Samsung Fires Back After Apple Launches Patent Nuclear War; Sues Over Five Patents In Three Countries

from the what-a-waste dept

For a while, it really did seem like the patent "cold war" system was working. Big companies wouldn't sue other big companies out of fear of launching the patent nuclear war response, as the other big company would have a stack of patents of its own that it would use to countersue. Yet, recently, we're noticing more and more "nuclear" wars breaking out, with big companies suing other big companies... only to have the sued company find some patents and countersue. A lot of these patent wars seem to involve Apple. It's involved in suits and countersuits with HTC and Nokia (though, Nokia started that one). And, of course, with Apple's recent bizarre decision to sue Samsung for patent infringement, it was only a matter of time for the counterstrike.

Indeed, just days later, Samsung has countersued Apple for infringing on five of its patents. Of course, adding a bit of a twist to the usual script, Samsung has filed those lawsuits around the globe: one in South Korea, one in Japan and one in Germany. Of course, these sorts of battles should show how screwed up the patent system is today. None of these patents have anything to do with actual innovation. None of them represent something so amazing that it wouldn't have been created by someone anyway as a part of the natural progression of mobile phones. It's a bunch of basic ideas, locked up, which are now being used for big companies to sue each other... such that money can be diverted from any actual innovation to paying a bunch of lawyers.


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    Anonymous Coward, Apr 22nd, 2011 @ 3:08pm

    How predictable.

    Let the war begin.

     

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    Capitalist Lion Tamer (profile), Apr 22nd, 2011 @ 3:18pm

    Mutually Assured Destruction

    Thank god I still have control over my precious bodily fluids.

     

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    Jay (profile), Apr 22nd, 2011 @ 3:19pm

    Showing your cards

    So... Apple had two of a kind.
    Samsung has a three of a kind...

    And both of the companies' lawyers have a royal flush.
    Good job on a patent holocaust. Bets on WWI?

     

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    Ron Rezendes (profile), Apr 22nd, 2011 @ 4:02pm

    First there were the Free-tards and the Pay-tards,
    now we have the Sue-tards!

    Luckily no one in Hollywood or running a theater, can complain about piracy here - so grab your homemade popcorn, sit back and watch the show folks!

     

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      Anonymous Coward, Apr 22nd, 2011 @ 4:34pm

      Re:

      Who needs to pay extra for entertainment these days when simply laughing at the stupidity of our politicians and our broken legal system, and spending lots of time wondering how the heck did these people get elected, is entertaining enough. This is what's killing the entertainment industry. I no longer need to pay for entertainment, our politicians and legal system deliver it for free.

       

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    Alatar, Apr 22nd, 2011 @ 4:13pm

    Korea, Japan and Germany?

    Why none in East Texas? Heard retarded courts there almost always side with the agressor in patent cases.

     

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      Ccomp5950 (profile), Apr 25th, 2011 @ 12:59am

      Re: Korea, Japan and Germany?

      I'm a resident of Marshall Texas so this is something I'm always interested in (To borrow from Sarah Palin, I can see the court house from here (in my office)).

      East Texas is probably going to fall off the radar for a year or two since the judges here keep getting their hands slapped for turning down change of venue requests.

      Defendants have been pushing writs of mandamus which basically means the higher court tells the lower court to "Do your job, stupid". Or in this case to take the Change of Venue requests seriously. In Re Nintendo, In Re Hoffman-Le Roche, In Re Genetech, In Re Zimmer Holdings, and in November In Re Microsoft.

      This all pretty much started with In Re Volkswagon which was an interesting case. A vehicle accident occurred in Dallas Texas, the vehicle was purchased in Dallas, all relevant witnesses and documents were in Dallas, but the plaintiff filed suit here in Marshall, and the court refused the motion of transfer to Dallas.

      More reading...

      You know you screwed up when a higher court says "that the district court gave undue weight to plaintiff’s choice of venue, ignored our precedents, misapplied the law, and misapprehended the relevant facts,” and “the district court reached a patently erroneous result and clearly abused its discretion in denying the transfer.”

