Apple vs Samsung: Be Careful What You Wish For

[don]

By NICK BILTON

SAN JOSE, Calif. - Back in the early 1930s, a magician by the name of Horace Goldin went to court to defend his signature illusion: sawing a woman in half.

Mr. Goldin filed a lawsuit against the R. J. Reynolds Tobacco Company for using this magic trick in an advertisement and explaining how it worked. According to an article in The New York Times from March 1933, Mr. Goldin, who had won a patent for the illusion a decade earlier, asserted that the ad had adversely affected his ability to get people to see his shows. He asked for $50,000 in damages. (That's about $865,000 in today's dollars.)

I thought about Mr. Goldin last week as I sat in a federal courtroom here in the capital city of Silicon Valley. I listened to evidence presented in a patent lawsuit that Apple has brought against Samsung Electronics. Apple claims that Samsung copied its designs for the iPhone and the iPad.

You see, even just by filing his patent, and then using it to litigate, Mr. Goldin publicly drew attention to the secrets of his profession. Apple, by going to a jury trial to defend the patents of its most prized products, is also allowing competitors and the public to see inside one of the most secretive companies in the world.

Steven P. Jobs, the co-founder of Apple, was very much in the mold of a magician. People often spoke of being sucked into a "reality distortion field" as he pitched his new products. Anyone who closely watched those dramatic announcements may recall how he repeatedly used the word "magical" to describe his latest devices.

The way the audience oohed and aahed during his performance was as if Mr. Jobs was saying: "Step right up! Ladies and gentlemen. Boys and girls of all ages! See the latest magical Apple device. You can stretch your fingers on the flat screen and zoom into a photo or map!"

More oohs and aahs.

It was, after all, Arthur C. Clarke, the science fiction author, who once said, "Any sufficiently advanced technology is indistinguishable from magic." And as Mr. Jobs knew so well, one thing that makes magic so, well, magical, is that you don't know how it works. It's also one reason Apple is so annoyingly tight-lipped.

Based on early depositions and courtroom documents that have been submitted for the Apple v. Samsung trial - including photos, e-mails and prototypes - we're starting to learn just how Mr. Jobs pulled off his tricks.

On the first day of the trial, Christopher Stringer, a longtime industrial designer at Apple with a flair for the theatrical - he wore an ice-cream-white suit - explained the process the company goes through to create these prototypes.

For example, 15 or 16 designers worked together around a kitchen table. When it came time to plan the devices, the company tried almost everything. There are iPads of various exaggerated shapes and sizes. They are white, black or metallic. One iPad has a strange stand that protrudes from the back.

Some of the early prototypes of the iPhone are bizarre. One, a long black rectangle, looks as if it is twice the size it should be. Others have beautifully curved glass screens. Another resembles an old silver iPod that just happens to be a phone, too. And there's the strangest of all: an iPhone that looks like a stretched hexagon made of cheap black plastic.

While in court on Friday, Philip W. Schiller, Apple's senior vice president for worldwide product marketing, pulled the curtain further back when he divulged the company's advertising budgets - often more than $100 million a year for the iPhone alone. Also at the hearing, Scott Forstall, senior vice president for iPhone software, explained that the early iPhone was called "Project Purple." Mr. Forstall said it was built in a highly secure building on Apple's campus. A sign on the back of the building read "Fight Club." Behind the security cameras and locked doors, most employees on the project did not even know what they were working on.

This is just the beginning. There will be weeks of trials and other executive inquisitions that will explain how other magic tricks work inside Apple.

For its part, Samsung accuses Apple of copying from Sony - Sony! - and other electronics makers. It even sent out a news release containing evidence that the court would not allow to be presented before the jury that showed what it says is truly behind the magic.

It seems that even if Apple wins the patent case against Samsung, it may find itself in the same pickle that Mr. Goldin did 80 years ago.

