How long can Apple sustain Steve Jobs' patent war?

Steve Jobs told his biographer that Apple would rather wage "thermonuclear war" with Google Inc. than make deals to share its technology with the maker of the Android operating system.

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

Now, as rulings start coming in, it might be time for a detente 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.

"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?"

Apple spokesman Steve Dowling declined to comment.

For a time, Apple's strategy looked sound. In October, an Australian court banned the sale of Samsung's Galaxy 10.1 tablet in that country, and the U.S. International Trade Commission agreed to consider an import ban on sales of certain HTC devices.

Then the tide began to turn. Apple suffered a setback Nov. 30, when a higher Australian court overturned the ruling against Samsung. On Thursday, a German judge said he was unlikely to uphold an import ban on a version of the Galaxy, which Samsung had modified in response to a ban on the original design.

Partial victory

The ITC gave Apple only a partial victory on Dec. 20 by ruling that HTC had violated only one of four patents Apple said it infringed. The patent covered what is called data detection, a feature that helps users make a call, send an e-mail or find an address on a map with a single keystroke. A day later, HTC said it found a way to work around the issue.

Even if HTC had to leave the feature out of its future products, the ruling reinforces predictions that Apple won't succeed forever in preventing Android rivals from selling gadgets with the now-familiar hallmarks of Apple's pioneering devices. These include touch-screens and app stores.

Long-term prospects

Legal history isn't on Apple's side, said Marshall Phelps, former head of intellectual property at IBM and Microsoft.

"Nobody has ever kept competitors out of any market with patents," in part because software can usually be slightly changed to find a non-infringing alternative, he said.

Exceptions, he said, include an IBM patent that characterized the basic architecture of a computer and Texas Instruments' original patent for the integrated circuit, or computer chip.

IBM was ordered by the U.S. Department of Justice to license its patent, while Texas Instruments decided to do the same, which has resulted in billions of dollars in royalties, Phelps said.

Many of Apple's patents, by contrast, relate to the look and feel of devices or particular ways of using a machine, rather than a basic technology breakthrough.

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 who now runs patent licensing firm Epicenter IP Group.

Source: http://feeds.sfgate.com/click.phdo?i=b6e165ca2156206f267aae115c0aec0b

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