       

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    hmm (profile), Apr 22nd, 2011 @ 7:04pm

    well

    Can't samsung just stop producing LCDs for apple?

    Apple would then be dead in the water once its current stock ran out...no more screens / chips etc.....

    would take many months to source a new supplier....

    Samsung has apple by the round squishy things.....

     

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      Anonymous Coward, Apr 22nd, 2011 @ 8:11pm

      Re: well

      I suspect Apple probably thought of all that before they bothered to initiate their lawsuit, so they probably already have back up plans read to go in case something like this happens. That is, unless they're brain dead. Then again, this is a rather brain dead lawsuit that they're initiating.

       

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    Nicedoggy, Apr 23rd, 2011 @ 6:02am

    What happens when other companies start getting injunctions against American products will the government and companies still feel that IP laws are better when they are stronger.

    As far as I can tell Samsung has a good chance winning those battles in Europe and Asia, they could stop Apple from selling phones in those markets.

    Just ask Sony how that course of action was good for them in Europe.

     

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    DannyB (profile), Apr 23rd, 2011 @ 9:06am

    Live by the patent

    Die by the patent

     

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    Anonymous Coward, Apr 23rd, 2011 @ 7:23pm

    "Of course, adding a bit of a twist to the usual script, Samsung has filed those lawsuits around the globe: one in South Korea, one in Japan and one in Germany. "

    This is actually a pretty smart strategy. Since Apple is more of an American company, they probably have more leverage in American courts. Yet Samsung is more of an Asian country, so they have more leverage in that general region.

    I expect this sort of thing to happen more often. As other countries increasingly listen to the U.S. and adopt their own patent systems, companies in those countries who get sued by U.S. companies for infringement in the U.S. (in courts that U.S. companies have leverage in) will simply counter-sue those U.S. companies for infringement in their own native countries where they have leverage. If the U.S. wants to use patents to deny foreign competitors access to U.S. markets then those foreign competitors will simply use patents to deny the U.S. access to foreign markets.

    The very same patent system that the U.S. is persuading others to implement will be used to prevent U.S. companies from competing in other countries. If the U.S. expects foreign countries to implement a patent system favorable to the U.S., then U.S. is a little naive.

     

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    Anonymous Coward, Apr 23rd, 2011 @ 9:33pm

    Both Samsung and Apple are sitting on billions in cash. None of the products that either company makes takes that amount of money to produce. There is enough money to have patent nuclear war *and* still innovate. In this case, no money is diverted away from innovation and toward lawyers.

     

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      Mike Masnick (profile), Apr 24th, 2011 @ 11:42pm

      Re:

      Both Samsung and Apple are sitting on billions in cash. None of the products that either company makes takes that amount of money to produce. There is enough money to have patent nuclear war *and* still innovate. In this case, no money is diverted away from innovation and toward lawyers

      Um. Wow. So you think that the money they have just sits there and does nothing? This is wrong. All of that cash is *invested*, and assuming Apple and Samsung have semi-competent CFO types, you can bet its invested in ways that increase innovation.

      I'm sorry, but the statement you made may be one of the most ignorant statements I've seen in a long time. If the money didn't go towards this patent fight, you can bet it would be used on more innovative, and economically productive purposes.

       

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        Anonymous Coward, Apr 25th, 2011 @ 3:24pm

        Re: Re:

        "If the money didn't go towards this patent fight, you can bet it would be used on more innovative, and economically productive purposes."

        Prove it with more than your opinion. I never said that money was just sitting but both companies claim billions in cash and cash equivalents - feel free to check their balance sheets yourself. Plenty of money to innovate and still pay lawyers. The obvious proof of my point is that both Samsung and Apple are known for their innovative products. I own innovative products from both companies, products that have served me well. If a company has billions to invest on 'innovation' and they spend 2% on lawyers the net effect on 'innovation' is tiny. The cost of innovation is smaller than the available funds for the products that these companies make. Money alone does not drive innovation.