Although the federal court threw out Mr. Goldin's claim in 1938, the damage had already been done. Besides the large legal fees, the news media brought more attention to how the magic trick of sawing a woman in half actually worked - it was no longer magical. (The secret involved two women. The first woman's feet protruded from the base of the box, the other's head stuck out of the top.)

Years later, when Mr. Goldin developed a new illusion in which a giant buzz-saw blade appeared to cut through a woman who was not even enclosed in a box, he chose not to file a patent. He didn't follow up with any litigation against people who tried to copy or use his trick. He had learned it didn't pay to protect his secrets that way.

By showing the public how it designs products that twice radically changed the electronics industry, Apple could risk losing some of its magic.

http://bits.blogs.nytimes.com/2012/0.../?ref=business

[sunskyfan]

Re: Apple vs Samsung: Be Careful What You Wish For

How many company's have built wrappers on public domain Unix and called it "magic"? Apple tried to patent the concept of a hamburger. You might get trade secret protection because three pickles is better than two but that is about it. What's funny is that the Apple people actually think they invented the hamburger. If you like Wendy's more than McDonald's great but the Apple bs bubble has burst thank god.

[Ghent12]

Re: Apple vs Samsung: Be Careful What You Wish For

Patent laws are very interesting from an overall economic perspective. The Wright brothers did amazing things in their time; they proved that hard work and original research can pay off, even and especially outside of an ivory tower. They brought flight to the world; yet they also set back its development by years. They used wing warping to achieve controlled flight, yet their patent actually protected the concept of lateral control. Their patent was, in effect, for controlled flight itself, and they defended it tooth and nail. The Wright brothers are actually villains of aerospace, even though their seminal achievement is celebrated as it should be.

The concept of "intellectual property" is actually quite disturbing on an intellectual level. Thinking of something new is praiseworthy, but "owning" an idea? It certainly seems mad. While I can understand the purpose for patent and IP laws, which is to protect people who invent and to incentivize people to think, it certainly seems that its application is wholly dominated by the 'Law of Unintended Consequences' in that it seems to retard both innovation and the increase in living standards for people, rather than foster an environment conducive to innovation and invention.

Honestly Apple should have a reasonable expectation of protection provided for under the law, even if the law shouldn't exist in the first place. I hope this mess gets as complicated as it can, with all sides revealing the utter weakness of the very notion of intellectual property.

[don]

Re: Apple vs Samsung: Be Careful What You Wish For

and then there was Edison . . . .

[astonas]

Re: Apple vs Samsung: Be Careful What You Wish For

Patent laws are very interesting from an overall economic perspective. The Wright brothers did amazing things in their time; they proved that hard work and original research can pay off, even and especially outside of an ivory tower. They brought flight to the world; yet they also set back its development by years. They used wing warping to achieve controlled flight, yet their patent actually protected the concept of lateral control. Their patent was, in effect, for controlled flight itself, and they defended it tooth and nail. The Wright brothers are actually villains of aerospace, even though their seminal achievement is celebrated as it should be.

The concept of "intellectual property" is actually quite disturbing on an intellectual level. Thinking of something new is praiseworthy, but "owning" an idea? It certainly seems mad. While I can understand the purpose for patent and IP laws, which is to protect people who invent and to incentivize people to think, it certainly seems that its application is wholly dominated by the 'Law of Unintended Consequences' in that it seems to retard both innovation and the increase in living standards for people, rather than foster an environment conducive to innovation and invention.

Honestly Apple should have a reasonable expectation of protection provided for under the law, even if the law shouldn't exist in the first place. I hope this mess gets as complicated as it can, with all sides revealing the utter weakness of the very notion of intellectual property.

I'm actually quite torn on this one. As a patent-holder, currently receiving royalties, I can certainly see the way patents make investments in R&D worthwhile. As a business-owner in a field flooded with patent trolls, I see the clear unintended consequences you describe, and shudder.

