Earlier today Roger Chang at Cnet reported that Apple has reached out to the two companies it started a bitter and ongoing patent war against. Interestingly, it was reported that Apple had signaled that it was willing to negotiate licensing deals with both companies. TMV certainly hope it is true, yet we find it intriguing that the company that was the aggressor in this dirty patent war is the one offering a truce. What could be the reasons behind such an about face?
If I were a betting man it would be hard to figure out the odds of who would win the overall war if it were to continue. Both Samsung and Motorola have won a number of battles, as has Apple. So, all in all it has been a pretty even war in terms of court wins across numerous territories. The fact such an about turn from the company who decided to use the ‘Nuclear option’ in the first place appears one day prior to the launch of Apple’s iPad 3 certainly begs the question of why now?
TMV have noted in earlier posts that whilst Apple started the war with Samsung last April, Apple had not licensed some essential patents that are critical to 3G-network reception in both its iPhones since 2008 and the iPad since 2010. We would hazard a guess that whilst yes Apple may have won a couple of its alleged patent breaches by Samsung, the fact is these breaches only extended from April 2011 onwards whereas Apple’s own breaches extended back five years.
What we are getting at here is that the level of payouts would have potentially swung against Apple in terms of Samsung and/or Motorola winning against Apple. Were Apple to win the battle the payouts would have been minimal in comparison. TMV do believe that this may have been what has resulted in Apple’s decision to offer an olive branch to the companies it declared war against. Doe this signify that Apple views a weakness within itself in terms of the war it started or is it a genuine move that is positive for all companies involved and consumers?
Obviously, if these rumors are true it will be great for consumers. The key losers so far of what has been an ongoing and increasingly bitter patent war have been consumers. Why because it has stifled innovation and the fact one of the battles has been over the slide to unlock a phone patent – which in TMV’s view should be considered an industry standard and licensed as such.
Consumers stand to gain the most if a truce is negotiated. TMV would state that Apple also has the most to be gained whilst Motorola and Samsung have the most to lose by agreeing to a truce. However, the fact that as reported both Samsung and Motorola have been demanding more than twice what is regarded as an industry standard royalty for Apple to license their patents could work against them. If the standard FRAND royalty is 1% than both Motorola and Samsung should honor it – as should Apple.
On a final note, it will be interesting to see the responses of both Samsung and Motorola to Apple’s offer of an olive branch. If one company comes to the table and another does not, then it will no doubt continue to be a drawn-out bitter war where the key loser is the consumer.