Samsung demands access to iPhone 5 and iPad 3

dekcufi

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Apple needs to be struck hard on this one IMHO. Yes smart phone do look similar and are typically also around a similar size and shape. GM can't demand the latest working truck from ford to ensure it won't have a similar looking truck. They are all a basic platform and all basically look the same. Some or more fluid and rounded corners, some are boxier and a little more flasier....... just because apple put out a phone with a single button doesn't mean some one else can't put out a phone with a button too. What next we have a patent on where the battery is and no one else can produce a phone with a battery in a similar location? Cause it balances out the phone?

I think this is going to extremes..... most products in any product category usually look similar! Why should apple products be exempt from the norm?
 

Droid800

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Apple needs to be struck hard on this one IMHO. Yes smart phone do look similar and are typically also around a similar size and shape. GM can't demand the latest working truck from ford to ensure it won't have a similar looking truck. They are all a basic platform and all basically look the same. Some or more fluid and rounded corners, some are boxier and a little more flasier....... just because apple put out a phone with a single button doesn't mean some one else can't put out a phone with a button too. What next we have a patent on where the battery is and no one else can produce a phone with a battery in a similar location? Cause it balances out the phone?

I think this is going to extremes..... most products in any product category usually look similar! Why should apple products be exempt from the norm?

There's a difference: apple holds trademarks on the form and exterior design of the iPhone. If they can prove Samsung made an effort to copy that form to steal customers away, Samsung is going to pay for it. And it isn't just the generic shape; its everything from the placement of the volume rocker, the chrome band, and how the screen is set on the face of the phone. It is much easier for apple to make this claim successfully than it is for Samsung to defend against.

The suit also includes things like the launcher and icon design, as well as how certain parts of the OS function.

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Droid800

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As for samsungs request: there's not a chance in hell they'll get it. The Samsung products apple saw were all publicly announced and widely disseminated. Apples products haven't been announced and haven't even been seen. Samsung thinks they're being clever, but this just makes them look stupid.

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ottscay

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As for samsungs request: there's not a chance in hell they'll get it. The Samsung products apple saw were all publicly announced and widely disseminated. Apples products haven't been announced and haven't even been seen. Samsung thinks they're being clever, but this just makes them look stupid.

I mostly agree with this - Samsung's request for discovery here is much weaker than Apple's, and is most likely an attempt at gaining leverage. I wouldn't put their odds of success in the "not a chance in hell" category, but certainly at no better than 1/4-1/5.
 
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ottscay

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There's a difference: apple holds trademarks on the form and exterior design of the iPhone. If they can prove Samsung made an effort to copy that form to steal customers away, Samsung is going to pay for it. And it isn't just the generic shape; its everything from the placement of the volume rocker, the chrome band, and how the screen is set on the face of the phone. It is much easier for apple to make this claim successfully than it is for Samsung to defend against.

The suit also includes things like the launcher and icon design, as well as how certain parts of the OS function.

I'm gratified to see you not bandying about the claims that Apple is overwhelmingly going to win its trade dress claims, but I'm afraid your post is confusing the facts. If you don't believe me I'd point you back to the blog post you like to cite for clarification.

Apple does not hold trademarks on the form and exterior design of the iPhone, their trademark claims are entirely restricted to the specific icons they are suing over in the UI. The bulk of their argument about the copying of the general exterior design and UI is foolishly based on their registrations for trade dress protection. As I explained in another thread yesterday, those trade dress claims will be far more difficult to defend then you like to imagine, as trade dress law is clearly designed to protect consumers against dishonest design and packaging that attempts to trick a consumer into believe a product is authorized or made by a different company. Since Samsung clearly does not want you to think you are buying Apple products, this will be very hard to establish even at a prima facie level. Moreover, as I related in that post, trade dress is explicitly not applicable to the generalities of design, or to any functional aspects (including the UI).

By attempting to extend their trade dress claims beyond what is protected by the Lanham Act and against subsequent precedent, Apple not only will have most of their trade dress claims thrown out (the packaging claims should survive to trial, although I doubt they'll win them), but they have hopelessly contaminated much of the trademark and patent claims that defending their design will actually have to rest on.

As a result of this ill-conceived strategy most of Apple's trade dress claims about design and UI of the product will be thrown out, and the remainder will almost certainly not prevail in court. Apple will be left with a handful of trademark claims on icons and a handful of patent claims Worse, Including the Nexus S and Galaxy Tab show that Apple's just trying to cast as wide a net as possible to try and get their own leverage, which will further weaken their claims if this sees an actual decision.

As I said yesteday, Apple may well win a couple of the icon trademark claims (most likely candidate being the photo icon), although Apple itself has clearly made use of prior art when it comes to the handset button (which otherwise appears to the most damning similarity between Touch Wiz and iOS). They may well also have a couple of reasonable patent claims, but after reviewing them again tonight I suspect they'll lose some in the process (along with a couple of trademarks). For example, a patent on "equally rounded corners" on a design is almost certainly not going to be enforceable. Will Apple be suing the manufactuers of plastic lunch boxes over this? More to the point, what of the many pre-existing RIM and Nokia products that have those features?

The biggest thing though is with the loss of the trade dress claims (which is the bulk of their claims) they won't be getting a huge settlement. This means it's even more likely that the end result will be a handshake and the exchange of patents to solve the now 2 dozen plus ones that Samsung is suing over in 3 different jurisdictions.