        What exactly is the relationship between dollars invested and innovative products produced? More money poured in is not always better. Invention is driven in part by constraints and invention is part of the innovation equation.

        Lawyers spend money too, how is paying lawyers any less economically productive than paying anyone else? As an R&D engineer am I more economically productive than a lawyer?

        There is no loss to innovation in this case. You are making that up. Its called believing your own bullshit.

         

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          Mike Masnick (profile), Apr 25th, 2011 @ 11:54pm

          Re: Re: Re:

          Prove it with more than your opinion.

          No need to prove what anyone with basic knowledge of economics knows. I can "prove" it by pointing you to an intro econ text.

          I never said that money was just sitting but both companies claim billions in cash and cash equivalents - feel free to check their balance sheets yourself. Plenty of money to innovate and still pay lawyers. The obvious proof of my point is that both Samsung and Apple are known for their innovative products.

          Wait, that may be the craziest claim I've heard in a while. Let me get this straight: as long as a company comes out with *some* innovative products, it's okay for them to waste money on dumb legal fights? Really? You really meant to say that? You can take it back.

          What exactly is the relationship between dollars invested and innovative products produced? More money poured in is not always better. Invention is driven in part by constraints and invention is part of the innovation equation.

          Wow. And now you take it to a new level. You're seriously claiming that perhaps these money wasting lawsuits will drive more innovation due to extra monetary constraints?

          This gets more inane each paragraph.

          Lawyers spend money too, how is paying lawyers any less economically productive than paying anyone else? As an R&D engineer am I more economically productive than a lawyer?

          Again, learn some economics. Learn the difference between economic growth and passing money around. Lawyers don't create economic growth. Companies do.

          Read your Romer.

          There is no loss to innovation in this case. You are making that up. Its called believing your own bullshit.


          Wow. Denialism and ignorance on display here. Please, learn some economics, so that we can have a serious discussion rather than what you spewed here.

           

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            Anonymous Coward, Apr 26th, 2011 @ 9:35am

            Re: Re: Re: Re:

            You are claiming that for every dollar invested there will be more innovation. That is wrong. There is no direct relationship between dollars invested and innovation produced. Your claims are nonsense. You seem to think that with just a few extra million that there would be vastly more innovation - that is just wrong. The fact is that your claims cannot be measured. Both companies are already very innovative, to say that a few million dollars would make them vastly more innovative is something you made up. The actual evidence shows that you are wrong.

            I did not claim that constraints due to law suits would drive innovation, but they could. Just as more money invested could but does not necessarily drive innovation. What I said was that there is no monetary constraint because there is already enough cash to pay for all of it without constraints.

            Producing products alone does not create economic growth. There has to be someone to buy those products, someone that can afford those products. Lawyers are certainly part of the target market for both companies - as is anyone that makes more money than average. Oh and law firms are companies.

            The only thing I am denying are the parts you made up. They call it economic theory, not economic fact. The facts show that both companies are innovative and successful. You have no facts to back your claims, only theory and opinion.

             

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              Mike Masnick (profile), Apr 26th, 2011 @ 10:18am

              Re: Re: Re: Re: Re:

              You are claiming that for every dollar invested there will be more innovation.

              I made no such claim. Your desperation and your need to lie about what I said is really quite impressive.

              What I said is that the money *cannot* go towards innovation if it's going to lawyers in such cases. If it's spent on actual investment it has a reasonable *chance* of going to *productive* uses.

              You really ought to read Bastiat on the broken windows, because you seem wholly confused about your basic economics. You prefer broken windows. I prefer productive uses of capital. And that's because one of us understands economics.

              The fact is that your claims cannot be measured. Both companies are already very innovative, to say that a few million dollars would make them vastly more innovative is something you made up. The actual evidence shows that you are wrong.

              I did not say that a few million dollars makes them "vastly more innovative." Stop lying and apologize.

              I did not claim that constraints due to law suits would drive innovation, but they could

              Anyone can read your comment and see that you did.

