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Apple's patent 'warning shots' prove disruptive for handset makers

post #1 of 121
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Before Apple publicly sued HTC, the iPhone maker privately had "blunt conversations" with other smartphone companies, amounting to legal threats that have proven disruptive to the roadmaps of would-be iPhone killers, according to a new report.

In a note to investors Tuesday, analyst Yair Reiner with Oppenheimer Research said industry checks indicate that, starting in January, Apple launched a level of discussions with top handset makers to "underscore its growing displeasure at seeing iPhone-related IP infringed."

"The lawsuit filed against HTC thus appears to be Apple's way of putting a public, lawyered-up exclamation point on a series of blunt conversations that have been occurring behind closed doors," Reiner wrote.

He added: "Rival software and hardware teams are going back to the drawing board to look for work-arounds. Lawyers are redoubling their efforts to gauge potential defensive and offensive responses. And strategy teams are working to chart OS strategies that are better hedged."

Apple began actively protecting its patents, the note alleges, in January 2009, when a conference call took place in which the iPhone maker said it would not stand for having its intellectual property -- specifically, multi-touch functionally -- "ripped off." Apple reportedly threatened to use "whatever weapons we have at our disposal."

The threats worked, as handset manufacturers declined to add multi-touch functionality to their phones that were released soon after. But as the year progressed, a number of companies began to release multi-touch capable devices, which caught the ire of Apple.

The analyst said Apple's conversations have created "an effective oil slick" for competitors, as the Cupertino, Calif., company has clearly stated it intends to protect all of the aspects of the iPhone that make it unique, including touch gestures.

Apple's moves have caused some phone manufacturers, Reiner said, to reconsider their wholehearted embrace of the Android mobile operating system platform created by Google.

"The HTC suit, which is recognized as a proxy battle against Google, is causing OEMs to re-examine the strategy of relying overmuch on Android, lest it prove vulnerable in terms of core IP," he wrote. "This concern comes atop pre-existing misgivings about Google's end-game in wireless. (to commoditize the OEMs? To arrogate all value-added services?)"

The conflict, Reiner said, has created an opportunity for Microsoft's newly unveiled Windows Phone 7 Series, due to launch this fall. Microsoft has also told potential customers it would support them legally if they, like HTC, were hit with a lawsuit over intellectual property.

Reiner also cautioned that Apple's approach could backfire if taken too far, as entering into a legal battle with some of the biggest names in the cell phone business would be unwise.

"Apple's legal maneuvering appears to have temporarily retarded its rivals' hot pursuit of the iPhone," Reiner said. "But it also brings Apple a step closer to a head-on legal confrontation with an array of gargantuan adversaries. Now that it has made its point, Apple may want to go back to saber rattling."

Last week, Apple sued HTC over the alleged infringement of 20 patents related to the iPhone's user interface, underlying architecture and hardware. Apple cited some of HTC's most popular handsets, including the Google Nexus One, as infringing on patents it owns. The lawsuit made a clear distinction between Android phones and those powered by Windows Mobile.

Apple is also engaged in a legal battle with smartphone giant Nokia, as Nokia first sued Apple last October, while the iPhone maker countersued in December. Nokia has accused Apple of violating patents related to GSM and wireless LAN technology, while Apple has alleged that its Finnish rival has infringed on 13 patents it owns.
post #2 of 121
Go Apple!
post #3 of 121
Quote:
Originally Posted by AppleInsider View Post

"But it also brings Apple a step closer to a head-on legal confrontation with an array of gargantuan adversaries. Now that it has made its point, Apple may want to go back to saber rattling."

Nonsense. Saber-rattling is non-credible unless you can back it up with action.

'Gargantuan'? Who specificially?

Apple's cash pile alone is more than the market cap of many of these 'gargantuan adversaries.'
post #4 of 121
Hardly surprising!