Worse, Apple will still have no leverage to get more parts from Samsung, which I still believe is what what ultimately drives this lawsuit, and is what I believe prompted the timing of it (and is why they couldn't come to an agreement earlier). The fact that they have been negotiating this since last summer in no way alters that believe in my mind, as last summer was both when other manufacturers ran into the supply problem with Samsung on AMOLED screens and some other parts, and is also when Apple would have had to start putting making plans for the next iPhone more concrete (actually, I'd normally expect this to happen earlier, but I suspect preparing the Verizon iPhone took up a bit of that time).

The ultimate point here is that Apple is grandstanding on their trade dress claims, which were the only ones likely to result in a large judgement. Jobs may well be so pissed that he doesn't want to let the issue go (he seems to have a thin skin) but that doesn't mean Apple has much of a chance at winning them. They may well win some of the small battles on trademarks and patents, but they also stand to lose some in a big way (by losing some to prior art claims, etc.), and of course they will have to defend against a much larger number of patent infringement cases now from Samsung, increasing the odds of having to just settle for cross-licensing.
 

dekcufi

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So who holds the trademark for a vehicle with 4 wheels?

Apple is so used getting their way arguing that they are a small company and can not afford any loss in revenue due to any product that even slightly resembles an apple product. Their revenue stream no longer supports that argument.

Seriously a trademark or patent claiming no one else can place a single button in the center of a bezel because it happens to be the most logical place for it....... I don't buy it one bit. And a chrome trim around the bezel come on....... that's just a trim piece.

If every manufacturer was as over zealous as apple we would need alot more courts and lawyers and we would suffer on the consumer end via a lack of new products.

What's next a slightly concave touch screen that magically lets the user know they are closer to the edge of the screen?
 

Droid800

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So who holds the trademark for a vehicle with 4 wheels?

Apple is so used getting their way arguing that they are a small company and can not afford any loss in revenue due to any product that even slightly resembles an apple product. Their revenue stream no longer supports that argument.

Seriously a trademark or patent claiming no one else can place a single button in the center of a bezel because it happens to be the most logical place for it....... I don't buy it one bit. And a chrome trim around the bezel come on....... that's just a trim piece.

If every manufacturer was as over zealous as apple we would need alot more courts and lawyers and we would suffer on the consumer end via a lack of new products.

What's next a slightly concave touch screen that magically lets the user know they are closer to the edge of the screen?

Those aren't the claims being made. It is not those single items, but rather how they combine to form the final product.

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dekcufi

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Those aren't the claims being made. It is not those single items, but rather how they combine to form the final product.

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It is a bargaining token for apple nothing more. They are running low on componants.

Lol'd @ how they combine! Is Microsoft going to sue apple for using a single button to bring up a base menu? They are arguing extremes in most of their complaint. They would charge you ever time you pushed icon on your phone if they could.
 

ottscay

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So who holds the trademark for a vehicle with 4 wheels?

Agreed, although looking at just the patents and trademarks (since I think the trade dress claims are bunk) you have to realize that because they have already been granted to Apple, the burden will be on Samsung to show that either they are invalid, or that Samsung is not in fact in violation. In the case of a trademark they could show (for example) that Apple used already existing imagery when they made the iOS icons (which at least in the case of the dialer app is true), which could potentially lead to a review of that trademark. In other cases Samsung will have to suggest that they aren't copying Apple because an idea is really obvious (for example, using a notepad for the note taking app), although in other cases this may be harder (the use of a gear for the settings icon). The reason I continue to cite the photo app as a hard one for Samsung is because they chose a similar yellow flower, and while the icon itself doesn't look much like Apple's, there's no plausible way to defend the choice of a yellow flower (quite possible the same species) from all of the possible choices Samsung had to suggest a photo.

That's not to say that current patent laws (and other IP laws) aren't in desperate need of an overhaul...they clearly are...but the judge will have to rule on existing laws, not how it "should be".

Seriously a trademark or patent claiming no one else can place a single button in the center of a bezel because it happens to be the most logical place for it....... I don't buy it one bit. And a chrome trim around the bezel come on....... that's just a trim piece.

In general I agree, and in particular neither trademarks nor patents can really cover that general design that they want to claim as their own, which is why Apple is trying to make this a trade dress case. As I've said previously they have a very uphill battle with that part of the case, but I should point out that trade dress can at least theoretically be applied. If it can be shown that something is part of general design but instead is a significant part of their product image (to the point of confusing customers when copied) it could be protected. Maybe the best example where Apple would have a reasonable trade dress argument would be if Samsung or someone else put a single circular button akin to their home button on the bottom of the phone (obviously that wouldn't be practical with current phone versions of Android, but it would be conceivable with an Ice Cream Sandwich phone). The single round home button with the "rounded square" icon in it is found in essentially all iOS devices, has carried across product lines, and isn't really needed from a functional point of view (that is, there's no reason said button has to be circular and of a similar size/design). So Apple could make a reasonable argument that this aspect of their design has taken on "additional meaning" beyond any sort of functional design, and (if someone were stupid enough to copy it) would have a reasonable trade dress case.