I think the real answer, however, is not to be pro- or anti- patents, but to be in favor of patent agency reform. The patent system used to work fine. The problems really started when all sorts of garbage started being allowed as patents. A business model? A one-step-checkout button for an online shopping site? An "invention" not really reduced to practice, but couched in such vague or convoluted terms that this is hard to discern? Obvious extensions on decades-old technologies? Things already being made by others? The gates of the patent office have been opened wide to all these travesties, and more. And even if the patents are obviously not going to hold up in court, the cost of the court battle to prove that fact is enough to squish the small companies that need patents in the first place.

Essentially, it came down to a choice between increasing the budget for the patent office to keep up with innovation, or simply equipping existing patent officers with a rubber stamp and instructions to approve every patent that was even close to being filled out correctly, and the decision was made to save costs. (There was of course massive lobbying from the largest industrial companies, across many industries as well, since these had the resources to play in the filings arms race that everyone knew would follow.)

Just one more example of penny-wise and pound-foolish decision-making in government producing perverse incentives.

It seems to be happening all the time. If I had a nickle for every example ...

Hey wait, I should file a patent!

[Ghent12]

Re: Apple vs Samsung: Be Careful What You Wish For

I'm actually quite torn on this one. As a patent-holder, currently receiving royalties, I can certainly see the way patents make investments in R&D worthwhile. As a business-owner in a field flooded with patent trolls, I see the clear unintended consequences you describe, and shudder.

I think the real answer, however, is not to be pro- or anti- patents, but to be in favor of patent agency reform. The patent system used to work fine. The problems really started when all sorts of garbage started being allowed as patents. A business model? A one-step-checkout button for an online shopping site? An "invention" not really reduced to practice, but couched in such vague or convoluted terms that this is hard to discern? Obvious extensions on decades-old technologies? Things already being made by others? The gates of the patent office have been opened wide to all these travesties, and more. And even if the patents are obviously not going to hold up in court, the cost of the court battle to prove that fact is enough to squish the small companies that need patents in the first place.

Essentially, it came down to a choice between increasing the budget for the patent office to keep up with innovation, or simply equipping existing patent officers with a rubber stamp and instructions to approve every patent that was even close to being filled out correctly, and the decision was made to save costs. (There was of course massive lobbying from the largest industrial companies, across many industries as well, since these had the resources to play in the filings arms race that everyone knew would follow.)

Just one more example of penny-wise and pound-foolish decision-making in government producing perverse incentives.

It seems to be happening all the time. If I had a nickle for every example ...

Hey wait, I should file a patent!

I must disagree with the principle that reform will be sufficient. Even legitimate patents have been used as a cudgel to bash innovation, and this has been going on for a very long time; perhaps as old as the patent office itself. The Wright brothers, for instance, received a quite legitimate patent which they then used for the purpose that patents serve: to stifle competition and innovation.

The patent office has an inherent weakness that it will never be rid of. There is no such thing as a monopoly on knowledge; likewise there is no possibility that the patent office, no matter how packed full of academics, experts, and other professional thinkers, will have enough knowledge to consider the thoughts and ideas of the entire remainder of society. This is actually the fundamental argument against "central planning" and any sort of government oversight of broad topics. Unless you are actually using every single citizen as an agent of the patent office, or perhaps some plurality, then the patent office will be dwarfed in the practical knowledge it needs to perform its job. IP and patent law reform will only serve as a Band-Aide on an amputation, so long as the critical weakness of the patent office exists.

[don]

Re: Apple vs Samsung: Be Careful What You Wish For

Even legitimate patents have been used as a cudgel to bash innovation, and this has been going on for a very long time; perhaps as old as the patent office itself.

Never more so than in our global oligopolies.

the purpose that patents serve: to stifle competition and innovation.

I would not care to put in three years of research and writing on a book without copyright protection. I assume inventors share that sentiment. What we're experiencing is patent-protection run amoke, put into legislation by the usual for-sale culprits.

