10.02.11

American Duopoly (Apple and Microsoft) Fights Korea With Patents

Posted in Apple, Asia, GNU/Linux, Google, Microsoft, Patents at 11:22 am by Dr. Roy Schestowitz

Seoul besieged again

Seoul Plaza

Summary: A look at Apple’s and Microsoft’s relationship with Samsung (one of the two major Korean companies in this area) and what we can learn from it

SAMSUNG is a hardware giant located at a nation that thrives in production of goods. Samsung is about an order of magnitude larger than Apple, at least in terms of workforce. Not so long ago Samsung surpassed Apple in terms of certain sales and became the largest distributors of Android (even if taxed by Microsoft), amongst other things. It painted a large target on Samsung’s behind, so Microsoft wanted more “royalties” and Apple sought embargoes one country at a time (fortunately there is no global patent system, at least not yet). The strategy has not been particularly useful to Apple; ever since it started suing Android companies using patents (starting with HTC) there has been a great deal of blowback, even from US-based carriers. Apple started alienating too many existing and potential partners, which would be harmful in the long term. At the end of last month we saw Apple taking a small step back (withdrawing patent claims) and now it is complaining about Samsung’s patents. Apple got a little scared and removed patent allegations, so now it seems to be more afraid of Samsung’s own patents. Just remember who started all this confrontation. Apple started it, whereupon pundits said that Apple must have been out of its mind. Some days ago it was reported that Apple significantly reduced its iPad orders; maybe Samsung just won’t help make these. By suing its own producers, Apple made a foolish decision. Microsoft took a different approach with its longtime partner Samsung and to cite Muktware, it did not try to get ridiculous trademarks or manufacture fake 'evidence' to block Samsung’s products. Instead Microsoft tried turning Android/Samsung devices into its own. Here is an article to be aware of:

Apple has been misuing its deep pockets and abusing the legal system to weaken competition. There is good news for competitors, the USPTO has rejected Apple’s trademark claims over ‘multi-touch’. Apple applied for the trademark in 2007 when it launched its iPhone. The USPTO rejected the trademark on the basis that the term is too generic or broad. Apple also holds a trademark on AppStore, a term used for app stores. There is an ongoing legal battle between Apple and Amazon over the use of this genetic term.

Apple is not much of a producing company. It’s a design, marketing, and branding company. This is why it tries so hard to restrict use of vocabulary, product appearance, etc. Apple even hired Viagra experts for this task. The manufacturers of “Apple”-branded products could just do it equally well themselves, a lot more economically too.

“The scenario makes is rather obvious that software patents are a major danger to coders.”Then there is Microsoft, which used to be a monopoly expert (removing choice from the market by crime and underhanded tactics) and has recently become more of a patents aggressor because people fought for choice (more on that in an earlier post). Microsoft is still trying to figure out how to make a profit from other people’s work and in the process it resorts to racketeering, collusion, secret deals, and old partners like Samsung (interesting take), which are all just a convenient way to get around having to face Google. This whole situation is fascinating because, assuming Microsoft can turn patents into its major cash cow, the market for software development will just die a little more. It will become a market of patents, just as Microsoft’s patent troll once envisioned it. Rather than write software (code) people will write words and then extort everyone who writes code implementing an abstract description of it. The scenario makes is rather obvious that software patents are a major danger to coders.

In a truly bizarre article whose headline resembles old propaganda for software patents (“Software Developers Must Be Properly Rewarded”) the case is being made based on the Samsung-Microsoft ‘deal’. If this illustrated anything at all, it is that software patents have absolutely zero value to Korea. It is only secret trade agreements that can somehow make Korea fall on its sword and fall for software patents.

Samsung is now paying Microsoft for something it never made, not even in code, passing the cost to customers, who will in turn reward Microsoft rather than Google. How does that encourage software development? The developers are not being paid.

To use the words of one blogger:

Microsoft has a large advantage in its quest to go after and collect royalties from those that it deems necessary as a direct threat. Microsoft has risen up with full force against Android, just after Windows Phone 7 started to appear. Coincidence? I don’t think so. Most recently it was announced that Microsoft had an “agreement” with Samsung, yet another manufacturer of Android devices. This agreement? It’s been rumoured that Samsung will need to pay close to $5 to Microsoft for each Android phone manufactured and sold. And so this is one side of the blade that Microsoft is swinging all around. Microsoft is using its vast array of patents to frighten phone manufacturers into paying royalties, in order to avoid being sued. Ingenious? Yes, because there’s another side of the blade that didn’t occur to me until recently. Samsung, being a manufacturer of Android devices, could manufacture devices for other operating systems as well, including Windows. Why not? If Microsoft is going to charge Samsung a set fee for each Android phone, yet allow Samsung to manufacture and sell Windows phones with no fees, what incentive would there be for Samsung to continue manufacturing Android devices? Not too many at the rate things are going. The only thing keeping Samsung interested in Android is the market demand for devices that run the Android OS. So Microsoft has two sides to their blade, they swing it to either side and they win. And Google? They seem to be defenseless at the moment while vendors of its software are being bullied by Microsoft.

This is an observation we made over 4 years ago, just after the signing of the Novell deal. The patent deal between Samsung and Microsoft is also over 4 years ago. This is helping non-practising ‘industries’, making developers devalued while “Increas[ing] in demand for Trained Patent Professionals” as this new article puts it:

In India, software is protected under the Copyright Act and not the Patent Act (as in many western countries). However, Indian IT companies have filed patent applications for their software in other parts of the world and these companies continue to seek non-software patents in India. Many of them have also filed business method patents in U.S. As Indian IT companies restructure their operations for high value service offerings, they are focused on innovation and intellectual property generation and protection in India and abroad.

The passage of jobs from engineers to lawyers (who serve a protectionist agenda) is a sad reminder of a society where the rich get richer and smart, honest people get thrown aside. The rise of terms like “Intellectual Property” in the news tells us that there is a strong push to indoctrinate the public all across the world to “respect IP”. Cablegate is full of examples that demonstrate it (we shall dive into more of that later this year).

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3 Comments

  1. Michael said,

    October 2, 2011 at 11:52 am

    Gravatar

    http://maypalo.com/wp-content/uploads/2011/08/Samsung-Products-vs-Apple-products.jpg

    Poor victim Samsung, eh?

    mcinsand Reply:

    Apple and Apple’s fans might believe that Apple innovates, but all they do is ask parts suppliers ‘what could you provide if we didn’t restrict ourselves to a certain price per unit point?’ So, by targeting a less elastic market slice, they can offer the latest and greatest compilations of parts from companies that actually do innovate. As with any other market, as the new parts become more mainstream and in higher volume, the prices drop. It’s like the ‘eggbeater’ style biking pedals that cost $800-$1k when they first came out and are now $40-50.

    Apple’s only honest innovation is using their brand marking and business-dictatorial practices to fleece lemmings that have more money than sense.

    mc

    Michael Reply:

    How do you explain that pretty much every respectable group that has looked at the top innovative companies of the last decade has included Apple in the top 5… if not the top 1.

    Do you think there is some grand conspiracy of “Apple fans” that is forcing Forbes, Business Week, Fast Company, CNN Money, The Street, Technology Review, etc. to add them near the top of their lists?

    No? So what do they know that you do not?

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