The chrome bezel will be much harder for them. For one, Apple didn't actually create a simple chrome strip for a bezel, they actually had a full metal backplate that wrapped around the device. This makes for an extremely different general appearance when the devices are both in hand. I know Apple's lawyers are all giddy showing photos of the devices straight on, or (in one case) a shot or render of the iPhone 3GS where the back is reflecting black to hide the contour (making it look more like a Galaxy S phone) but that illusion will crumble as soon as both phones are on exhibit in front of a judge. In reality no consumer could reasonably confuse the sturdy metal unibody construction of the iPhone 3G/3GS with the plasticy Galaxy S phones.

The iPhone 4 and iPad 2 make it even harder to try and make that case, since Apple completely dropped the metal unibody design with wrap-around bezel in the iPhone 4, and hides the metal backing behind the faceplate on the iPad 2. This suggests that Apple didn't consider that aspect of the design to be so critical that they had to maintain it in their product line, and thus makes it even harder to argue that it's presence in other products will confuse customers.

Finally, Apple's lawyers have been disingenuous when showing photos of the overall UI. They have consistently show photos of the Galaxy S with the app launcher open next to an iPhone 3GS home screen, to imply their close similarity. But of course a Galaxy S phone doesn't look like that when it's home screen is open, it looks more like this:
samsung-galaxy-s_1.jpg


And Samsung's marketing has reflected this, which isn't surprising since widgets are an important differentiator between Android and iOS (apparently Apple is now going to copy Android and introduce widgets into iOS5...it's like they're the new Microsoft). Much like the selective use of photos that try and hide how different the iPhone's metal backplate is from the Galaxy S, this will not play well with the judge in open court, as the homescreens of iOS and Android devices really do not look very similar. Apple is literally using tricks to try and make their phone and the Galaxy S look as alike as possible, but are using techniques that will only work in photos. This could suggest (it does to me) that Apple was trying to make a case that looked superficially overwhelming so that Samsung would give in, but maybe Apple just drank some of its own koolaid here, I don't know.
 
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Droid800

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It is a bargaining token for apple nothing more. They are running low on componants.

Lol'd @ how they combine! Is Microsoft going to sue apple for using a single button to bring up a base menu? They are arguing extremes in most of their complaint. They would charge you ever time you pushed icon on your phone if they could.

You think that Apple is doing this based on components? No offense, but do you understand the implications of that? (and why not even Apple's own hubris would put the ability to produce their top-selling products at risk?)

As for the 'Lol'd @ how they combine!': That's how things like the claim on the design of the iPhone work. They aren't suing just about the bezel, or the one button, or the general design. They're suing based on how they ALL combine into the final product. Its a distinction that you really need to understand to be able to understand lawsuits like this.
 

dekcufi

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You think that Apple is doing this based on components? No offense, but do you understand the implications of that? (and why not even Apple's own hubris would put the ability to produce their top-selling products at risk?)

As for the 'Lol'd @ how they combine!': That's how things like the claim on the design of the iPhone work. They aren't suing just about the bezel, or the one button, or the general design. They're suing based on how they ALL combine into the final product. Its a distinction that you really need to understand to be able to understand lawsuits like this.

I agree the iPhone is built out of readily available products commonly used to build phones. Not exotic materials that no one else is using.The distinction is apple does not want any products to even remotely resemble an apple product.

There is so little to lose in how the icons may or may not look similar. That is nothing more then pushing out a software update and the loss of some pride for someone. I don't think the average person on the street is that concerned over what the specific icon looks like for the camera button ect....

Idon't think samsumg set out to build an I clone. If they did I am sure they could make it similar and so Samsung brand district all anyone could do is complain. Apple complains well.

I think this a witch hunt on apples part. Take the 2 physical devices side by side not favorable camera work in one parties favor and a go from there. I am sure a blind person could easily distinguish the feel of the 2 devices. More people ask me if my evo is an iPhone then my galaxy s.
 

ottscay

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You think that Apple is doing this based on components? No offense, but do you understand the implications of that? (and why not even Apple's own hubris would put the ability to produce their top-selling products at risk?)

Do you realize the implications if Apple has to further delay the next iPhone? Or if they can only ship in limited quantities before the holidays???

Last summer the Droid Incredible had everything in place in terms of word of mouth and the "it factor" for people who wanted an alternative to the iPhone. Yet within weeks sales and marketshare were crippled by the lack of availability of a single component, the AMOLED screen. Forced to ship in limited numbers the entire summer until they could deploy an SLCD version, they watched as the Droid X stole it's thunder (and sales), and then a funny thing happened: Samsung launched its Galaxy S series internationally and on all 4 major U.S. carriers...and each and every phone shipped with an AMOLED screen. Yet HTC had to watch helplessly as their fantastic product launch and positive buzz on the Dinc was squandered because they couldn't get enough AMOLED screens from Samsung.

That's just two companies on the same platform - HTC has dropped Samsung's screens altogether now (what does that tell you?) but it didn't really hurt Android as a platform, since a boatload of Galaxy S models sold.

But the next iPhone is already delayed a quarter...and there is no other model to make up the slack. Do you honestly believe that Apple delayed from their usual yearly launch on purpose? The longer they wait to ship, the weaker their LTE-less product will look. What if they have to push it back until Ice Cream Sandwich handsets are out? Or if they miss the holidays? (you realize they're only one more quarter from that now).

For iPhone marketshare it's do or die time, and Apple is using a lot of Samsung components at the same time as Samsung is launching an all-out onslaught on the phone market, and using up most of those components themselves. Apple is in serious danger of seeing its market share drop by a significant chunk if they can't get a new product out in a reasonable amount of time and in sufficient numbers.

