I don't think it is safer. If anything, it's more risky.
The thinking is, and it's widely held, that building a consumer brand is harder than building a B2B brand. If Huawei for example came out with a tablet I would associate it with the cheap and unreliable router that I received with my ADSL supplier, and be unlikely to buy it. In order to convince me that they were a serious maker of quality products Huawei would have to spend a lot of money on advertising to build brand, as well as producing a lot of high quality products which would have to be sold at low quality product prices to build brand awareness.
This is why people drink Coca-Cola and not some generic Cola, why we spend money on branded clothes, why we happily pay more for German cars than Japanese Cars, etc etc
That acts as a barrier to entry for new competitors who have to approach the same brand value before they can demand the same margin on their products.
Samsung's $8 Billion plus business with Apple with be $0. I stated that the moment the original patent suit was filed and it's turning out to reveal itself.
Samsung was screwed no matter how this turned out. Apple had two sticks to use, the lawsuit itself, and the threat of pulling production from them. Samsung couldn't retaliate by pulling supply, they can't afford it. The threat of blocking imports into Korea was laughable - given the tradeoff of blocking Samsung in the US and potentially elsewhere, vs. Apple in Korea, who cares?
Apple picked the right target. If Samsung loses the suit or folds due to pressure, Apple then has the legal ammo to go against anyone else. Only in the case that Samsung wins the trade dress suit does Apple come up empty. And given this news report, it looks like that probability just went to zero.
Revenue from chip manufacturing is far lower than that from making devices unless you're Intel? Are you sure?
That should be so obvious that I can't believe anyone would argue the point.
Devices have chips in them. The devices also have other components, direct manufacturing costs, indirect manufacturing costs, and the manufacturers hopefully get a profit. So, no matter WHAT the chips cost, the total device must cost more - so the revenue from device manufacturing MUST be greater than the revenue from chip manufacturing.
Why would you want to argue such an obvious point?
Quote:
Originally Posted by blackbook
Each phone still sells for $300-400. If the phone cost $100 to make even after licensing they're probably still making a tidy profit per phone. Making high end devices is a profitable business. With all the competition in the chip business they have to keep costs low or else lose contracts to other chip manufactures, which is what cloudgazer was eluding to. I never said the chip business was a loss for Samsung, I said devices have far higher margins.
You've managed to demonstrate that you don't have a clue what you're talking about. Who says that a $3-400 phone costs $100 to make? Please name a single phone manufacturer who gets a 66-75% gross margin.
As for making high end devices being a profitable business, that's not always true. A number of phone manufacturers are losing money, breaking even, or making tiny profits.
As for making high end devices being a profitable business, that's not always true. A number of phone manufacturers are losing money, breaking even, or making tiny profits.
That's true of course but there is some evidence that they're losing the money on the dumb-phone segment. The advent of android has returned even the basket cases of Moto & S-E to kinda-sorta--profitable.
What's interesting about the handset market is it is a weird hybrid of a B2C business and a B2B business. Dumb-phones are very B2B, carriers can and do buy handsets from no brand chinese makers and ship them under their own mark. Orange in the UK was one of the first to start that trend here, I think Verizon do it in the US. I believe HTC got their start as a maker of such no-name phones.
The smart-phone market seems to be much more B2C, and the tablet market is pretty much completely B2C.
You've managed to demonstrate that you don't have a clue what you're talking about.
All smartphones cost between $100-200 based on materials used to build them (see iSuppli) and most of those phones sell retail between $300-700. But with licensing, research, and development cost per phone, margins are much smaller than the 60-70% rate that they appear to be when you look only at material costs.
Proof Samsung is pursuing higher profit margins in the device business can be seen with their galaxy tab and the upcoming Chromebooks. Those products have a materials bill of only $200 and Samsung sells them retail for $500.
Apple is not the only one playing the high margins game anymore.
It may be worth remembering that when the dust settled, Apple wound up paying Nokia..
Yikes I forgot! Seriously everybody knows that, but that doesn't mean they didn't come out of that fight with some important tactical victories. Every time a patent survives a fight it makes it easier to claim that invalidation is unlikely.
