Joff Wild

Apple cannot win a patent war predicated on market exclusion. With the Android source code being open, Apple might just as well be fighting a Hydra – cut off one device from the market and two more will appear to replace it. Ultimately, Apple’s best course of action will most likely be to enter into licensing agreements with its competitors, which will not only result in significant revenues, but also push up the prices (or reduce the margins) on competitive products.

In the denouement of War Games the computer Joshua concludes that nuclear warfare is “a strange game. The only winning move is not to play”. “How about,” it suggests, “a nice game of chess?” Of course, with evenly matched opponents, even a game of chess can end in a stalemate. But the path to victory, defeat or draw is paved with many strategic plans, twists, turns and surprises, and destruction is certainly not mutually assured.

Jobs may have wanted to “go thermonuclear war” on Android, but a better metaphor for global litigation is a long, drawn-out game of chess. And currently, while a few pawns have been sacrificed, there is no sign of check or mate.

So concluded Australian patent attorney Mark Summerfield in the cover story of issue 52 of IAM, published at the start of 2012. We were pretty certain Mark was right back then; we know he was now. Yesterday it was announced that Apple and Samsung have agreed to drop all patent litigation cases they are fighting against each other outside of the US; a move that will bring an end to disputes in jurisdictions across Asia and Europe.

American issues remain to be dealt with, of course, and there is the possibility that more US actions might be filed; but unless Apple somehow manages to get a meaningful injunction issued by a court there, the only reasonable conclusion that can be drawn from the last three years of fighting is that the thermonuclear war strategy unleashed by Steve Jobs against Android had failed. Samsung and, by extension, Google have won (with Microsoft feeding away happily on the sidelines).

Apple will now focus on competing with its Android rival in the market rather than in the courts – something that recent results indicate it is perfectly capable of doing.  Perhaps if this had been the strategy all along Samsung would not have be the major competitor it has become. But what is done is done; and it is certain that big lessons have been learned in Cupertino from how the last three years have played out.

As we contemplate the winding down of the smartphone wars – if not their end – it’s worth remembering that time and again they have been used as an example of how the patent system is dysfunctional and out of control. That, of course, is nonsense. The simple fact is that since they began smartphones and other mobile devices have decreased in cost, the choice of product available has increased markedly and the technological offerings have advanced rapidly. From a consumer’s perspective, it’s hard to see how this is a market that has been affected adversely in any way at all by patents.

In a similar vein, as we have noted before investment in software companies in the US has reached unprecedented heights. The National Venture Capital Association reported on 2nd August that: “Software was the leading sector in 2013, receiving 37.3% of the total dollars.” Meanwhile, a recent PWC study finds “Tech deals, IPO activity achieving levels 'not seen in years'”. The apps industry too has never had it so good.

It has been claimed time and again that all of these sectors have been profoundly damaged by patents and that innovation and the US economy have suffered as a result. It just does not look that way to me. I guess a retort might be that without patents, or with stricter controls on protection, things might have been even better; to which the only response must be: “Prove it.”