What possible implications do you think outweigh that? Apple and Samsung were apparently in negotiations for the better part of a year - what do you think they were discussing? If it was just a licensing fee, it would have been pretty obvious early one whether the two parties were too far apart to find common ground. No, Apple wants assurances that they components they need are available to them in very high quantities, and Samsung isn't willing to sacrifice their own use of production lines to make those assurances.

And what would the downside even be for Apple here? They are asking for a legal request (assurances of specific quantities of items) in exchange for licensing; it's not like Jobs was asking for poppies and Geisha girls. If they get what they want there will be a quick out of court settlement that is not made public.

Apple is one of the largest buyers of components, and like all other larger buyers they are used to throwing their weight around to get what they want. Nokia long did this with their supply chain as well. The problem is that Apple and Samsung are both competing for Samsung's production lines, and while Samsung certainly wants to keep selling compents to Apple, they've already established that they aren't willing to give up the components in their own products to do so.

Perhaps some of us make this too "either/or". I'm sure Jobs ego was pricked last year when the Galaxy S line came out. I'm sure they would have asked for some sort of licensing no matter what (they may not have got it, but I'm sure they'd have asked). But the real question is, why wasn't there a resolution? Or if there was a clear impasse, why let it drag on this long before the lawsuit?

The answer is that there are much larger issues at play here then whether or not Samsung alters it boxes, or pays Apple a buck for each item that ships with Touchwiz on it.

You say that even Apple's hubris wouldn't let them sue to ensure it has the components it needs (however that equates to false pride) but you are ok assuming that Jobs and co have recklessly allowed their lawyers to launch a lawsuit that attempts to extend Trade Dress laughably beyond its current legal standing, casting as wide a net as possible to include products that clearly have nothing to do with their claims (like the Nexus S)?

Doing that with no larger upside...that would be the definition of self-destructive hubris.
 

Droid800

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Do you realize the implications if Apple has to further delay the next iPhone? Or if they can only ship in limited quantities before the holidays???

Last summer the Droid Incredible had everything in place in terms of word of mouth and the "it factor" for people who wanted an alternative to the iPhone. Yet within weeks sales and marketshare were crippled by the lack of availability of a single component, the AMOLED screen. Forced to ship in limited numbers the entire summer until they could deploy an SLCD version, they watched as the Droid X stole it's thunder (and sales), and then a funny thing happened: Samsung launched its Galaxy S series internationally and on all 4 major U.S. carriers...and each and every phone shipped with an AMOLED screen. Yet HTC had to watch helplessly as their fantastic product launch and positive buzz on the Dinc was squandered because they couldn't get enough AMOLED screens from Samsung.

That's just two companies on the same platform - HTC has dropped Samsung's screens altogether now (what does that tell you?) but it didn't really hurt Android as a platform, since a boatload of Galaxy S models sold.

But the next iPhone is already delayed a quarter...and there is no other model to make up the slack. Do you honestly believe that Apple delayed from their usual yearly launch on purpose? The longer they wait to ship, the weaker their LTE-less product will look. What if they have to push it back until Ice Cream Sandwich handsets are out? Or if they miss the holidays? (you realize they're only one more quarter from that now).

For iPhone marketshare it's do or die time, and Apple is using a lot of Samsung components at the same time as Samsung is launching an all-out onslaught on the phone market, and using up most of those components themselves. Apple is in serious danger of seeing its market share drop by a significant chunk if they can't get a new product out in a reasonable amount of time and in sufficient numbers.

What possible implications do you think outweigh that? Apple and Samsung were apparently in negotiations for the better part of a year - what do you think they were discussing? If it was just a licensing fee, it would have been pretty obvious early one whether the two parties were too far apart to find common ground. No, Apple wants assurances that they components they need are available to them in very high quantities, and Samsung isn't willing to sacrifice their own use of production lines to make those assurances.

And what would the downside even be for Apple here? They are asking for a legal request (assurances of specific quantities of items) in exchange for licensing; it's not like Jobs was asking for poppies and Geisha girls. If they get what they want there will be a quick out of court settlement that is not made public.

Apple is one of the largest buyers of components, and like all other larger buyers they are used to throwing their weight around to get what they want. Nokia long did this with their supply chain as well. The problem is that Apple and Samsung are both competing for Samsung's production lines, and while Samsung certainly wants to keep selling compents to Apple, they've already established that they aren't willing to give up the components in their own products to do so.

Perhaps some of us make this too "either/or". I'm sure Jobs ego was pricked last year when the Galaxy S line came out. I'm sure they would have asked for some sort of licensing no matter what (they may not have got it, but I'm sure they'd have asked). But the real question is, why wasn't there a resolution? Or if there was a clear impasse, why let it drag on this long before the lawsuit?

The answer is that there are much larger issues at play here then whether or not Samsung alters it boxes, or pays Apple a buck for each item that ships with Touchwiz on it.

You say that even Apple's hubris wouldn't let them sue to ensure it has the components it needs (however that equates to false pride) but you are ok assuming that Jobs and co have recklessly allowed their lawyers to launch a lawsuit that attempts to extend Trade Dress laughably beyond its current legal standing, casting as wide a net as possible to include products that clearly have nothing to do with their claims (like the Nexus S)?

