Apple Inc. (Nasdaq: AAPL) and Samsung Electronics Co. Ltd. (Korea: SEC), have been acting recently as if they were the first technology enterprises to engage in a patent war. The two companies, according to reports, are engaged in more than 30 lawsuits in 10 countries worldwide -- but so far neither has delivered a knockout blow, and the tussle could go on for years more unless sane heads prevail at the companies.
It's obvious to most observers that neither company can right now take the other out of the smartphone and tablet PC markets. Apple is the dominant player in the tablet market and is well entrenched in its corner of the smartphone ring, while Samsung's wide range of Android OS and Windows-OS phones has catapulted the company to the top of that sector. Even though its tablet hasn't had the same success as the iPad, Samsung is one of the few companies that most likely will survive the eventual winnowing in that market segment.
So, this is what I suggest to Apple and Samsung: Get together, hash out the details of a mutually beneficial cross-licensing agreement and go back to the design table.
The European Commission seems to agree. It recently waded into the conflict, concerned Apple and Samsung may be throttling consumer choices in violation of EU regulations. Under a practice accepted worldwide -- known as Fair, Reasonable, and Non-Discriminatory (FRAND) -- companies are typically allowed to use general patents held or claimed by competitors under reasonable licensing terms. Such agreements should not impose an onerous burden on rivals. The EU is now conducting a probe into the two companies' patent claims.
The reality facing the industry is that the technologies used in wireless devices are extensive: The patents governing them run literally into the thousands, and most of these cannot be claimed any longer by a single company. Companies like Nokia and Motorola Mobility (and now Google, with its purchase of Motorola Mobility) hold many of these, and over the years they and other rivals have found ways to share the fundamental technologies in a way that fairly compensates innovators but still makes critical patents available to competitors.
It seems to me both Apple and Samsung aim to use the patents they either own or have filed for to exclude other players from the market. That's a fair position if the technologies behind the patents represent significant breakthroughs. For most of these, though, that is not the case. Some of Apple's patents cover the shape of its iPad, which in my opinion is absurd, considering there isn't anything noteworthy about the size or format of the iPad -- it's a rectangle. What makes the iPad distinct and such a huge success isn't its shape but the operating system and the ecosystem it supports.
A similar argument could be made about the "swipe-to-unlock" fixture on the iPhone. It is certainly different and quite clearly imaginative. But revolutionary? No. Apple has a patent for the concept and should enforce it -- or license the idea to competitors for a reasonable royalty rate -- but it shouldn't be used to exclude other players from the market. We have too many silly patent wars going on in the technology business for courts to continue agreeing with companies that their rights over such innovations should be upheld at a hefty cost to rivals. By the same token, rivals need to engage with patent holders early before using their innovation.
The EU is right to be concerned. Both Apple and Samsung may be crossing a threshold long respected by technology companies.