Apple not having a legal strategy would be ridiculous. All their work in all areas follows very precise strategies.
post #5 of 121
Quote:
Originally Posted by anantksundaram View Post

Nonsense. Saber-rattling is non-credible unless you can back it up with action.

'Gargantuan'? Who specificially?

Apple's cash pile alone is more than the market cap of many of these 'gargantuan adversaries.'

I can't believe they get paid to say this stuff...
post #6 of 121
Quote:
Originally Posted by iStud View Post

Hardly surprising!

Apple not having a legal strategy would be ridiculous. All their work in all areas follows very precise strategies.

apple really doesn't want to get into a 'multitouch' legal nightmare. they will have their patent invalidated. this is just scare tactics. if they proceed this could really back fire.
post #7 of 121
I'm sure you are an expert in patent law, right
post #8 of 121
Quote:
Originally Posted by iStud View Post

I'm sure you are an expert in patent law, right

You should've been here when Apple sued Psystar. Suddenly everyone became an expert in anti-trust laws
post #9 of 121
Chairman Mao has released his goons and cronies to lay the smackdown on those who infringe on the People's Republic of Apple technologies. Seek and destroy!
post #10 of 121
Quote:
Originally Posted by anantksundaram View Post

Nonsense. Saber-rattling is non-credible unless you can back it up with action.

'Gargantuan'? Who specificially?

Apple's cash pile alone is more than the market cap of many of these 'gargantuan adversaries.'

Apple's cash is about 24B, 200B market cap.

Google about 24B (178B cap), MSFT about 33B in cash (250B cap). Nokia's cash figures I couldn't find in 3 minutes, but their market cap is 50B.

--update--
Nokia's cash seems to be 12B if I read forbes correctly (but that's not necessarily the same data as the other results from yahoo finance. Interesting is Nokia and Apple comparison from Forbes: Total current Assets: 33,8B and 33,5B respectively.

So there's a few Gargantuan "who specifically"s.

Regs, Jarkko
post #11 of 121
So I guess they're pretty confident that the multi-touch stuff was ripped off directly from their code.

I keep thinking of all the things an iphone does that's common among devices that existed before it, and it seems like someone could loosely apply the same logic to Apple. For instance, copy and paste. It's handled different than in WM, but the outcome is the same. If multi-touch was handled differently, but the outcome is the same, and Apple sues, then this logic could be twisted on them. That's why I think they're confident in knowing they were directly ripped off.

I'm still fuzzy on whether or not the final outcome of code is what a company can be taken to court over, or the actual code it's self (being a complete ripoff.)
post #12 of 121
Quote:
Originally Posted by ghostface147 View Post

Chairman Mao has released his goons and cronies to lay the smackdown on those who infringe on the People's Republic of Apple technologies. Seek and destroy!

Chairman Mao has been dead for sometime now. You might be surprised to know that Apple does a lot of business in the PRC.
無心 The idea of wilderness needs no defense, it only needs defenders., Wilderness is not a luxury but a necessity of the human spirit__Edward Abbey
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無心 The idea of wilderness needs no defense, it only needs defenders., Wilderness is not a luxury but a necessity of the human spirit__Edward Abbey
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post #13 of 121
Quote:
Originally Posted by extremeskater View Post

For a company with a 40 billion dollar war chest it took them a long time to shutdown a bunch of guys in garage. No wonder HTC and Nokia aren't exactly running scared.

Yeah.. because Apple was the one setting the court dates not the judge
post #14 of 121
Quote:
Originally Posted by anantksundaram View Post

Go Apple!

Seems to me that Apple learned lessons from the Mac GUI back in the 1980s and therefore they are not doomed to see history repeat itself. They've once again re-invented the UI of a major electronic device, but this time Apple will be the ones to fully monetize this valuable innovation. So you got it right: Go Apple!
post #15 of 121
Quote:
Originally Posted by screamingfist View Post

apple really doesn't want to get into a 'multitouch' legal nightmare. they will have their patent invalidated. this is just scare tactics. if they proceed this could really back fire.