Doing that with no larger upside...that would be the definition of self-destructive hubris.
Except as I said in the other thread, Apple has a very reasonable chance of winning most of these claims, and any level-headed analysis of the issues makes that clear.

Oh, and check that language about Apple 'delaying' the iPhone. They can't delay what hasn't been announced. It has been long rumored that Apple would adjust the iPhone or iPad's launch schedule to line up with that of the iPod Touch, and they are doing that this year.

I'll also reiterate what I said in the other thread: this will not affect Samsung and Apple's component relationship. Those contracts provide Samsung with billions and billions of dollars every year, and that is business that, quite frankly, they cannot afford to lose. And even if Samsung attempted to deny Apple parts or slow down their production lines, they have contracts that would most certainly cost Samsung billions of dollars in fees for breaking those contracts.

What apple's doing isn't related to self-destructive hubris. Not by any stretch of the imagination.
 

ottscay

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Except as I said in the other thread, Apple has a very reasonable chance of winning most of these claims, and any level-headed analysis of the issues makes that clear.

Seriously? Again? I know you've convinced yourself that you're being objective and that I'm just an Android fanboy, but let's be real here: I've provided you with like 3-4 pages worth of facts and independent references in two threads showing you where trade dress law stems from, as well as discussing subsequent case law (some of which Apple won) showing you why they won't support this claim.

All you have provided is a link to MyNextSite (which I'd already read) that doesn't actually delve into the legal basis, it just goes over the complaint with a fine-toothed comb to to explain what it says to reader. Beyond that you haven't made even a token attempt to provide any other rulings that would support Apple's claims, and to be honest I don't think you know enough about the law to even find them. Instead you are hiding behind pseudo-authoritative claims like "any level-headed analysis" or "all of the other people on the web say so", yet you provide neither analysis nor links to anyone who has analyzed the case law here. Even a quick google search shows that your claim that "everyone is saying so" is totally wrong. Mainstream tech sites like Engadget, TechCrunch, and BGR are staying completely mum on having an opinion. And even some Mac fan sites, like Cult of Mac takes a decidedly condescending view of most of Apple's larger claims.

So it's nothing but a myth that there's some large contingent of cogent arguments out there in favor of Apple that I'm ignoring. Moreover, I'm the only one actually supplying facts, names, links, and examples in this debate. Unless you have a shred of evidence, or a credible link to anyone who actually covers the legal and precedent basis for your conclusion (which I would be fascinated to read) you are just grandstanding, and at the least you should stop berating others on this forum by pretending that they're simpletons and you are the voice of sanity.

Oh, and check that language about Apple 'delaying' the iPhone. They can't delay what hasn't been announced. It has been long rumored that Apple would adjust the iPhone or iPad's launch schedule to line up with that of the iPod Touch, and they are doing that this year.

Riiiight. And Motorola isn't canceling the Bionic and applying the name to another phone, they're just "delaying it for a redesign so that the phone will better meet consumer expectations". Granted, Apple does a good job of purposely not making announcements early so they don't have to explain when they make these shifts, but you're swallowing the kool-aid if you think Apple planned this. By the way, while it HAS long been rumored that there would be another iPad later this year (which is a faster release, not a slower one) there were pretty much no rumors on the iPhone delay until about a week or so before Apple leaked it through their usual channels. Make of that what you will, as I freely admit there's no way to prove this either way without knowledge from inside Apple.

I'll also reiterate what I said in the other thread: this will not affect Samsung and Apple's component relationship. Those contracts provide Samsung with billions and billions of dollars every year, and that is business that, quite frankly, they cannot afford to lose. And even if Samsung attempted to deny Apple parts or slow down their production lines, they have contracts that would most certainly cost Samsung billions of dollars in fees for breaking those contracts.

Ok, I may see where some of the misunderstanding is coming from. It sounds like you think that I am saying that Samsung agreed to provide say 31.276 million copies of gizmo X, but now doesn't want to (also, I think you sometimes mix in the fact that others suggest that Samsung would threaten to cancel their contract over this lawsuit). You are 100% correct that Samsung would never cancel or threaten to cancel selling components with Apple. Like all businesses, they are happy to make a profit from anyone, even if they are battling it out in court on some other issue. But alas, component deals are not that simple.

In reality there is a wide range of procurement practices, and by necessity they have a lot of flexibility built in, because manufacturers cannot always predict how many they can produce (see current iPad woes) and companies cannot always predict how many they will need (see the Asus Transformer for a recent example). Despite this uncertainty, the system is actually under a very tight squeeze due to the widespread use of lean manufacturing (if you're curious, the modern version of lean production grew out of Japanese auto manufacturing practices in the '80s. You can read a decent synopsis here.)

The long and short of it is that tech companies try to keep the amount of goods on hand low by matching production to expected demand. Those decisions are made quite a while in advance, so enough flexibility is built into lines to try and cover the unknowns. For example production lines often can be switched over in reasonably short time periods (weeks or months) to make other components. This works fairly well, and even occasionally not being able to meet demand for a month or two is seen as less expensive then frequently producing too much product that has to be heavily discounted or (much worse) collected from retailers and disposed of.