              What I said was that there is no monetary constraint because there is already enough cash to pay for all of it without constraints.

              "All of it." As if there is a defined limit on innovation. Yikes. Seriously, go read some Romer.

              Producing products alone does not create economic growth. There has to be someone to buy those products, someone that can afford those products. Lawyers are certainly part of the target market for both companies - as is anyone that makes more money than average. Oh and law firms are companies.

              Seriously, learn something about economic growth before you dig yourself a deeper hole. Spending on legal fees is non productive spends.

              The only thing I am denying are the parts you made up. They call it economic theory, not economic fact. The facts show that both companies are innovative and successful. You have no facts to back your claims, only theory and opinion.

              If you don't understand economics, you will make statements like the above. It only makes you look ignorant. Yes, economics is a theory, but one with plenty to back it up. And just because you're unable to comprehend basic economics, doesn't mean you get to ignore it.

              Honestly, no thinking rational educated individual thinks that you have a higher likelihood of productive economic outcomes from spending it on a legal fight rather than investing it. I mean, seriously... that doesn't even pass the basic laugh test.

               

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                Anonymous Coward, Apr 26th, 2011 @ 8:41pm

                Re: Re: Re: Re: Re: Re:

                "Honestly, no thinking rational educated individual thinks that you have a higher likelihood of productive economic outcomes from spending it on a legal fight rather than investing it. I mean, seriously... that doesn't even pass the basic laugh test."

                There in lies the difference in what we are each saying. You are talking about likelihood and I am talking about what is actually happening, what is measurable. Reality does not always match theory. The money spent on lawyers by Samsung and Apple will have no measurable effect on innovation. If you can't see the innovation, can't measure it, can't account for it in any way, is it there? How would you know if it was missing? There is no monetary constraint on innovation due to lawsuits in this case.

                 

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                  Mike Masnick (profile), Apr 27th, 2011 @ 12:04am

                  Re: Re: Re: Re: Re: Re: Re:

                  There in lies the difference in what we are each saying. You are talking about likelihood and I am talking about what is actually happening, what is measurable.

                  Um. No. We are not. We are talking about reality. We have two scenarios: one in which the money goes to fight a bogus legal fight, and one in which it's invested.

                  One of them -- with no questions -- has no economic productive outcome. The other has a *definitive* net positive impact on innovation.

                  The money spent on lawyers by Samsung and Apple will have no measurable effect on innovation.

                  This is simply false. I'm sorry. Seriously, it definitively, unquestionably will have an impact on innovation, because it's money that *conclusively* cannot go towards innovation, but must go towards lawyers instead.

                  If you can't see the innovation, can't measure it, can't account for it in any way, is it there? How would you know if it was missing? There is no monetary constraint on innovation due to lawsuits in this case.

                  No offense, but that is the dumbest statement I've ever seen anyone make on this site. I'm serious. That is the single most economically clueless statement made here.

                  Please.

                  Read what you said and apologize or admit you didn't mean it. For the sake of my faith in humanity. You can't mean that.

                  Either that or you're really a Bastiat satire impersonator. Broken windows all around.

                   

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                    Anonymous Coward, Apr 28th, 2011 @ 12:52pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    What is your basis for assuming that the money going to lawyers will *conclusively* go toward innovation?

                    That opinion seems to be rooted in this statement:
                    "assuming Apple and Samsung have semi-competent CFO types, you can bet its invested in ways that increase innovation"

                    First we make an assumption and then there are good odds. That is far from conclusive and you know it. You assume that the money will be spent on innovation, I do not. If we assume that the money will not be spent on innovation in the first place then there is no effect on innovation when money is spent on lawyers or anything else for that matter.

                    What is your definition of innovation exactly? How does one recognize your idea of innovation or the lack there of?

                    The personal attacks are unbecoming. We can have different opinions without insults. Disagreeing with you does not require an apology. Nor does asking you to demonstrate your point.

