Apple Finally Invites Key Supplier Samsung to IP Litigation Party

The big news yesterday was the extraordinary Apple earnings story and its effect on the stock market’s short-term memory. Earlier news this week, however, reported that Apple is suing long-time chip partner Samsung for patent and trademark infringement and unfair competition, with public relations emphasis on similarity of design: “Rather than innovate and develop its own technology…Samsung chose to copy.” Here’s a for-fun look at the iPhone 4 and the Galaxy S side-by-side.

Despite the earnings news, those in Apple charged with looking past the next three months clearly feel the Android heat. Still firmly entrenched as market share’s number one, Apple has been caught glancing back several times, with ongoing IP legal contests involving Kodak, Nokia, Microsoft, HTC and Motorola. But the dispute with Samsung appears to be more desperate; Samsung has been a critical element in Apple’s supply chain for over five years (that's nearly 15 smartphone years).

The most interesting negotiations, if we can shortcut the process, will be over trademarks and trade dress. If it feels like an iPad, sounds like an iPad and looks like an iPad, does that make it a de facto design infringer?  Are there really other ways to design the product that would improve productivity, or, as Samsung will likely argue, did optimal functionality require the design chosen?

More telling still may be in the level of aggression in Samsung’s response. We hear the war drums beating, but no smoke has been sighted. Being Apple’s chip supplier has significantly improved Samsung’s financial lot. Today, Apple certainly can re-source the chips; can Samsung replace the $7B  in revenue?  If they feel they can, don’t bet against Android’s continual capture of share.

(If you can't tell the Smartphone litigation players without a scorecard, Harry McCracken built one for you.)