Should Apple be Allowed to Ban Old Samsung Products?
When Apple (NASDAQ: AAPL) decided to sue the world for patent infringement, the Mac maker had no idea that it would lead to a long and arduous string of international court battles. If the company had known that almost every victory would result in the ban of products that are 12 months old, Apple might have thought twice before taking action.
There is no going back, however. Apple is now embroiled in dozens of legal disputes all over the world. Instead of signing a simple agreement with its competitors (as it did with HTC), Apple's legal team will remain in court for the next several years.
In today's victory, Apple has successfully banned the sale of "some" Samsung products in the Netherlands after a Dutch court ruled that they infringed on Apple's patents. It is not known exactly what products are being taken off store shelves. According to Computerworld, the ban only affects products that run Android 2.2.1 or higher that do not use Samsung's proprietary photo gallery software. Samsung upgraded its older models -- including the Ace and the Galaxy S II -- after a Dutch court banned the sale of those products last year. Newer Samsung phones, such as the Galaxy S III, also contain the new software.
Thus, the best Apple can hope for is a ban on old products -- which is essentially what it got last year. The Galaxy S II was the only new item in the portfolio.
This is another area where patent law has failed the tech industry. By the time each legal dispute makes it to court, the (allegedly) infringing products are old news. If consumers are no longer buying these products in mass quantities, then any resulting ban is more of a public relations win than anything else.
Samsung stands to lose more than its reputation, however. The South Korean manufacturer has been ordered to reveal how much money it has made since June 27, 2011. The court will then decide how much of that profit must be paid to Apple.
In the event that Samsung continues to infringe on the patent, the company will be ordered to pay a penalty of 100,000 Euros ($129,000 in the U.S.) for every day of violation.
These penalties could prove to be a potent deterrent for future patent infringements. But that does not change the absurdity of the product ban. Even if Samsung did violate Apple's patents, it is pointless to ban the sale of a product that few consumers want or care about.
If the legal system moved faster, it might allow tech companies to ban patent-infringing products immediately after release. This would lead to a massive decline in sales for new products, which would be a far greater deterrent than any financial penalty that may come at a later date.
In addition to the ongoing legal troubles between Apple and Samsung, Nokia (NYSE: NOK) is now trying to stop Research In Motion (NASDAQ: RIMM) from selling most of its existing devices. RIM sales are declining, and BlackBerry 10 has been delayed multiple times and will not ship until next year. RIM shares are down more than 30 percent year-to-date. But Nokia still wants to ban the sale of old RIM devices -- which are selling poorly as consumers wait for the release of BB10 handsets -- in America.
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