That said, component manufacturers (especially large ones who produce more of an item than any one company will buy) build in additional flexibility, because any down time is money lost. So they turn to contract flexibility as well. Part of that flexibility is based on making contracts with multiple companies for the same lines. Contracts can be made on percent of output, they can be made based on number of lines, etc. They can of course also be based on specific numbers. In all of those cases there are many, many caveats built in, including contract priority (who gets what in case of a crunch), under what circumstances you can increase production (or the flip, when components will be decreased, or at least not be increased due to use by others). The almost always have a minimum component guaranty, but the clauses for increasing component allotment can be very complicated - Apple actually makes this even more difficult, as their products routinely require components that are very new, increasing the odds that not all lines may be up in time, or that there aren't otherwise enough of the component to go around.

My guess is that Samsung is saying they'll meet their contractual obligations for the minimum number of components, but is refusing to shift capacity to meet increased numbers that Apple wants, for the simple reason that Samsung also needs those parts. It's possible that Samsung is also exercising a clause that lets them reduce some of Apple's component numbers (similar to what they did to HTC last year) but Apple strikes me as the kind of company that would overpay to avoid that sort of clause. Regardless, if Apple now thinks they need twice the monthly capacity as the minimum contract obligation and Samsung is refusing to increase their shipments to Apple, it amounts to the same thing in the end - a delayed iPhone or one that has stock shortages.

Given the timing of the negotiations original negotiations (from what Patel and others have said), their length prior to litigation, the timing of the current lawsuit relative to Apple's usual (but now delayed) launch window, and the fact that Apple is making claims far broader than they can probably win, all suggest to me that they were actually negotiating over trying to get more components out of Samsung, and Samsung has refused.

What apple's doing isn't related to self-destructive hubris. Not by any stretch of the imagination.

The funny thing is you and I totally agree on this; but you've gotten the mistaken notions that Apple is likely to win their trade dress claims (which they aren't) and that there would be some negative consequence if Apple were trying to apply leverage to get more capacity from Samsung (which is actually normal practice for large purchasers...when you buy more than anyone else, you don't expect to hear the word "no" very often). Apple is in a very tight spot if they have a component shortage, and the current delay is consistent with this (as are rumors that the phone could slip to 2012). I'm sure neither Apple nor Samsung are doing anything illegal in this sense, they simply have two disputes, one of which is more important (component shortage) but can't be solved in court, so Apple is firing off proxy shots against the very line of Samsung products that is causing the component issue.

The only reason this sort of commonplace corporate behavior would be surprising is if you have some rose-colored view of Apple as somehow being above the usual business practices of oversized corporations. But if that's the case, then you should be careful about throwing fanboy-stones in your glass house.
 
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Droid800

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Seriously? Again? I know you've convinced yourself that you're being objective and that I'm just an Android fanboy, but let's be real here: I've provided you with like 3-4 pages worth of facts and independent references in two threads showing you where trade dress law stems from, as well as discussing subsequent case law (some of which Apple won) showing you why they won't support this claim.

All you have provided is a link to MyNextSite (which I'd already read) that doesn't actually delve into the legal basis, it just goes over the complaint with a fine-toothed comb to to explain what it says to reader. Beyond that you haven't made even a token attempt to provide any other rulings that would support Apple's claims, and to be honest I don't think you know enough about the law to even find them. Instead you are hiding behind pseudo-authoritative claims like "any level-headed analysis" or "all of the other people on the web say so", yet you provide neither analysis nor links to anyone who has analyzed the case law here. Even a quick google search shows that your claim that "everyone is saying so" is totally wrong. Mainstream tech sites like Engadget, TechCrunch, and BGR are staying completely mum on having an opinion. And even some Mac fan sites, like Cult of Mac takes a decidedly condescending view of most of Apple's larger claims.

So it's nothing but a myth that there's some large contingent of cogent arguments out there in favor of Apple that I'm ignoring. Moreover, I'm the only one actually supplying facts, names, links, and examples in this debate. Unless you have a shred of evidence, or a credible link to anyone who actually covers the legal and precedent basis for your conclusion (which I would be fascinated to read) you are just grandstanding, and at the least you should stop berating others on this forum by pretending that they're simpletons and you are the voice of sanity.

We're going to have to agree to disagree on this, unless we want to keep wasting everyone else's time. I think their claims have a lot more merit than you do, and its clear we're not going to change each other's minds.

Riiiight. And Motorola isn't canceling the Bionic and applying the name to another phone, they're just "delaying it for a redesign so that the phone will better meet consumer expectations". Granted, Apple does a good job of purposely not making announcements early so they don't have to explain when they make these shifts, but you're swallowing the kool-aid if you think Apple planned this. By the way, while it HAS long been rumored that there would be another iPad later this year (which is a faster release, not a slower one) there were pretty much no rumors on the iPhone delay until about a week or so before Apple leaked it through their usual channels. Make of that what you will, as I freely admit there's no way to prove this either way without knowledge from inside Apple.

Here's the thing though; as soon as it was known that Verizon was getting an iPhone in January, every tech site on the planet started wondering how that would impact the usual iPhone release schedule. Obviously, Apple knew from the get-go that they were going to change things up. The fact that the next iPhone is only going to be a modest refresh in preparation for a more drastic one (likely including 4G for the first time on the 6) tells us that.