Quote:
Originally Posted by Apple's motion
The ’381 patent survived reexamination over all of Nokia’s identified prior art. Nokia,which was in litigation with Apple, was highly motivated to uncover the best prior art and undoubtedly conducted an exhaustive prior art search. Nevertheless, eleven months after Apple first asserted the ’381 patent against Nokia, and more than six months after the reexamination petition was filed, Nokia relied on the same prior art in its November 2010 invalidity contentions.(Zhang Decl. Ex. 41.) Because the claims were confirmed during reexamination over the strongest known prior art, there is an even greater likelihood that Apple will prevail on invalidity challenges at trial.
Quote:
Originally Posted by MacRulez
Personally, I wouldn't be confident describing trade dress complaints as "simple".
I didn't, I said that design patents were 'relatively simple' compared to utility patents. Trade Dress is actually something else again, doesn't require patents at all, and is indeed very complicated because it's linked to the market presence of the product in hard to define ways.
Quote:
And in Apple's case, the nature of their complaint explicitly extends the issues they raise from branding confusion to usability, a form a utility which may trigger the functionality doctrine, in addition to having the burden of demonstrating consumer confusion over branding:
They don't have to demonstrate customer confusion in this motion - that would be for Trade Dress, which this isn't using as an attack. Design Patents don't require confusion, they just require copying of a design. Apple never even mentions confusion in this motion.
The issue of functionality is genuine but there are plenty of elements here that aren't functional - the idea that aesthetics constitute function (duetsblog) is laughable. It's very hard to make a functional claim on phones for large margins at the top and bottom for example.
Your second link is again not relevant to the latest case - it's about Trade Dress and this last (and arguably most significant ) motion isn't.
Samsung makes far more money on one Galaxy tab than it does selling dozens of parts to Apple, answering the question implied by _Hawkeye_'s comment, "Pennywise and pound/dollar-foolish on Samsung's part. Just plain stupid.".
But it dosen't sell very many Galaxy Tab's, relative to iPads.
That "greater likelihood" is Apple's opinion, not the court's.
Correct, but it seems a fairly popular approach in the IP lawsuit world, pick an enemy to fight against with a patent who is either weak or against whom you have leverage. Get them to the point that they stop fighting your patent, then use that as an argument that your patent is strong. Apparently this plays with courts - I can't remember the place I first read about it - possibly the big drama that surrounded the LASER patents.
In the long run of course such 'precedent' may not actually defend the patent from invalidation, but it may mean that an inportant early case goes against the supposed infringer, forcing them to settle.
Quote:
I stand corrected, though it's worth noting that 7,469,381, the only one you provided alleged precedence for, is a utility patent.
Yes, my point here is that I believe Apple may be trying to use the 3 design patents as leverage over Samsung to get Samsung to pay on all 4 - thus further strengthening the Utility Patent. With Nokia 'accepting' the patent and Samsung actually licensing it, Apple will be able to get injunctions against HTC and friends even more easily.
Quote:
Take a gander at Apple's definitions for the design patents:
...
Rounded corners, thin form factors, and buttons below the display? They grant patents for that sort of thing?
You kinda have to include the huge TIFF images that go along with those descriptions, I'd link to them but Quicktime is spazzing out and not showing them for me, but they are there. Design patents aren't something apple made up, they're an entire category at the patent office (hence the D prefix). Their entire purpose is to define shape, form and look - but not function. There are lots of ways that Samsung could have detailed their device that would have made it non-infringing - they only need to move the button to the side, or give it a subtle bezel or making the corners much more pointed, or making the back as flat as the front, or adding significant ornamentation to the margins, ..... They only needed one material difference from the patent.
Samsung didn't do those things of course because it wanted the 10.1 to look like an iPad.
Quote:
But given their breadth, it would be interested to hear from the other readers here how they would feel about such definitions if they were asserted against Apple by another company.
If Apple's designers get that lazy they deserve to be sued.
Quote:
. I'm happy to let the court decide, and if things stay on course we should have an answer by Aug. 5.
It will definitely be an interesting few weeks, we get the Q3 numbers at the end of July, then maybe this Samsung thing getting a definite answer, hopefully some movement on the Lodsys issue, lots of news for me to obsess about
Understood, but the value of things like thin form factors and rounded corners are quite practical, arguably even obvious, in terms of utility. Why even bother patenting such things if they didn't contribute to the product's ergonomic usability?
