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So they're at it again, Apple and Samsung, fighting over patents in a courtroom in San Jose, California. They had a similar fight in 2012, in the same courtroom, which Apple won. Samsung has also won its share of these legal battles, including in Australia.
This time around, Apple alleges that Samsung has violated five of its patents, including the one that allows iPhone users to slide their finger across the bottom of the screen to unlock it. One of its experts testified the other day that Samsung should be forced to pay more than $2 billion for the harm done. Samsung, meanwhile, has retaliated by accusing Apple of violating several of its patents. The legal bills alone have to be running into the tens of millions of dollars.
Perhaps it is just coincidence that this latest trial coincides with the publication of a new book by Yukari Iwatani Kane, titled Haunted Empire: Apple After Steve Jobs. The coincidence is nonetheless telling. (Disclosure: Kane devotes several pages to a phone call I got from Steve Jobs in 2008 when I was working on a column about Apple's unwillingness to disclose details of his health problems.)
The Apple Kane chronicles in Haunted Empire is not the same company she used to cover as a reporter for The Wall Street Journal, when Jobs was alive. That Apple was fearless in its willingness to take risks and bring innovative products to market. This Apple, the post-Jobs Apple, has become risk-averse, its innovative capacity reduced to making small tweaks on products it has already brought to market. Though its leadership still talks a good game, it has so far been unable to deliver on the kind of knock-your-socks-off products for which Apple was once famous.
Part of this was inevitable. Jobs was a once-in-a-generation leader, with product instincts that just aren't replicable. It is a sobering tale of what happens when a corporation becomes so reliant on one man.
But there are other reasons, too. Kane tracks down Clayton Christensen, the Harvard Business School professor and author of the famous business book The Innovator's Dilemma. The book documents how companies stop innovating as they reach a certain critical mass and become more concerned with protecting what they have rather than chasing the new. This makes them vulnerable to newer competitors. "By the time those companies paid attention to the cheap, new innovations they had initially ignored, it was usually too late," writes Kane, paraphrasing Christensen. Apple, Christensen believed, had long been the exception to his rule. Now, he feared, it was facing the innovator's dilemma, just as other big companies did.
Meanwhile, the stock market was souring on Apple, and even Carl Icahn was poking around, urging Tim Cook, Jobs's successor as chief executive, to hand some of its enormous cash hoard to shareholders.
The only real way to stave off further decline is to come out with a product that establishes a whole new category - the way the iPad did in 2010. But that seems unlikely. "Outside the echo chamber of Apple's headquarters, the notion of the company's exceptionalism has been shattered," Kane writes.
Which brings me back to the litigation with Samsung - the company that is coming to market with products that are every bit as good as Apple's, and at a lower price to boot. This never-ending litigation is yet another sign that Apple is becoming a spent force. Suing each other "is not what innovative companies do," said Robin Feldman, a patent law expert at the University of California, Hastings College of the Law.
Nor has the lawsuit been going smoothly for Apple. One document revealed during the trial was an internal Apple presentation, a slide of which read, "Consumers want what we don't have" - meaning inexpensive phones with large screens, which Apple doesn't sell. In the earlier trial, although Apple won a verdict against Samsung, the judge refused to force Samsung to remove certain products from the market, as Apple has demanded. Instead, the case had the perverse effect of validating "the Korean company as a worthy rival and supplied it with free advertising," writes Kane.
These patent war cases can be - and should be - easily settled, as everyone in the business knows. Every smartphone company is now armed to the teeth with patents, and the most sensible way to deal with the issue is to cross-license the patents. Then the companies can get back to the business of innovating. Apple's utter refusal to do so suggests that it has become less interested - or less capable - of innovating and more interested in protecting what it has already brought to market.
Or, as Apple's former general counsel, Nancy Heinen, tells Kane, "When patent lawyers become rock stars, it is a bad sign for where an industry is headed."
© 2014 The New York Times News Service