                     

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                      Mike Masnick (profile), Apr 28th, 2011 @ 10:21pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      What is your basis for assuming that the money going to lawyers will *conclusively* go toward innovation?

                      No, I said the money going to lawyers will not go to innovation, because it's going to lawyers.

                      First we make an assumption and then there are good odds. That is far from conclusive and you know it. You assume that the money will be spent on innovation, I do not. If we assume that the money will not be spent on innovation in the first place then there is no effect on innovation when money is spent on lawyers or anything else for that matter.

                      No, you seem confused. The money is invested -- thus it goes to productive uses. Spending money on lawyers is not invested.

                      What is your definition of innovation exactly? How does one recognize your idea of innovation or the lack there of?


                      Innovation is anything that leads to economic growth.

                      The personal attacks are unbecoming. We can have different opinions without insults. Disagreeing with you does not require an apology. Nor does asking you to demonstrate your point.

                      They're not insults. If you say something ignorant, I'm going to say it's ignorant. It's not a reflection on you. It's a reflection on your statements of ignorance. The idea is that you might want to educate yourself.

                       

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                        Anonymous Coward, Apr 29th, 2011 @ 3:57pm

                        Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                        You will have to excuse the wording in the first sentence of the last post, should have read:
                        What is your basis for assuming that the money going to lawyers would have *conclusively* gone toward innovation?

                        Again, you seem to be assuming that the money spent on lawyers would have gone toward innovation. It just as easily could have gone to executive bonuses or up in flames.

                        Also, the news continues to prove you wrong:
                        http://www.physorg.com/news/2011-04-apple-juggernaut-ripples-tech-world.html

                        Your theory is fine and all but the products in the market and the balance sheets tell a different story. Feel free to quantify the loss in economic growth that you claim.

                         

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                          Mike Masnick (profile), May 2nd, 2011 @ 12:49am

                          Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                          Again, you seem to be assuming that the money spent on lawyers would have gone toward innovation. It just as easily could have gone to executive bonuses or up in flames.

                          The money was being invested. That's what happens when you have money. When it's invested, it goes towards innovation.

                          When it goes to lawyers, it does not get invested.

                          Also, the news continues to prove you wrong:
                          http://www.physorg.com/news/2011-04-apple-juggernaut-ripples-tech-world.html


                          How does that prove me wrong at all? That seems to prove me right. Just think what else Apple could do if it wasn't wasting money on patent fights.

                          Your theory is fine and all but the products in the market and the balance sheets tell a different story. Feel free to quantify the loss in economic growth that you claim

                          Easy: any dollars spent on patent lawsuits are a deadweight loss to society. You can't argue that.

                           

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                            Anonymous Coward, May 2nd, 2011 @ 2:29pm

                            Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                            Why is it that you refuse to *quantify* the economic loss/loss to innovation that you claim?

                            "The money was being invested."

                            Prove it. Prove that the money did not come from executive bonuses or other funds that are not pure investments.

                            "Just think what else Apple could do if it wasn't wasting money on patent fights."

                            You seem to be missing the fact that Apple and Samsung are hugely innovative. In the case of Apple and Samsung the cost of lawyers is a drop in the bucket and has minimal impact on innovation if any at all. It is nice believe that things would be different if there were no lawsuits but you have no way to prove your theory. Your entire argument is based on a bunch of assumptions. Sounds like turtles all the way down to me. Your unsubstantiated claims are far from convincing.

                             

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                              Mike Masnick (profile), May 2nd, 2011 @ 3:59pm

                              Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                              Why is it that you refuse to *quantify* the economic loss/loss to innovation that you claim?


                              I did quantify it: ALL money spent on this legal dispute is money that doesn't go towards investment.

                              That's bad.

                              Prove it. Prove that the money did not come from executive bonuses or other funds that are not pure investments.


                              There's nothing here to "prove." The money was either invested or it was not. If it goes to the legal dispute, it's not invested.

                              You seem to be missing the fact that Apple and Samsung are hugely innovative

                              I'm not missing that at all. I'm pointing out that they'd be more innovative if they weren't wasting money on non-productive non-investment.