[Ghent12]

Re: Apple vs Samsung: Be Careful What You Wish For

I would not care to put in three years of research and writing on a book without copyright protection. I assume inventors share that sentiment. What we're experiencing is patent-protection run amoke, put into legislation by the usual for-sale culprits.

Well a book is one thing, and an idea for an invention is something else. Both represent ideas, but in the case of a book, I'm not sure I see much wrong in protecting copyrights to an extent or to protecting brand names. After all, it would be fraudulent for someone to claim your work as their own, ergo it should be illegal for them to do so. But to own an idea? Still seems impossible to me.

If someone wants to benefit from your brand or reputation (i.e. in the case of copyrights or brands), then clearly it seems fraudulent to do so unless they acknowledge a consenting partnership. It seems perfectly fine, under the logic of punishing and deterring fraud, to acknowledge a useful and necessary role for copyright laws and brand protection laws. I see these things as wholly different from the bulk of patent and IP laws, however.

[astonas]

Re: Apple vs Samsung: Be Careful What You Wish For

I must disagree with the principle that reform will be sufficient. Even legitimate patents have been used as a cudgel to bash innovation, and this has been going on for a very long time; perhaps as old as the patent office itself. The Wright brothers, for instance, received a quite legitimate patent which they then used for the purpose that patents serve: to stifle competition and innovation.

The patent office has an inherent weakness that it will never be rid of. There is no such thing as a monopoly on knowledge; likewise there is no possibility that the patent office, no matter how packed full of academics, experts, and other professional thinkers, will have enough knowledge to consider the thoughts and ideas of the entire remainder of society. This is actually the fundamental argument against "central planning" and any sort of government oversight of broad topics. Unless you are actually using every single citizen as an agent of the patent office, or perhaps some plurality, then the patent office will be dwarfed in the practical knowledge it needs to perform its job. IP and patent law reform will only serve as a Band-Aide on an amputation, so long as the critical weakness of the patent office exists.

This is certainly a valid perspective. However, it is interesting to note that in nations where intellectual property protections are weak or non-existent, innovation is not greater, but far less. This is quite logical; it makes no sense to spend money developing a great technology, if this will then be treated as a public good, which competitors may use from day 1, with no preference at all given to the inventor. Rather, the (individual's) optimal solution becomes to wait until your competitor creates something, and quickly copy it. All of the benefit, none of the cost. Actual invention becomes a sucker's game, in which one works for the benefit of one's competitors. In making intellectual property a free-for-all, one creates an incentive to not innovate at all.

Personal gain and loss has to be tied to personal effort or sloth. This was precisely what communism got wrong, and why that system led to the collapse of the nations that tried it. If there is no personal gain in inventing, less invention happens.

Now, if one feels that patents provide protection for too long, too broadly, or the system of extending them through incremental improvements is overly generous, you won't find disagreement from me on that. Abuses certainly do happen, all the time. That needs to be fixed. Everything should be on the table to find a more workable system.

But getting rid of intellectual property as a concept, in favor of the default collective approach, seems to me to be throwing the baby out with the bath water. Not only that, but the political right would never permit such a dramatic move toward socialism (collective ownership of all IP) so the approach seems slightly impractical at this point.

[c1ue]

Re: Apple vs Samsung: Be Careful What You Wish For

I think the concept of patents isn't fundamentally flawed.

My view is that the execution as it stands today is the problem, also a lack of execution on the business aspect.

As I've noted in a blog entry, any form of monopoly granted by government is an evil, and copyright/trademark/patent monopolies can only be an acceptable evil if the net to society is positive.

We see more and more every day how patents are being used not for societal benefit, but for profit. One aspect by which this can be reversed is to restrict such granted monopolies to actual people and their lifespans.

Corporations and patents which never, ever end are a travesty.

Another aspect which I think would offer substantive improvement would be an enforced ability to use a patent in return for an enforced profit sharing. Right now patents are being used as exclusionary devices - to protect entire markets from competition.