Only if you take them as literal "multi-touch" ability. It is more than likely, especially based on some of the patents floating around (and the ones in the war-chest from 1999+ when they bought that multi-touch company), that these patents will be related to gestures and specific interactions with the device through the use of multi-touch.

For one, I'd expect the whole keyboard "pop-up letter" thing to be one of their patents along with the concept of adaptive hit-zone resizing dependant upon previous characters typed etc.

The company Apple bought had been in the multi-touch game for a very long time, before Jeff Han (or whatever his name is) was demoing his stuff.
post #16 of 121
Apple planned this all along. Wow, are they ever clever.
post #17 of 121
Quote:
Originally Posted by chronster View Post

So I guess they're pretty confident that the multi-touch stuff was ripped off directly from their code.

That would be a copyright issue, not patent.

A patent would be on the method of doing something, and therefore enforceable should it be done the same way, but with different code to Apple's.
post #18 of 121
Quote:
Originally Posted by NasserAE View Post

Yeah.. because Apple was the one setting the court dates not the judge

Liberal quoting negates the value of the ignore list.
post #19 of 121
Quote:
Originally Posted by screamingfist View Post

apple really doesn't want to get into a 'multitouch' legal nightmare. they will have their patent invalidated. this is just scare tactics. if they proceed this could really back fire.

You do know that Apple bought Fingerworks and all of their patents, do you ?>
The world belongs to who wants it , now who deserves it.
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The world belongs to who wants it , now who deserves it.
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post #20 of 121
Quote:
Originally Posted by chronster View Post

For instance, copy and paste. It's handled different than in WM, but the outcome is the same.

You further demonstrated your misunderstanding of patents. The outcome is irrelevant, it's the how it's handled (implemented) that matters.

I will also say, I am no patent lawyer, or even a lawyer for that matter.
post #21 of 121
Quote:
Originally Posted by RCO3 View Post

Liberal quoting negates the value of the ignore list.

I never use ignore lists. I prefer to choose to reply or not to
post #22 of 121
Quote:
Originally Posted by tawilson View Post

You further demonstrated your misunderstanding of patents. The outcome is irrelevant, it's the how it's handled (implemented) that matters.

I will also say, I am no patent lawyer, or even a lawyer for that matter.

Well I said I was fuzzy about the whole thing. Could you be more clear about what you mean by "how it's handled"? Are you talking about how the developers got from point a to point b, or how the code is used in the OS?
post #23 of 121
Quote:
Originally Posted by chronster View Post

Well I said I was fuzzy about the whole thing. Could you be more clear about what you mean by "how it's handled"? Are you talking about how the developers got from point a to point b, or how the code is used in the OS?

No worries, again from the way I understand it...

I'll use an example for sorting. There are numerous ways in which you can go about sorting things.

If I had a patent on Bubble-sorting, then nobody would be allowed to sort data that way without licensing it from me.

How ever they would be free to implement there own completely different method of sorting.


Searching is another example, forever people would search strings of text from the beginning which would involve checking every character.

However, some bright spark figured out that it would be more efficient and a hell of a lot faster to search backwards, as you can then skip "upto" the length of the search term each time. If they'd patented that reverse search method, then nobody else could search that way without licensing.

The exact code and end result are irrelevant, it's what the code does that is the important bit.
post #24 of 121
Quote:
Originally Posted by RCO3 View Post

Liberal quoting negates the value of the ignore list.

Ignore Lists don't work as they should to begin with. Little point in using them. Everyone should instead be a mensch and deal with posts as they come. Those that are truly disruptive will be dealt with by the mods in due course anyway.
post #25 of 121
Quote:
Originally Posted by extremeskater View Post

For a company with a 40 billion dollar war chest it took them a long time to shutdown a bunch of guys in garage. No wonder HTC and Nokia aren't exactly running scared.