                              In the case of Apple and Samsung the cost of lawyers is a drop in the bucket and has minimal impact on innovation if any at all.

                              Economically, this is wrong. It's simply impossible. You act as if the limits on innovation are being reached. You're wrong.

                              It is nice believe that things would be different if there were no lawsuits but you have no way to prove your theory.

                              It's not "a theory." It's economics.

                              Your entire argument is based on a bunch of assumptions.

                              No, my entire argument is based on FACT. The money is either invested or it is not. If it's going towards a lawsuit, it's not invested. If it's not, it is.

                              Stop arguing this. You're wrong.

                               

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                                Anonymous Coward, May 2nd, 2011 @ 8:49pm

                                Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                                There is no way to be sure that any investment will be fruitful and no way to be sure that any money that goes to lawyers in this case would have done anything more useful. You can make assumptions and believe whatever you want, that does not make it so. Sorry Mike, your house of cards that is built on faith just does not hold up in the case of Apple and Samsung.

                                 

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                                  Mike Masnick (profile), May 2nd, 2011 @ 11:34pm

                                  Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                                  There is no way to be sure that any investment will be fruitful and no way to be sure that any money that goes to lawyers in this case would have done anything more useful.

                                  Sure there is. Look, it's basic math at this point: the NPV of money invested is greater than zero. The NPV of money not invested is zero.

                                  Argument over. Please stop trying.

                                  Sorry Mike, your house of cards that is built on faith just does not hold up in the case of Apple and Samsung

                                  No "faith." Reality.

                                   

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                                    Anonymous Coward, May 4th, 2011 @ 10:27pm

                                    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                                    You have no way of knowing if or how the money is invested or what the return on such an investment would actually be, thus you make assumptions and statements based on your faith in those assumptions. Nothing more than your opinion shows that the money is invested in a way that will benefit innovation.

                                     

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                                      Mike Masnick (profile), May 5th, 2011 @ 2:38am

                                      Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                                      You have no way of knowing if or how the money is invested or what the return on such an investment would actually be, thus you make assumptions and statements based on your faith in those assumptions. Nothing more than your opinion shows that the money is invested in a way that will benefit innovation.

                                      I know the money is invested. Period.

                                      Look this is simple: if you have money and it's invested, the NPV is positive.

                                      If you have money and give it to lawyers, the NPV is negative.

                                      End of argument.

                                       

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    Shon Gale (profile), Apr 24th, 2011 @ 6:40am

    WOW Patents work so well!! It's a great system: You patent some old useless tech and then sue the hell out of everyone.

     

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      Anonymous Coward, Apr 24th, 2011 @ 8:34am

      Re:

      The tech is useful, it's the patents that are useless. Useful to the patent holder, maybe, useful to anyone else, no.

       

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    Anonymous Coward, Apr 26th, 2011 @ 9:39am

    You know what bothers me about all these ridiculous Eula's that allow Apple to track your every move through your IPhone/IPad? Thanks to patents, I can't simply switch to a competitor. Patents keep competitors out of the market. So I either can't buy a device with certain characteristics or if I have a device with these characteristics, it must have other characteristics (ie: tracking me) that I don't like. This limits my options. How is that innovative? These people essentially have an unregulated monopoly and this creates fewer devices with less diversity and I'm forced to only having the option of buying devices with less desirable attributes. That's not innovation. That's the hindrance of innovation. Patents are preventing the production of products with more desirable attributes.

     

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    Anonymous Coward, Apr 29th, 2011 @ 1:51am

    apple has been in tons of lawsuits, and yet they still "innovate", so they have money to waste it seems on frivolous lawsuits

     

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    patent litigation, May 2nd, 2011 @ 7:03pm

    The increasingly complex web that's developed from all of the mobile patent enforcement actions is truly mind-boggling. What's more, it all seems rather wasteful, when one considers the fact that the likely result of all these lawsuits will be settlements and cross-licensing deals.

