds; in cases where Apple doesn’t win import restrictions, it would be better off striking settlements that ensure access to a competitor’s innovation, he said.”

MacDailyNews Take: Let’s pause to fill in what Burrows conveniently left out: Jobs vowed “thermonuclear war” against Google because he viewed Android as “a stolen product,” not because he relished patent wars over making “deals to share its technology.” Apple is a vertical integrator; they control the whole widget for the end users’ benefit. They don’t license iOS or “share” patented inventions for a reason. Burrow’s mischaracterization of Steve Jobs’ reason for protecting Apple’s patented IP is either intentional or simply sloppy. We’d bet the former: Twisted “reporting” in order to set up quotes from whichever blithering idiot he’s lined up on for a phone interview today. Just because Steve’s gone, Pete, doesn’t mean you can start to suck as a journalist.

Burrows continues, “‘A scorched-earth strategy is bad news because it doesn’t optimize the value of their patents — because people will get around them,’ said Rivette, whose clients include Android licensees. ‘It’s like a dam. Using their patents to keep rivals out of the market is like putting rocks in a stream. The stream is going to find a way around. Wouldn’t it be better to direct where the water goes?'”

MacDailyNews Take: There’s the quote that Burrow’s introductory mischaracterization was intended to set up.

Burrows continues, “The question on the minds of many patent lawyers isn’t whether Apple should adapt its legal stance, but when. For now, the company’s approach is costing rivals millions of dollars in fees, distracting management and preventing them from emulating Apple’s products more boldly, said Ron Epstein, a former attorney at Intel Corp. who now runs patent licensing firm Epicenter IP Group.”

“Apple’s patent portfolio remains strong compared with those of rivals, thanks both to the innovations that went into groundbreaking products such as the iPhone and iPad, and to the effectiveness of Apple’s legal department in obtaining patents for those innovations, said Christopher Marlett, chairman and co-founder of MDB Capital Group, an investment bank that advises companies on buying and selling patents,” Burrows reports. “‘Apple has the patents, the money and the expertise to go to war,’ Marlett said. ‘I just don’t see why Apple would seek détente, since they’re the clear leader. Until they’re hit with an injunction by Google or Samsung, they don’t need to get serious about licensing.'”

Read more in the full article here.

MacDailyNews Take: Marlett has it exactly correct. Despite the Bloomberg headline, “Apple May Hurt Shareholders With Patent War,” and Burrows’ ham-handed attempt to bolster his phoner’s quote, this article could just as easily be headlined, “Apple has the patents, the money and the expertise to go to war,” but it likely would have generated fewer hits. So, bully for Bloomberg, we guess.