Most of that was legal wrangling with a company that did not exactly understand what they were up against. It takes lots of time and money to fight a multitude of (however misguided) legal chaff. This new strategy is a reasonable move for Apple - if they can stop these in advance it's less legal wrangling that has to be done after the infringement for many more dollars.
post #26 of 121
Quote:
Originally Posted by chronster View Post

So I guess they're pretty confident that the multi-touch stuff was ripped off directly from their code.

I keep thinking of all the things an iphone does that's common among devices that existed before it, and it seems like someone could loosely apply the same logic to Apple. For instance, copy and paste. It's handled different than in WM, but the outcome is the same. If multi-touch was handled differently, but the outcome is the same, and Apple sues, then this logic could be twisted on them. That's why I think they're confident in knowing they were directly ripped off.

I'm still fuzzy on whether or not the final outcome of code is what a company can be taken to court over, or the actual code it's self (being a complete ripoff.)


there is most likely some mathematical algorithm behind the iPhone multi-Touch and you can patent that. if Google or HTC used the same algorithm then it's fair game for a lawsuit.
post #27 of 121
Quote:
Originally Posted by anantksundaram View Post

Nonsense. Saber-rattling is non-credible unless you can back it up with action.

The danger in patent infringement suits is that the original patent can end up invalidated, for any number of reasons. And from what I have seen of Apple's patents and recent patent applications, the danger is very real to them. They seem to try to patent stuff which is not novel, IMO.

Generally, it is better to license than to sue, for this and many other reasons.

It is telling that Apple sued tiny HTC, rather than the companies it relies upon for IP licenses. Litigation is rarely the best strategy - it is like war, where even the winners often lose in the long run. While war is a failure of diplomacy, litigation is a failure of negotiation.

I predict that the HTC suit will never reach trial. I predict that HTC will be aided by the company with the most to lose, which is Google. I predict that Apple will see that it needs Google more than it needs HTC to stop, and that realization will lead to a negotiated solution that works for everybody.
post #28 of 121
Apple might have a 40 billion dollar war chest, they are not Bruce Lee and can take down everyone just yet.

So once Apple takes a hit in their pocketbook, the others will close in for the kill.

My suspects is Google is not backing up HTC with legal funds like Microsoft said it would with their partners.


This corporate warfare thing reminds me of a herd of deer. The young bucks compete and fight each other, hoping to get strong enough one day to take down the head buck and rule the herd.
post #29 of 121
This is great.
Where's the popcorn? I can't wait to see how this unfolds.
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Never quote idiots, they just clog up...
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post #30 of 121
Quote:
Originally Posted by delreyjones View Post

Seems to me that Apple learned lessons from the Mac GUI back in the 1980s

Maybe, but the look-and-feel claims were rejected by the court. I think this is more likely informed by the Quicktime/Video for Windows debacle. I forget the precise details, but Apple outsourced porting chunks of the Mac OS to Windows so Quicktime could run, and the company that did that work later reused some of that technology in Video for Windows. It was an ugly, ugly mess that took years to settle.

I think Apple's actions are those of a company that wants to avoid getting completely screwed over, and so they're drawing a hard line to prevent it from getting to that point.

Not unreasonable, seems to me.
post #31 of 121
Quote:
Originally Posted by jahonen View Post

Apple's cash is about 24B, 200B market cap.

Your numbers for cash are out of date -- they had over $24 billion in 2008. From the most recent quarterly report, Apple has $39.8 billion in cash and short and long term securities.
post #32 of 121
Quote:
Originally Posted by tawilson View Post

No worries, again from the way I understand it...

I'll use an example for sorting. There are numerous ways in which you can go about sorting things.

If I had a patent on Bubble-sorting, then nobody would be allowed to sort data that way without licensing it from me.

How ever they would be free to implement there own completely different method of sorting.


Searching is another example, forever people would search strings of text from the beginning which would involve checking every character.

However, some bright spark figured out that it would be more efficient and a hell of a lot faster to search backwards, as you can then skip "upto" the length of the search term each time. If they'd patented that reverse search method, then nobody else could search that way without licensing.