Suppose I made a design patent for a tablet, I stipulate a 4:3 rectangular screen, a thin form factor, and a very specific silver paisley pattern on the margin. Now just because the patent contains some function (the screen) and some ergonomic stuff (the form factor), doesn't detract from the fact that the patent as a whole doesn't cover function. ie. one can make a device with EXACTLY the same function without violating the patent by just skipping the paisley.
In this instance Apple would contend that it's aggresively unadorned design is as distinctive as my hypothetical silver paisley. That samsung could have changed the shape of the back for example, that they could even have done so in a way that increased ergonomics - maybe making the edges bulge a little, or using a textured bezel.
Quote:
But as a lay person on the sidelines with a bag of popcorn in this Apple vs Samsung vs Apple case, I find myself incredulous that elements of fundamental utility are granted protection as something entirely different, as design alone, mere fashion.
Patents don't protect elements, they protect the entire thing. You can copy the elements of a claim, you just can't copy ALL the elements. One of the main uses of design patents is to protect fonts. Obviously every latin font has enormous simularity to every other latin font. An 'A' needs to look somewhat like an 'A' or it's not much use. The nature of the font probably impacts readability but that doesn't stop design patents being used because readability isn't considered the function here - the function is expressing language.
Quote:
My TV set has rounded corners, a thin form factor, and a black border. Is it next?
If it's anything like my (samsung) TV it has a bulging back that definitely doesn't gently curve into the edges. Also it probably has a bezel. Your TV can rest easy, at least from this patent. My Samsung TV also has a red LED at the bottom and the black glass bezel is clear at the edge, with a small area of patterned red in the space between them. There are a number of LEDs at the bottom right which light on powering, all again red. That's all without getting into what it looks like from the back.
I would love to see a professinoal designer's take on this. I suspect a lot of why these designs seem generic to us is that we've grown so inured to the ubiquity of the objects that we've stopped seeing the details.
Comments
And Bulldozer will truly piss of Intel.
Yeah, they spent to much money developing Sandy Bridge.
Investing less and they'd still beat out bulldozer :> (yep, bulldozer is really awfull
I don't think it is safer. If anything, it's more risky.
The thinking is, and it's widely held, that building a consumer brand is harder than building a B2B brand. If Huawei for example came out with a tablet I would associate it with the cheap and unreliable router that I received with my ADSL supplier, and be unlikely to buy it. In order to convince me that they were a serious maker of quality products Huawei would have to spend a lot of money on advertising to build brand, as well as producing a lot of high quality products which would have to be sold at low quality product prices to build brand awareness.
This is why people drink Coca-Cola and not some generic Cola, why we spend money on branded clothes, why we happily pay more for German cars than Japanese Cars, etc etc
Samsung is currently rated the 67th most valuable brand http://www.millwardbrown.com/librari...hart.sflb.ashx
That acts as a barrier to entry for new competitors who have to approach the same brand value before they can demand the same margin on their products.
Samsung's $8 Billion plus business with Apple with be $0. I stated that the moment the original patent suit was filed and it's turning out to reveal itself.
Samsung was screwed no matter how this turned out. Apple had two sticks to use, the lawsuit itself, and the threat of pulling production from them. Samsung couldn't retaliate by pulling supply, they can't afford it. The threat of blocking imports into Korea was laughable - given the tradeoff of blocking Samsung in the US and potentially elsewhere, vs. Apple in Korea, who cares?
Apple picked the right target. If Samsung loses the suit or folds due to pressure, Apple then has the legal ammo to go against anyone else. Only in the case that Samsung wins the trade dress suit does Apple come up empty. And given this news report, it looks like that probability just went to zero.
Maury
Revenue from chip manufacturing is far lower than that from making devices unless you're Intel? Are you sure?
That should be so obvious that I can't believe anyone would argue the point.
Devices have chips in them. The devices also have other components, direct manufacturing costs, indirect manufacturing costs, and the manufacturers hopefully get a profit. So, no matter WHAT the chips cost, the total device must cost more - so the revenue from device manufacturing MUST be greater than the revenue from chip manufacturing.
Why would you want to argue such an obvious point?
