Why Apple and Samsung Finally Settled Their 7 Year Smartphone Patent Lawsuit

This case was driven by emotion and ego, rather than prudent assessment of costs and benefits tied to intellectual property whose ownership provenance was murky. In another words, the sort of case lawyers love and investors despise.

They finally reached the tipping point where expense, strategic considerations and futility intersect; eg, the 'patently absurd.' JL


Jack Nicas reports in the New York Times:

“Apple can find better ways of earning hundreds of millions of dollars than fighting a decade-long lawsuit.”“Close to a decade of litigation, hundreds of millions of dollars spent on lawyers, and at the end of the day, no products went off the market. It didn't really accomplish anything." The case has always been about more than money.

The smartphone patent wars are finally over.

Apple and Samsung settled a seven-year legal fight on Wednesday, ending the most prominent case in a series of lawsuits over smartphone patents over the last decade.

The companies did not disclose the settlement amount. A jury in May ordered Samsung to pay Apple $539 million for infringing on its patents.

Apple first sued Samsung in 2011 for copying the design of the iPhone, kicking off a winding trail of countersuits, trials and appeals, including a stop at the Supreme Court in 2016.

Apple initially sought to block Samsung phones from the market, but the technology at dispute has long been outdated, and the fight has since largely been about money. Apple at one point sought more than $2 billion, while Samsung had argued it owed just $28 million.

With two of global industry’s biggest players fighting over one of history’s most successful products, the case was one of the most closely watched legal fights in modern business.

“And if I had to characterize it, it didn’t really accomplish anything,” said Brian J. Love, a Santa Clara University law professor who tracked the case. “Close to a decade of litigation, hundreds of millions of dollars spent on lawyers, and at the end of the day, no products went off the market.”

Apple won on paper, but it failed in its goal to gain a competitive advantage over Samsung and other phone makers in its series of lawsuits against them, said Mr. Love and Michael A. Carrier, a professor at Rutgers Law School who studies patent law.

After years of legal fees and countless hours of its executives’ time, Apple walked away with negligible profits on the cases, particularly in the context of its $267 billion cash pile. Apple still earns most of the smartphone industry’s profits, but Samsung and other handset makers have kept up the pressure with strong market share and innovative products.

“Apple can find better ways of earning hundreds of millions of dollars than fighting a decade-long lawsuit,” Mr. Love said.

For other companies, the case is likely to serve as a lesson that “the courtroom is not always the place to try to get ahead,” Mr. Carrier said. “There’s always the trade-off between litigation and innovation, and in the time these companies spent in the courtroom, they weren’t innovating.”

He said the case set the legal precedent that even if a company is shown to infringe on some patents, the courts might not block the product if the patents at issue play a small role in the device.

An Apple spokesman, Josh Rosenstock, referred to a previous company statement that said the “case has always been about more than money.”

“Apple ignited the smartphone revolution with iPhone and it is a fact that Samsung blatantly copied our design,” Apple said in the statement. “It is important that we continue to protect the hard work and innovation of so many people at Apple.”

A Samsung spokeswoman, Danielle Meister, declined to comment.