This type of dynamic is antithetical to the entire notion of progress - of standing on the shoulders of giants.

If, on the other hand, an owner of a patent would not be entitled to prohibit, but only to reap gain, I think this is a much more equitable arrangement. If ultimately someone else can do better with said invention than the owner, both sides then benefit. What that level is, I don't know, but it shouldn't be so low as to be irrelevant (1%) nor should it be so high as to be punitive (40%).

[Ghent12]

Re: Apple vs Samsung: Be Careful What You Wish For

This is certainly a valid perspective. However, it is interesting to note that in nations where intellectual property protections are weak or non-existent, innovation is not greater, but far less. This is quite logical; it makes no sense to spend money developing a great technology, if this will then be treated as a public good, which competitors may use from day 1, with no preference at all given to the inventor. Rather, the (individual's) optimal solution becomes to wait until your competitor creates something, and quickly copy it. All of the benefit, none of the cost. Actual invention becomes a sucker's game, in which one works for the benefit of one's competitors. In making intellectual property a free-for-all, one creates an incentive to not innovate at all.

Well as they say, correlation is not causation. It is more likely that the things which go along with rigorous IP laws generally go in tandem with other things that also boost innovation and the economic circumstances of the population in general; namely, strong IP is generally part of the portfolio a government offers when it provides dependable laws and economic liberty, both of which strongly promote economic activity and innovation.

Personal gain and loss has to be tied to personal effort or sloth. This was precisely what communism got wrong, and why that system led to the collapse of the nations that tried it. If there is no personal gain in inventing, less invention happens.

Indeed you are correct. It truly is all about incentives. Motivation makes all the difference. But when it comes to IP, do we really want to encourage innovation to a fault? As any engineer or business leader should know, it's not just the idea that is important. One must execute the idea as well. IP protection serves to reward idea-makers and leaves the execution to the same, even though there is an extremely high probability that the entity best suited to execute an idea is not the same one that thought it up. Is that what is best for the economy as a whole? Is it worth the perpetual inefficiency in bringing new ideas to the market in order to foster their creation in the first place? I'm not sold.

Now, if one feels that patents provide protection for too long, too broadly, or the system of extending them through incremental improvements is overly generous, you won't find disagreement from me on that. Abuses certainly do happen, all the time. That needs to be fixed. Everything should be on the table to find a more workable system.

But getting rid of intellectual property as a concept, in favor of the default collective approach, seems to me to be throwing the baby out with the bath water. Not only that, but the political right would never permit such a dramatic move toward socialism (collective ownership of all IP) so the approach seems slightly impractical at this point.

Abuses, misuses and uses are all the same thing when it comes to the law, at least in relatively legally reliable countries such as the US. That is why laws are so dangerous in the first place; their intentions are irrelevant, and it is the incentives which matter.

Besides, I am not really advocating a "collective" approach, but rather a non-ownership approach at least when it comes to the creation of things. We could split hairs on the difference between non-ownership and collective ownership, but the underlying reality is that innovation is and will be stifled to some degree under any sort of IP umbrella because of the fundamental problem that such a system has--its lack of a monopoly on practical knowledge. To have any system with a monopoly on "ideas" by a society but to have only a very small fraction of the knowledge the society has will always be prone to failings; meanwhile the law of averages basically guarantees that while most of those failings can be mitigated to relatively small magnitudes, some of those failings will be gargantuan.



You are very right that the execution is flawed. Fundamentally, it always will be.

[c1ue]

Re: Apple vs Samsung: Be Careful What You Wish For

You're misquoting...

[Ghent12]

Re: Apple vs Samsung: Be Careful What You Wish For

My apologies.

[reggie]

Re: Apple vs Samsung: Be Careful What You Wish For

...First rule about Fight club, don't talk about Fight club.

.....2nd rule: do not talk about Fight club.....

[flintlock]

Re: Apple vs Samsung: Be Careful What You Wish For

Whats the point? The Chinese will just copy it anyway.