     

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    Anonymous Coward, May 5th, 2011 @ 6:35pm

    "I know the money is invested. Period."

    Invested in Steve Jobs' health care maybe. You believe but have no evidence, that is called faith.

    "Look this is simple: if you have money and it's invested, the NPV is positive."

    Not arguing that. Our argument really comes down to what would otherwise be done with the money if it were not spent on lawyers, specifically in the case of Apple and Samsung and not necessarily in other cases. You seem to believe that every dollar goes toward investment in all cases all of the time. You also seem to believe that investment in innovation always produces more innovation. Not every investment in innovation provides a return and for investments that do provide a return not all the returns are of equal value. Apple and Samsung have enough money to invest that money taken away from investment will be taken from investments that are less likely to provide a return at all or from investments that are likely to provide a small return. The net effect on innovation is minimal or nothing at all. There is an order of magnitude more money to invest than will be spent on lawyers.

     

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    •  
      icon
      Mike Masnick (profile), May 6th, 2011 @ 12:54am

      Re:

      Invested in Steve Jobs' health care maybe. You believe but have no evidence, that is called faith.


      No. There is no "faith" here. I'm saying that no company sits on cash beyond petty cash. The remaining money is invested. And the ROI on investment has a positive NPV.

      The NPV on money spent on lawyers does not.

      No faith. Just understanding economics.

      Not arguing that. Our argument really comes down to what would otherwise be done with the money if it were not spent on lawyers, specifically in the case of Apple and Samsung and not necessarily in other cases.

      No, that's not the argument at all. There is no argument. The money is either invested or it is not. You seem to think that there's a magical place where money that a company has is put in a mattress rather than invested.

      There isn't.

      You seem to believe that every dollar goes toward investment in all cases all of the time.

      It does. What do you think a bank is?

      You also seem to believe that investment in innovation always produces more innovation

      Yes, on a *net* basis.

      Not every investment in innovation provides a return and for investments that do provide a return not all the returns are of equal value.

      Sure, but you're talking on a micro level. I'm talking on an aggregate level.

      Apple and Samsung have enough money to invest that money taken away from investment will be taken from investments that are less likely to provide a return at all or from investments that are likely to provide a small return.

      On what basis do you make that claim? You say *I'm* faith based and then come out with this purely faith-based claim?

      I'm sorry, but this is wrong.

      The net effect on innovation is minimal or nothing at all. There is an order of magnitude more money to invest than will be spent on lawyers

      And that makes it okay to waste money?!?! My economics professors are banging their heads on the wall.

      Look, this is simple. You have 2 scenarios, one in which money is invested at a positive NPV and one in which it is not.

      You are arguing it's okay that the money is not invested, but instead is spent on nonproductive waste. I, on the other hand, understand how that's damaging economically.

       

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      •  
        identicon
        Anonymous Coward, May 6th, 2011 @ 1:05pm

        Re: Re:

        "It does. What do you think a bank is?"

        How does money sitting in the bank drive innovation? Interest alone is *not* innovation, money sitting in the bank does not drive innovation. It may provide a return on investment but 'money sitting in the bank' is not a business plan and is questionably better than spending money to protect your interests.

        How much do you think lawyers will be paid in this case? Over what period of time? What do you think the actual interest on the money would be if the money did not go to lawyers?

        "On what basis do you make that claim? You say *I'm* faith based and then come out with this purely faith-based claim?"

        Do you think that Apple or Samsung has to kill whatever they think their next killer product is to pay for lawyers? They don't, the money will come from a place that has minimal impact on the business - otherwise they would take the RedHat approach and just settle.

         

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  •  
    identicon
    Anonymous Coward, Jan 5th, 2012 @ 8:46pm

     

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  •  
    identicon
    Anonymous Coward, Feb 23rd, 2012 @ 7:36pm

    And now Apple has too much cash:
    http://www.msnbc.msn.com/id/46505224/ns/business-us_business/

    You sure nailed this one, Mike.

     

    reply to this | link to this | view in chronology ]


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