In what reminds old-timers of the bold move (to create the “baby Bells”) a new CEO at AT&T made decades ago as it fought massively expensive antitrust litigation, Tim Cook appears to have signaled a strategy change at Apple.
Steve Jobs’ defense of Apple IP was a line in the sand, vowing to spend all of Apple’s cash if need be. Tim Cook’s first response to this week’s ITC judge’s preliminary ruling that Apple products, including the iPad and iPhone, infringe a Motorola Mobility patent was to state that Apple would “highly prefer to settle versus battle” in the courts.
Bloomberg cites analysts who calculate the mobile device market to represent over 2% of the world economy. The stakes are high. If the judge’s ruling is upheld, the full ITC panel could ban importation of Apple’s infringing devices, an unacceptable outcome to Apple. It appears Motorola Mobility and Google now have enough bargaining power to force settlements of Apple lawsuits, and Tim Cook may see the light.
To be sure, Apple is not yet throwing in the towel. The focus of Apple’s appeal to the full panel will be that Motorola Mobility is unreasonable in its request for a 2.25% royalty on a patent that is part of a set of industry standards. However, the tone has changed, and so might be changing the strategic thinking at Apple. If IP value is a function of willingness and wherewithal to defend, Apple’s IP value will be affected by an attitude shift. However, company value may be enhanced if litigation costs can be reallocated successfully into R&D.