Sunday, August 26, 2012

Apple's Assault on the East Asian Engineering Paradigm

Our opening link comes from the Verge:

Jury: Samsung copied Apple, should pay at least $1.049 billion in damages

After a surprisingly short time, court officials informed us that the jury in the Apple v. Samsung case had reached a verdict — and when it came, it wasn't good news for Samsung. The jury found in Apple's favor almost overwhelming, deciding that Samsung had infringement upon Apple's intellectual property with multiple devices. Apple won't be getting the more than $2.5 billion it had asked for, but it will be getting at least $1,049,343,540.
If Apple got 40% of what it asked the jury to award it, then it has done very well.  Its a defeat for Samsung, which lost on all of its counterclaims.

The jury didn't think much of Samsung allegations of infringement, either. They didn't feel that Apple had committed a single count of infringement — at least not anything that Samsung had demonstrated — against either Samsung's standards-essential or utility patents. As such, the company will be receiving nothing for its troubles. 
It wasn't all gravy for Apple, however. The jury found that the company's legal team didn't prove Samsung had broken any antitrust laws or violated its agreements with ETSI. Still, it was a meager get for Samsung, considering the jury also found that Samsung can't enforce its '516 and '941 patents against Apple due to "patent exhaustion" — in this case, the fact that Intel already has a licensing agreement with Samsung, and the company shouldn't be allowed to double-dip.
In case you  feel yourself second-guessing the jury, take a look at the smoking gun:

Apple seizes on Samsung internal document as proof of mimicry

Wired has a rather mediocre take on this whole affair.  Samsung presents itself as allied with the American consumer.  Not exactly.

“Today’s verdict should not be viewed as a win for Apple, but as a loss for the American consumer,” Samsung said in an official statement. “It will lead to fewer choices, less innovation, and potentially higher prices.” 
Indeed, since the jury deemed Apple’s iPhone-related design patents and user interface patents infringed across such a wide spectrum of products, other handset makers — Android manufacturers, in particular — may find themselves in Apple’s sights for future patent litigation. 
“The result will likely be an increase in costs to Android users because of licensing fees to Apple,” Houston-based intellectual property lawyer Steve Mitby told Wired. In layman’s terms: expect Android phones to cost more. “This will drive many Android consumers over to Apple. Next to Samsung, the biggest loser today is Google.”

Apple is the only true innovator.  Knock-offs are not choices, they're just knock-offs.
“The Federal Circuit has a history of scaling back big damages awards, which may spell trouble for Apple’s $1 billion in past damages,” Mitby said. ”However, on the core issues of infringement and validity, the Federal Circuit is less likely to reverse. So even if Samsung is able to reduce the monetary award, the jury’s decision spells trouble for the future of Samsung’s product line –- which is an even bigger financial issue for Samsung.”

Incorrect.  The judge has not awarded punitive damages yet and the $1 billion figure constitutes only actual damages.  In reality, the total dollar figure Samsung may owe to Apple will more likely be larger than that reported this week.  

In this case, Samsung embodied the East Asian Engineering Paradigm.  Top engineers, mostly educated in the West, are assigned to decode and then copy Western innovations.  They sell these near knock-offs very dear domestically and behind high protective tariffs.  Domestic sales subsidize entry into the American market.  

Usually, the East Asian Engineering Paradigm works.  But Apple has struck back.  

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