August 23, 2012 | By Julie Samuels

Apple and Samsung Should Fight in the Marketplace, not the Courtroom

As you’ve likely heard, Apple and Samsung continue to duke it out in what commentators have called the “patent trial of the century.” The case involves more than three dozen devices (such as iPhones, iPads, and Galaxy phones and tablets) and various patents, allegedly covering Apple’s designs, “double-click-to-zoom,” 3G technology, and various other functionalities. But what’s really at stake?

Apple argues that it’s been harmed to the tune of $2.5 billion (!) and seeks to have Samsung’s products banned from the market. Samsung claims that Apple owes it at least $400 million in back royalties. Right now, the companies’ fates lie in the hands of the jury, but it’s not Apple or Google who stands to suffer the most harm: it’s the consumer.

Depending on how the case turns out, consumers could find themselves with fewer choices, since — if Apple has its way — the Galaxy products will be off the market. (In fact, the judge in this case already enjoined the sale of the Galaxy Nexus phone, but the injunction was stayed pending the outcome of this trial.) Less competition is bad for consumers, and those who already own Galaxy products could find themselves with a more limited market for accessories and repairs. 

This lawsuit has garnered much attention, but it’s just the latest in a long line of intellectual property cases between parties big and small that abuse the system and misallocate valuable resources (you might remember such recent hits at Oracle v. Google and the Eolas debacle). The high costs of this litigation — usually well into the millions of dollars in a single case before any damages are even awarded — are often spread over many lawsuits, as parties take these fights to courts all over the country and the world. And it's not just the costs of litigation, but that companies feel a need to grow their own patent arsenal defensively. Taken together, these outrageous patent expenses are often ultimately borne by the consumer in the form of higher prices. Even worse, each dollar that is spent on lawyers and litigation costs is not spent on growing businesses, investing in R&D, hiring more employees, or otherwise benefitting our recovering economy.

Our patent system is intended to incentivize innovation, in theory at least. Lately it’s become little more than a tool to squelch competition, and it’s not just the Apples and the Samsungs of the world who find themselves fighting these battles. It’s also small and innovative companies, local governments, foreign companies trying to make it in America, hobbyists, and even individual developers. The problems are particularly acute in the world of software: it turns out that software patents are nearly five times more likely to be the subject of litigation as other patents. In fact, lawsuits surrounding software patents have more than tripled since 1999.

Apple v. Samsung is not the problem in itself, but it’s a symptom of a broken system. You can find some of our proposals to fix it at defendinnovation.org. We also support pending legislation that would make it tougher to bring bad lawsuits and a little easier to fight back and other self-help remedies for those who don’t want to waste their time and money fighting bad software patents. But it won’t be until the consumers stand up and take on this fight, too, that we will see real change.


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