Ok, I may see where some of the misunderstanding is coming from. It sounds like you think that I am saying that Samsung agreed to provide say 31.276 million copies of gizmo X, but now doesn't want to (also, I think you sometimes mix in the fact that others suggest that Samsung would threaten to cancel their contract over this lawsuit). You are 100% correct that Samsung would never cancel or threaten to cancel selling components with Apple. Like all businesses, they are happy to make a profit from anyone, even if they are battling it out in court on some other issue. But alas, component deals are not that simple.

In reality there is a wide range of procurement practices, and by necessity they have a lot of flexibility built in, because manufacturers cannot always predict how many they can produce (see current iPad woes) and companies cannot always predict how many they will need (see the Asus Transformer for a recent example). Despite this uncertainty, the system is actually under a very tight squeeze due to the widespread use of lean manufacturing (if you're curious, the modern version of lean production grew out of Japanese auto manufacturing practices in the '80s. You can read a decent synopsis here.)

The long and short of it is that tech companies try to keep the amount of goods on hand low by matching production to expected demand. Those decisions are made quite a while in advance, so enough flexibility is built into lines to try and cover the unknowns. For example production lines often can be switched over in reasonably short time periods (weeks or months) to make other components. This works fairly well, and even occasionally not being able to meet demand for a month or two is seen as less expensive then frequently producing too much product that has to be heavily discounted or (much worse) collected from retailers and disposed of.

That said, component manufacturers (especially large ones who produce more of an item than any one company will buy) build in additional flexibility, because any down time is money lost. So they turn to contract flexibility as well. Part of that flexibility is based on making contracts with multiple companies for the same lines. Contracts can be made on percent of output, they can be made based on number of lines, etc. They can of course also be based on specific numbers. In all of those cases there are many, many caveats built in, including contract priority (who gets what in case of a crunch), under what circumstances you can increase production (or the flip, when components will be decreased, or at least not be increased due to use by others). The almost always have a minimum component guaranty, but the clauses for increasing component allotment can be very complicated - Apple actually makes this even more difficult, as their products routinely require components that are very new, increasing the odds that not all lines may be up in time, or that there aren't otherwise enough of the component to go around.

My guess is that Samsung is saying they'll meet their contractual obligations for the minimum number of components, but is refusing to shift capacity to meet increased numbers that Apple wants, for the simple reason that Samsung also needs those parts. It's possible that Samsung is also exercising a clause that lets them reduce some of Apple's component numbers (similar to what they did to HTC last year) but Apple strikes me as the kind of company that would overpay to avoid that sort of clause. Regardless, if Apple now thinks they need twice the monthly capacity as the minimum contract obligation and Samsung is refusing to increase their shipments to Apple, it amounts to the same thing in the end - a delayed iPhone or one that has stock shortages.

Given the timing of the negotiations original negotiations (from what Patel and others have said), their length prior to litigation, the timing of the current lawsuit relative to Apple's usual (but now delayed) launch window, and the fact that Apple is making claims far broader than they can probably win, all suggest to me that they were actually negotiating over trying to get more components out of Samsung, and Samsung has refused.

What Patel was referring to was negotiations over what's included in the lawsuit, not negotiations over parts.

Here's another reason why I don't buy the components argument; other companies are clamoring for Apple's business. LG in particular has been aiming to take over production of the iPhone's screen. If it really came down to Samsung not wanting to provide additional capacity, Apple would not have a hard time finding other manufacturers to pick up the slack.

Also: We know apple overpays Samsung to reserve excess capacity, so the argument that this is all over parts doesn't make any sense.


The funny thing is you and I totally agree on this; but you've gotten the mistaken notions that Apple is likely to win their trade dress claims (which they aren't) and that there would be some negative consequence if Apple were trying to apply leverage to get more capacity from Samsung (which is actually normal practice for large purchasers...when you buy more than anyone else, you don't expect to hear the word "no" very often). Apple is in a very tight spot if they have a component shortage, and the current delay is consistent with this (as are rumors that the phone could slip to 2012). I'm sure neither Apple nor Samsung are doing anything illegal in this sense, they simply have two disputes, one of which is more important (component shortage) but can't be solved in court, so Apple is firing off proxy shots against the very line of Samsung products that is causing the component issue.

The only reason this sort of commonplace corporate behavior would be surprising is if you have some rose-colored view of Apple as somehow being above the usual business practices of oversized corporations. But if that's the case, then you should be careful about throwing fanboy-stones in your glass house.

Oh I'm not surprised by Apple's behavior at all. But seeing what the landscape is, I think they're in a unique enough position that things like the trade dress claims will produce a result that you (and Samsung) aren't going to like. I don't think that this is about leverage for parts because I don't think Apple would do something that would risk the entire company's financial fortunes. Apple can be very hard-headed and very confrontational, but they're also not stupid. If they felt that this was going to risk their supply line, or even if this was about that to begin with, they wouldn't go anywhere near it. (Apple, despite offering some innovative products, is still a very, very conservative company)
 
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it's kinda a catch 22 when one company makes parts for another, yet wants to release something of there own using those same parts... or similar ones. What would apple do if their suppliers stopped supplying, and became direct competitors full on? that would be fun to watch.
 

ottscay

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We're going to have to agree to disagree on this, unless we want to keep wasting everyone else's time. I think their claims have a lot more merit than you do, and its clear we're not going to change each other's minds.

I have no issue with that, as long as you aren't claiming some extra authority beyond your own opinion without serving up the goods.

