Apple, Samsung Should Respect Their Peers

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AppleAAPL
and
SamsungSSNLF
are embroiled in dozens of patent lawsuits worldwide. If the two firms had shown each other a little more respect, they might have been able to avoid some (if not all) of these suits -- and save billions in legal fees. After all, it's not as if Apple has gotten to cash its first
patent victory check
. With appeals and
judge-ordered reductions
, Apple may never see payment. And if it does, the fee could be greatly reduced. Meanwhile, Apple and Samsung continue to spend billions of dollars in annual legal fees. According to the
New York Times
, both companies spend more on their patent lawsuits against each other than they do on research and development. This may send the wrong message to analysts and investors who are already concerned that Apple and Samsung have
lost their way
. "I don't know how they got trapped into the spiral that they're in at the moment," Bill Coughlin, President and CEO of
Ford
F
Global Technologies, told Benzinga. "So far we've avoided it. The company -- the auto industry in general -- is pretty proud of being able to trade independently and the solutions that we have are truly independent and don't tread on others. Even though they may provide a very similar feature, it's just done in a different way."
Related:Is Ford Open To More Startup And Technology Acquisitions?
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Coughlin said that Ford has a good relationship with the intellectual property legal teams of other automakers. "We try to make sure we're on good terms," said Coughlin. "We can reach out to each other, we can solve problems," and find a solution before things get out of hand. "One day, some other company is going to be infringing your patents," Coughlin added. "Maybe next year, God forbid you find out that you're inadvertently infringing one of theirs or several of theirs. How you treat each other in these situations can make a big difference. Our philosophy is to treat everybody like we would want to be treated if we were standing in their shoes." When Ford approaches another firm about a licensing deal, Coughlin explains how the company arrived at the fee that it is asking for the patent license. In turn, he asks that other automakers will do the same if Ford inadvertently infringes on another firm's patents -- instead of filing a lawsuit. "This goes a long way," said Coughlin. He added that Ford always tries to treat its competitors with respect. In return, its competitors have been much more respectful to Ford.
Enriched Lawyers
"In general, litigation enriches the lawyers," Coughlin said of the ongoing patent disputes between tech companies. "Being a lawyer, it's nice -- you tend to win either way. But it doesn't really help the company." Litigation drains company resources, and that's not all. Coughlin worries that it can be a distraction from more important matters. Instead of focusing on the business, executives are forced to deal with a lawsuit.
Related:Ford Acquires Livio To Enhance In-Car Connectivity
"You look at Apple or Samsung at the moment -- or Android versus everybody else, really -- winning in that context (through litigation) is not the best way to get the right value for what you created," said Coughlin. "You've got to find a cool head on the other side to try and reach out and stop the madness." Coughlin joked that it was easy for him to say this because Ford is not currently involved in one of these "dramatic fights." "Intellectual property tends to be an emotional situation when you feel like your precious baby has just been stolen by an arch competitor," said Coughlin. "That's pretty tough because you have to calm down and talk it through and hopefully people will be rational on both sides." With so many cases around the world, Coughlin thinks that it could be difficult for one company to be an "absolute, knock-out, clear winner." "There's too much litigation going on," he added.
Licensing Fees Add Up
While Coughlin would not reveal how much revenue Ford earns by licensing its patents, he did say that Ford is a "little unusual" in the sense that it will license to any firm so long as there is a compelling business case. "Have we built a very nice licensing business? The answer is yes," said Coughlin. "Is it growing? Again, the answer is yes -- even in tough times it was growing. So we've done well, and my hope is to continue to be responsible, grow the business, [and] help the industry move towards a little bit more openness to licensing each other." Ford Global Technologies was one of the founding members of
AutoHarvest
, an online community that helps automakers, suppliers, universities and government labs, etc., share and license technology within the industry. "We don't want to be in a situation -- I don't think it's helpful -- for people to want to license out but not license in," said Coughlin. "So we're open to licensing to competitors." Thus, if a competitor comes to Ford and makes an offer, Coughlin is more than willing to investigate. "If it's useful to Ford to provide to our customers, I'm happy to pay for something that actually adds value," he said. Disclosure:
At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
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Posted In: NewsLegalManagementTechAppleBill CoughlinFordFord Global TechnologiesSamsung
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