Each phone still sells for $300-400. If the phone cost $100 to make even after licensing they're probably still making a tidy profit per phone. Making high end devices is a profitable business. With all the competition in the chip business they have to keep costs low or else lose contracts to other chip manufactures, which is what cloudgazer was eluding to. I never said the chip business was a loss for Samsung, I said devices have far higher margins.
You've managed to demonstrate that you don't have a clue what you're talking about. Who says that a $3-400 phone costs $100 to make? Please name a single phone manufacturer who gets a 66-75% gross margin.
As for making high end devices being a profitable business, that's not always true. A number of phone manufacturers are losing money, breaking even, or making tiny profits.
As for making high end devices being a profitable business, that's not always true. A number of phone manufacturers are losing money, breaking even, or making tiny profits.
That's true of course but there is some evidence that they're losing the money on the dumb-phone segment. The advent of android has returned even the basket cases of Moto & S-E to kinda-sorta--profitable.
What's interesting about the handset market is it is a weird hybrid of a B2C business and a B2B business. Dumb-phones are very B2B, carriers can and do buy handsets from no brand chinese makers and ship them under their own mark. Orange in the UK was one of the first to start that trend here, I think Verizon do it in the US. I believe HTC got their start as a maker of such no-name phones.
The smart-phone market seems to be much more B2C, and the tablet market is pretty much completely B2C.
You've managed to demonstrate that you don't have a clue what you're talking about.
All smartphones cost between $100-200 based on materials used to build them (see iSuppli) and most of those phones sell retail between $300-700. But with licensing, research, and development cost per phone, margins are much smaller than the 60-70% rate that they appear to be when you look only at material costs.
Proof Samsung is pursuing higher profit margins in the device business can be seen with their galaxy tab and the upcoming Chromebooks. Those products have a materials bill of only $200 and Samsung sells them retail for $500.
Apple is not the only one playing the high margins game anymore.
It may be worth remembering that when the dust settled, Apple wound up paying Nokia..
Yikes I forgot! Seriously everybody knows that, but that doesn't mean they didn't come out of that fight with some important tactical victories. Every time a patent survives a fight it makes it easier to claim that invalidation is unlikely.
The ’381 patent survived reexamination over all of Nokia’s identified prior art. Nokia,which was in litigation with Apple, was highly motivated to uncover the best prior art and undoubtedly conducted an exhaustive prior art search. Nevertheless, eleven months after Apple first asserted the ’381 patent against Nokia, and more than six months after the reexamination petition was filed, Nokia relied on the same prior art in its November 2010 invalidity contentions.(Zhang Decl. Ex. 41.) Because the claims were confirmed during reexamination over the strongest known prior art, there is an even greater likelihood that Apple will prevail on invalidity challenges at trial.
Personally, I wouldn't be confident describing trade dress complaints as "simple".
I didn't, I said that design patents were 'relatively simple' compared to utility patents. Trade Dress is actually something else again, doesn't require patents at all, and is indeed very complicated because it's linked to the market presence of the product in hard to define ways.
And in Apple's case, the nature of their complaint explicitly extends the issues they raise from branding confusion to usability, a form a utility which may trigger the functionality doctrine, in addition to having the burden of demonstrating consumer confusion over branding:
http://www.duetsblog.com/2011/04/art...honey-baloney/
http://www.eckertseamans.com/uploads...ns/traded1.htm
They don't have to demonstrate customer confusion in this motion - that would be for Trade Dress, which this isn't using as an attack. Design Patents don't require confusion, they just require copying of a design. Apple never even mentions confusion in this motion.
The issue of functionality is genuine but there are plenty of elements here that aren't functional - the idea that aesthetics constitute function (duetsblog) is laughable. It's very hard to make a functional claim on phones for large margins at the top and bottom for example.
Your second link is again not relevant to the latest case - it's about Trade Dress and this last (and arguably most significant ) motion isn't.
Samsung makes far more money on one Galaxy tab than it does selling dozens of parts to Apple, answering the question implied by _Hawkeye_'s comment, "Pennywise and pound/dollar-foolish on Samsung's part. Just plain stupid.".
But it dosen't sell very many Galaxy Tab's, relative to iPads.
