Apple’s Offensive Patent Protection Strategy Puts its Shareholders at High Risk!

By on December 29, 2011

Apple is much sensitive over its patent protection policy and has adopted an offensive patent protection strategy against all those companies indulged in copying its devices and softwares in its opinion. This all resulted in a biggest patent war of modern times in which Apple is battling against the alleged companies (manufacturing Android powered smartphones) involved in violating its copyrights and patent infringements including Google ( for Android) and Samsung ( for Galaxy Tab 10.1). However, a latest comprehensive report by Bloomberg suggests that Apple’s offensive patent protection strategy might prove a high risk for its shareholders than earning some pretty bucks by licensing the technology.

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Image: TB

 

“A scorched-earth strategy is bad news because it doesn’t optimize the value of their patents — because people will get around them,” said [intellectual property advisor Kevin] Rivette, whose clients include Android licensees. “It’s like a dam. Using their patents to keep rivals out of the market is like putting rocks in a stream. The stream is going to find a way around. Wouldn’t it be better to direct where the water goes?”

The report brings a very logical scenario for Apple and its shareholders to resolve the matter in appropriate duration; Apple, perhaps, could pocket $10 in licensing fees for each Android handset sold, on the other hand the company has already burnt $80 billion in this patent war against its rivals which it could use for gripping over many other markets globally if it selected the path for settling the patent issues with its challengers.

The company could offer to drop its more than two dozen patent claims against Samsung in exchange for an agreement to hold off using Apple technology for six months or a year, he said. Cook could also try to get price breaks or guarantees that would give it greater access to Samsung parts, Rivette said.

Contrary to it, many industrial and tech experts have the opinion that Apple’s offensive strategy seems logical as Apple feels no fear of being hit with an injunction by its rivals especially Google and Samsung. They also believe that Apple can prolong the war since it has patents, expertise and money….all those killer weapons required to win such kind of a war. They argue that it is Apple’s offensive patent protection strategy that has compelled its competitors to go slow.

“Apple has the patents, the money and the expertise to go to war,” [MDB Capital Group chairman Christopher] Marlett said. “I just don’t see why Apple would seek détente, since they’re the clear leader. Until they’re hit with an injunction by Google or Samsung, they don’t need to get serious about licensing.”

However, many techies and gurus suggest that there lies a point where Apple would have to ultimately change its strategy and reach settlements with its opponent companies.

If Apple’s rivals once begin to get any substantial success in winning injunctions against Apple, just like Samsung’s lawsuits against it over 3G-related patents, Apple finally would have to show flexibility and try to settle the continuing lawsuits.

 

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