Here's the thing though; as soon as it was known that Verizon was getting an iPhone in January, every tech site on the planet started wondering how that would impact the usual iPhone release schedule. Obviously, Apple knew from the get-go that they were going to change things up.

Unlike rumors that come from Apple's leak sources, that was truly speculation (no tech site claimed knowledge of Apple's plans). This is significant because Apple could actually have increased sales of the VZW iPhone if they'd leaked such a plan. Since they didn't until much later (after the damage to sales was done, but in time to temper expectations for WWDC) I don't at all accept that Apple planned this.

The fact that the next iPhone is only going to be a modest refresh in preparation for a more drastic one (likely including 4G for the first time on the 6) tells us that.

The iPhone 3GS was a minor refresh, but it still maintained the annual release cycle. I see no correlation there at all. I agree with you that the sixth gen iPhone will likely be 4G (and I applaud Apple for holding back on 4G until it's ready for prime time in terms of battery life).

What Patel was referring to was negotiations over what's included in the lawsuit, not negotiations over parts.

I get that, but my point remains: if the negotiations were truly over how much (or if) Samsung would pay to license Apple's claimed IP, it should have been obvious months ago whether they were too far apart or not. And if Apple's only concern was about being ripped off, wouldn't they have acted decisively and provided Samsung with a deadline last summer, when Apple could have sued and had a major impact on Galaxy S sales (I think we can both agree Jobs isn't known for his patience when suffering fools)

But you seriously think they waited (letting Samsung rack up huge sales that helped to decrease Apple's market share), patiently negotiating with Samsung to please, please pay them for ripping off Apple's designs so everyone could avoid the nastiness of court, and are only now as a last resort filing the lawsuit when the Galaxy S is already at the end of its life? Is that really what you think???

It seems clear to me there was more at stake here in terms of corporate politics.

Here's another reason why I don't buy the components argument; other companies are clamoring for Apple's business. LG in particular has been aiming to take over production of the iPhone's screen. If it really came down to Samsung not wanting to provide additional capacity, Apple would not have a hard time finding other manufacturers to pick up the slack.

Ignoring Apple's displeasure at the QC of LG's displays in the iPad 2, I agree with you that lots of other companies want Apple's business. Unfortunately, it's not like other companies have tons of unused capacity just sitting around waiting to spring into action at a moments notice for a contract the size of an Apple purchase. It's also not like Apple can just swap parts into and out of the next iPhone at will. All of these things take time, and time is something they don't have. I would actually be shocked to not see a greater diversification of parts manufacturers in the iPhone 6th gen (or at least the 7th), but if Apple tried to switch now they'd not get the refresh out until 2012, and they can't afford to wait that long.

Also: We know apple overpays Samsung to reserve excess capacity, so the argument that this is all over parts doesn't make any sense.

Hold on. It's rumored that Apple overpays to reserve excess capacity. None of these deals are made public. I agree that Apple probably does do this (I see no reason to doubt the rumors) but what Apple thought was "excess capacity" 18 months ago (which is when negotiations would have actually taken place) may well be "not enough" in a market that has grown as fast as smartphones. Also, we don't know the details of how much extra capacity is actually guarantied (and of course we'll never know).

So while I agree with you that Apple tries to avoid situations like this, that's not a sufficient reason to say it hasn't happened, especially given the rest of the situation.

Oh I'm not surprised by Apple's behavior at all. But seeing what the landscape is, I think they're in a unique enough position that things like the trade dress claims will produce a result that you (and Samsung) aren't going to like.

Actually, I'm not a fan of Touch Wiz, and honestly I don't really have a lot of sympathy for the ebbs and flows of corporations that don't directly impact me, so ultimately I don't really care outside of my interest in the case law. I do tend to have sympathy for anyone suffering from patent trolling (which in essence is what this is, just extended by a "new vision" of trade dress). I'm still curious what it is about Apple's market position that makes you think they can invoke a radical departure from previous trade dress rulings that goes far beyond what the original law called for (or its stated purpose) but we've already agreed to disagree on this.

I don't think that this is about leverage for parts because I don't think Apple would do something that would risk the entire company's financial fortunes. Apple can be very hard-headed and very confrontational, but they're also not stupid. If they felt that this was going to risk their supply line, or even if this was about that to begin with, they wouldn't go anywhere near it. (Apple, despite offering some innovative products, is still a very, very conservative company)

This part continues to flummox me. What is it about trying to apply leverage for components is a risk for Apple in your mind? Samsung isn't going to end this or future contracts because of it. Large purchasers use their leverage all the time to attempt to cut better deals for themselves, to deny components to competitors by buying up a supply, etc. Apple admits to this sort of behavior in their earning reports (trying to monopolize strategic commodities). Being the 800lb gorilla usually means you get whatever capacity you want, even if you didn't reserve it originally.

That's why this is going down - Apple never expected to hit this wall because manufacturers almost never tell them no. I'd note that all of the original negotiations would have been happening prior to the Galaxy S being announced.

So draw whatever conclusions you want, but Apple's actions make no sense if they're just upset about having their designs ripped off. They should have got an injunction last summer, when it would have really hurt Samsung and the Galaxy S line. If, on the other hand, there are larger issues at work, then this makes perfect sense. The lawsuit is intentionally as broad as possible and is aimed at all the competing products, the timing of the lawsuit as regards to Samsung products is irrelevant (hence the strange timing), but the timing as regards products Apple wanted to ship is telling.
 

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