That "greater likelihood" is Apple's opinion, not the court's.
Correct, but it seems a fairly popular approach in the IP lawsuit world, pick an enemy to fight against with a patent who is either weak or against whom you have leverage. Get them to the point that they stop fighting your patent, then use that as an argument that your patent is strong. Apparently this plays with courts - I can't remember the place I first read about it - possibly the big drama that surrounded the LASER patents.
In the long run of course such 'precedent' may not actually defend the patent from invalidation, but it may mean that an inportant early case goes against the supposed infringer, forcing them to settle.
I stand corrected, though it's worth noting that 7,469,381, the only one you provided alleged precedence for, is a utility patent.
Yes, my point here is that I believe Apple may be trying to use the 3 design patents as leverage over Samsung to get Samsung to pay on all 4 - thus further strengthening the Utility Patent. With Nokia 'accepting' the patent and Samsung actually licensing it, Apple will be able to get injunctions against HTC and friends even more easily.
Take a gander at Apple's definitions for the design patents:
...
Rounded corners, thin form factors, and buttons below the display? They grant patents for that sort of thing?
You kinda have to include the huge TIFF images that go along with those descriptions, I'd link to them but Quicktime is spazzing out and not showing them for me, but they are there. Design patents aren't something apple made up, they're an entire category at the patent office (hence the D prefix). Their entire purpose is to define shape, form and look - but not function. There are lots of ways that Samsung could have detailed their device that would have made it non-infringing - they only need to move the button to the side, or give it a subtle bezel or making the corners much more pointed, or making the back as flat as the front, or adding significant ornamentation to the margins, ..... They only needed one material difference from the patent.
Samsung didn't do those things of course because it wanted the 10.1 to look like an iPad.
But given their breadth, it would be interested to hear from the other readers here how they would feel about such definitions if they were asserted against Apple by another company.
If Apple's designers get that lazy they deserve to be sued.
. I'm happy to let the court decide, and if things stay on course we should have an answer by Aug. 5.
It will definitely be an interesting few weeks, we get the Q3 numbers at the end of July, then maybe this Samsung thing getting a definite answer, hopefully some movement on the Lodsys issue, lots of news for me to obsess about
Understood, but the value of things like thin form factors and rounded corners are quite practical, arguably even obvious, in terms of utility. Why even bother patenting such things if they didn't contribute to the product's ergonomic usability?
Suppose I made a design patent for a tablet, I stipulate a 4:3 rectangular screen, a thin form factor, and a very specific silver paisley pattern on the margin. Now just because the patent contains some function (the screen) and some ergonomic stuff (the form factor), doesn't detract from the fact that the patent as a whole doesn't cover function. ie. one can make a device with EXACTLY the same function without violating the patent by just skipping the paisley.
In this instance Apple would contend that it's aggresively unadorned design is as distinctive as my hypothetical silver paisley. That samsung could have changed the shape of the back for example, that they could even have done so in a way that increased ergonomics - maybe making the edges bulge a little, or using a textured bezel.
But as a lay person on the sidelines with a bag of popcorn in this Apple vs Samsung vs Apple case, I find myself incredulous that elements of fundamental utility are granted protection as something entirely different, as design alone, mere fashion.
Patents don't protect elements, they protect the entire thing. You can copy the elements of a claim, you just can't copy ALL the elements. One of the main uses of design patents is to protect fonts. Obviously every latin font has enormous simularity to every other latin font. An 'A' needs to look somewhat like an 'A' or it's not much use. The nature of the font probably impacts readability but that doesn't stop design patents being used because readability isn't considered the function here - the function is expressing language.
My TV set has rounded corners, a thin form factor, and a black border. Is it next?
If it's anything like my (samsung) TV it has a bulging back that definitely doesn't gently curve into the edges. Also it probably has a bezel. Your TV can rest easy, at least from this patent. My Samsung TV also has a red LED at the bottom and the black glass bezel is clear at the edge, with a small area of patterned red in the space between them. There are a number of LEDs at the bottom right which light on powering, all again red. That's all without getting into what it looks like from the back.
I would love to see a professinoal designer's take on this. I suspect a lot of why these designs seem generic to us is that we've grown so inured to the ubiquity of the objects that we've stopped seeing the details.