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[Editorial] Smartphone suits

A week after Apple Inc. filed a patent lawsuit with a California court against Samsung Electronics, the latter came up with countersuits against Apple at courts in Korea, Japan and Germany. While the battle between the two global giants will cost both sides huge legal, the suits could generate enough consumer interests in the products of both parties to more than compensate the costs of litigation.

Samsung chairman Lee Kun-hee rather nonchalantly commented that his company was getting “hammered down as it is a protruding nail,” the initial reaction from Korea’s largest single manufacturer was a surprise. Samsung executives compared Apple’s legal action to “a well-used axe falling on the owner’s foot” as an old saying goes.

As is widely known, Samsung and Apple have maintained a close supplier-client relationship involving multibillion dollars in annual shipment of processor chips and a variety of parts and components. This year, Samsung was counting on overtaking Sony’s $5 billion sales in 2010 to Apple, considering the impact of the worst earthquake that hit Japan when the U.S. firm filed the suit with a U.S. federal court in San Jose, California, on April 15.

The wording of the suit was a mixture of ad copy and insults directed at the competition: “… Samsung has chosen to slavishly copy Apple’s innovative technology, distinctive user interfaces, and elegant and distinctive product and packaging design.” Apple was referring to the similarity between its iPhone and Samsung’s smartphone Galaxy S.

On the other hand, Samsung’s complaint with the Seoul Central District Court claimed that Apple’s iPhone and iPad violated five of its patents. Its suit with a Tokyo district court picked up two patent infringements and another with a Mannheim, Germany, court pointed to three alleged violations.

While industry watchers are excited by the spat between the two top producers of the hottest consumer item in today’s world, it is hoped that courts in the different continents could establish at least conceptual definitions of industrial copying. As in passenger car designs, innovators and market followers chase each other in smartphones, tablet PCs and other digital products. Legal action by key players should somehow work out differences between innovative improvement, imitation and counterfeiting.

Yet, the development of the global market particularly in the information technology industry has blurred the line between competition and cooperation. Very often, the line is crossed under a snap decision by the chief executive rather than through lengthy boardroom conferences. Steve Jobs and Samsung’s virtual No. 2 Lee Jae-yong have reportedly had negotiations for enhanced cooperation in design and supply of chips before the suits.

Many question whether Apple can totally sever ties with Samsung. At the moment, Apple would find it difficult to replace its chip supplier and would risk a huge rise in costs if it tried to do so. Both parties would no doubt want to end the dispute expeditiously, and they need to pursue an amicable settlement so as not to disrupt a growing market.
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