The exact code and end result are irrelevant, it's what the code does that is the important bit.

So lets say Apple's multi-touch works with two x y coordinates, while Google's code works with a line drawn between two spots pressed on the screen (working with the line's angle and length to calculate positioning) then Google gets pinch to zoom working in their photo app. The code does different things to make multi-touch work. Is this still a patent issue?

I only ask because when it comes down to it, especially in software engineering, there can be 100 different ways to get to the same result as someone else. I always thought that same result is what was being contested.

Good thing I'm not running a company making stuff like this. I'd be sued before I could get a product out of the door
post #33 of 121
Quote:
Originally Posted by NasserAE View Post

I never use ignore lists. I prefer to choose to reply or not to

You still don't have to be lazy and quote the entire post of an obvious troll.
post #34 of 121
Even if Apple ultimately doesn't win its patent cases, they do get the advantage of spreading fear, uncertainty, and doubt about their competitors. If they are able to delay competing products or cause competitors to limit the functionality of those products, then this strategy is probably worth it because it gives Apple more time to build marketshare. There will come a point in time where Apple's scale advantages are so large that even if their patents are invalidated, they will be almost invulnerable (assuming they continue to innovate and offer products at least as good as the competition). Ultimately economic advantages are more important than legal advantages.
post #35 of 121
Quote:
Originally Posted by extremeskater View Post

For a company with a 40 billion dollar war chest it took them a long time to shutdown a bunch of guys in garage. No wonder HTC and Nokia aren't exactly running scared.

It is doubtful that HTC or Nokia would declare bankruptcy as a delaying tactic, as Psystar did.
post #36 of 121
Quote:
Originally Posted by delreyjones View Post

Seems to me that Apple learned lessons from the Mac GUI back in the 1980s and therefore they are not doomed to see history repeat itself. They've once again re-invented the UI of a major electronic device, but this time Apple will be the ones to fully monetize this valuable innovation. So you got it right: Go Apple!

Well said!
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post #37 of 121
Quote:
Originally Posted by jahonen View Post

Apple's cash is about 24B, 200B market cap.

Google about 24B (178B cap), MSFT about 33B in cash (250B cap). Nokia's cash figures I couldn't find in 3 minutes, but their market cap is 50B.

--update--
Nokia's cash seems to be 12B if I read forbes correctly (but that's not necessarily the same data as the other results from yahoo finance. Interesting is Nokia and Apple comparison from Forbes: Total current Assets: 33,8B and 33,5B respectively.

So there's a few Gargantuan "who specifically"s.

Regs, Jarkko

And just where did you come up with 24 billion in cash? All financial reports, and at Apple's own shareholder meeting, the amount was more like 40 billion.
post #38 of 121
One of the things Apple patented was the concept of multi-touch.
That is the idea that using more than one touch point to carry out an action.
As an example the pinch / zoom action using two fingers is an Apple patent.
Not how the software does it, not the code, but the actual act of using two points to zoom in and out of an image / screen. Apple patented this, and if someone else does that then they break the patent regardless of the software used to do it. It is the same with the sweep of the finger to unlock the phone, it is an Apple patent, they came up with it first and therefore is another phone does it then they are stealing the idea.
post #39 of 121
Quote:
Originally Posted by AppleInsider View Post

Before Apple publicly sued HTC, the iPhone maker has privately had "blunt conversations" with other smartphone companies that have proven disruptive to the roadmaps of would-be iPhone killers, according to a new report. ...

The thing I find most interesting about this information is that the day the patent suit was revealed, HTC said something to the effect of how they didn't see this coming, they were taken completely by surprise, had no idea, etc...

If this report is true, then at least we know that was total BS.
post #40 of 121
Quote:
Originally Posted by iStud View Post

I'm sure you are an expert in patent law, right

no, but the 2 guys who apple hired and did 'multitouch' developed the technology at university and it looks like the university may actually hold the patents.
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