A man waits in line outside the Apple store on 5th Avenue, awaiting the arrival of the new iphone 5 September 17, 2012 in New York. Apple said Monday that it received more than two million orders for its new iPhone 5 in 24 hours, and that many deliveries would be pushed back into October because of strong demand.'iPhone 5 pre-orders have shattered the previous record held by iPhone 4S and the customer response to iPhone 5 has been phenomenal,' said Philip Schiller, Apple's senior vice president of worldwide marketing. Apple unveiled the new version of its iconic smartphone last Wednesday and opened up pre-orders on Friday. The first customers in the United States and several other countries are expected to get the device September 21, but Apple said some would have to wait. (Image credit: AFP/Getty Images via @daylife)This week the Wall St Journal reported that Apple and Samsung had been in negotiations to settle their long running patent conflicts, coming close to a settlement in February. No surprise, though - a deal still seems a long way off.
The conflict is set to get more bizarre before it gets better. The US International Trade Commission (ITC) is due to rule soon on a second Apple v Samsung trade dispute very soon that could take some Samsung products off the US market.
The ITC already made the headlines in June by ruling in favor of Samsung in a case known as 337- 794. In that case the ITC ruled that Apple infringed Samsung communications patents. It could lead to Apple products (like the iPhone 4) not being allowed into the US (the case is now under Presidential review).
The second case is 337-796, brought by Apple against Samsung. The ITC is due to give its final determination on August 1st, and is expected to rule that Samsung has infringed Apple patents, which in turn will lead to a block on older Samsung products.
So there you have it - potentially, in ten days time, both of the world's major smartphone and device makers could have products banned from the USA. But there is a bigger issue. Can complex intellectual property issues be determined satisfactorily through litigation or does the Apple V Samsung case point up a need to do much better innovation management?
The cases appear to be about individual patents but in reality they point to shortcomings in the way companies manage innovation, cradle to market.
Bloomberg summarizes the 4 infringements by Samsung in case 796 as:
a design patent for the iPhone's flat front face with wider borders at the top and bottom. Also found to be infringed were a feature patent for a multi-touch screen; another patent that covers the translucent images for applications displayed on a phone or computer screen; and one for a way to detect when headphone jacks are plugged in.
Samsung has been providing background briefings on the case over the past week, focusing on the design patent where it points out with understandable incredulity, that Apple has managed to patent a shape.
On the other hand it is not unusual in the USA to patent "appearance". Since 2008 it has been significantly easier to enforce design patents with a one-step proof: is the accused design substantially similar to that of the patent holder in the eyes of an ordinary observer? Design patents in the US are cheaper than utility patents, both to submit and to maintain. They are also issued more quickly. They are growing in popularity.
That's a good thing, says patent expert Cheryl Milone at Article One Partners, because design is precisely what opens up new markets these days, particularly interface designs. That sentiment is echoed in an April 2013 article in National Law by former Director of the USPTO David J. Kappos.
That is the story of design - innovators blurring the lines of the traditional intellectual property realms of patents, trademarks and copyrights to deliver not just new products, but entirely new markets by matching form with function and making "complicated" "simple." For these innovators, the new frontier for IP now and tomorrow is in the increasing convergence of IP embodied in design.
If that seems to echo Apples achievement then that s no surprise. It was specifically the look and feel of the iPhone that opened up the smartphone market.
Whatever goes on under the hood, Apple's big contribution to the market is the usability of its devices compared to what went before. Milone believes that deserves protection.
From Apple's point of view it wants protection for the ingenuity it puts into making devices usable. From Samsung's, it wants protection for the billions it invests in device hardware and production line innovation.
Kappos argues that we need to move beyond this argument and recognize that the silos of patent, copyright and trademark don't do justice to where IP is now headed - embodying products, service, software into a set of design concepts. That is a significant reflection too of where the US economy is headed, away from manufacturing towards creative IP.
It's easier to make that argument if your economy is not dependent on the nuts and bolts (and expensive clean rooms) of modern device manufacture. And it is potentially an argument loaded with cultural relativism. So what's the way round that?
While it might well be that new regulations are needed, something else is also afoot.
Companies need a much more comprehensive innovation architecture, one that gives them the ability to have better oversight of all stages in their product origination, manufacturing, interconnection, component, design and go to market planning. It's not about a new invention product or device anymore. Innovation is about the whole relationship of a company to its ecosystem and market. In that sense Kappos has nailed an important point. The consequence is for companies to manage innovation better.
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