Samsung, Apple expected to make a truce for mutual interest

When imitation is not flattery: Samsung taking a bite off Apple

THE MAXIM “Imitation is the best form of flattery” clearly does not hold in the business arena where corporations count on making newer and better gadgets and staying one step ahead of the global competition.

Enter this frontier and a different value system is in vogue and is invoked for those who play the game of following the leader.

None other than South Korea’s electronic giant has bumped against this hard reality. In a significant US intellectual property judgement, Samsung has been slapped with a $1.05 billion fine for breaching design patent rights of rival Apple.

The ruling will make it illegal for Samsung to sell its Galaxy S II smartphones and a computer tablet. In a new filing, Apple has added the new flagship Galaxy III model to its list of items to be permanently banned in US. Samsung has appealed.

At issue was “free competition” versus copyright protection.

Samsung lawyers had argued in court thus: “There’s nothing wrong with looking at what your competitors do and being inspired by them.” In other words, it is fair, nay uplifting, to emulate the leader.

Apple’s lawyer countered with a rip-off charge, saying Samsung had “copied the entire design and user experience” of the iPhone.

The US verdict brings to the fore the gap between the West and East in dealing with intellectural property laws. It was also controversial in that before the US decision, a Seoul court had ruled in favour of Samsung and after that a Tokyo court did likewise in separate software suits.

The public reaction to the US ruling in South Korea and elsewhere is also diverse. In Singapore, a retired journalist san colleague said it spells bad news for consumers who want to buy compatible phones at lower prices. He uses an Android phone.

Another Singaporean said he prefers Android smartphone because “it is an open operating system and I have access to free apps”

Interestingly, the US electronic leader believes consumers’ long-term benefit is better served by its stand on copyright. Apple sued, said an analyst, to teach Samsung a lesson on software piracy. It also dares is rival to create its own product and compete on a fair footing.

Behind the Apple challenges is the longstanding gripe of Western companies that many firms in Asia are stealing their trade secrets. They are profiting from such flagrant disregard for intellectual property laws and should therefore be held to account. Some of them have negotiated copyright agreements in which royalties and other fees are paid.

As an analyst has pointed out, Asian firms are playing catch-up with their counterparts in US and Europe. Hence, they are content to follow the leader. Some companies have penalised but others have held their ground.
That was when Western firms overreacted and over-reached themselves in local jurisdictions.

In 2009, McDonalds took a vegetarian restaurant in Malaysia to court for calling itself McCurry. The US fast-food giant claimed its trademark was infringed. It lost its case after the Malaysian judge ruled that McCurry stands for Malaysian chicken curry.

Early this year, another US food giant Subway lost its trade-mark against a Singaporean sandwich retailer, Subway Niche. In her verdict, the judge said customers were unlikely to confuse the two brands, as the American food chain serves its ‘submarine’ sandwiches freshly made while the Singaporean eatery prepackaged ones.

These David over Goliath victories tell their own stories.

Up-and-coming Asian ventures appeared willing to take their chance with copyright laws for market share. This nonchalance has led some Western critics to suggest a group bias towards indidvidual intellectual property rights. They say it has to do with the group orientation underlying Confucian societies such as China, Taiwan, Japan and Korea.

This does not lead, however, to lack of concern for protection one’s secret potion formulas. Chinese wushu masters, for instance, are known to hold back some tricks from their students for any eventuality. And some families do keep their home-brew herbal cure within their own circle. In Singapore it is the popular Tiger Balm ointment that is now a commercial concern.

In computer chips and smartphone software, Samsang is matching its top rival Apple. This is seen in the roll out of its new Galaxy III smartphones and Nex tablets.

Indeed, Samsung is turning the table on Apple by counter-suing Apple for using its computer chips.

Joining the fray is a Chinese firm, Zhizhen Network Technology, which is suing Apple Siri for violating its Xi-ao-i-Bot voice assistant program patent. Asian companies are beginning to take on their Western counterparts on the same moral high ground, if not exactly under the identical set of rules.
The high-stakes suits will shed more light on the issues of free competition and protection of intellectual property.

Samsung’s appeal and its counter-suit against Apple will have bearing on the Chinese firm’s case. Will it be another instance of winner takes all?

A keen observer noting that up to one quarter of iPhone are Samsung parts believes the two rivals would aim for a settlement for mutual interest. Certainly, a win-win outcome will be good for innovation and consumer interests.

Up to one quarter of iPhone are Samsung parts, said an analyst. He also foresee that the two rivals would for mutual interests call for a truce in their legal wrangle.