Something else an injuction does is robs a manufacturer of any time-to-market advantage that they may have had releasing the product when they were actually trying to do so. Holding sales back by even a month can mean the missing of critical retail periods throughout the year. I'm not even arguing either way about the validity of the claims behind the injunction here -- if it turns out they are in the wrong, then they should certainly pay damages to Apple based on how much damage that they caused by doing the wrong thing (i.e. profits from sales).
How much the target of an injunction benefits from being allowed to sell their product is concrete and measurable. How much Apple benefit by preventing a competitor from placing a product on the market is, in stark contrast, essentially unknowable and thus difficult to compensate for if Apple turn out to be wrong.
The legal/patent system that allows this is broken, that's certain. But can we really blame Apple for using it to their advantage? It's sort of genius. Evil genius, but still...
I'd prefer to just leave the post at that, but to make a bit more of a contribution to discussion, fiduciary duty is a myth invented sometime in the 70s or 80s. No one has ever been sued for not maximizing the profits of the company the run. A corporation doesn't have to be evil, even if being evil were more profitable than being good. They can just choose to be less profitable and no one cares.
Given the choice, I'd much rather live in a mildly competitive, mildly cooperative capitalism where companies compete on things like price and quality (and salary!) without trying to burn the crops and salt the fields of the competitors the way Apple is now.
http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company
“The Court held that a business corporation is organized primarily for the profit of the stockholders, as opposed to the community or its employees. The discretion of the directors is to be exercised in the choice of means to attain that end, and does not extend to the reduction of profits or the nondistribution of profits among stockholders in order to benefit the public, making the profits of the stockholders incidental thereto.
Because this company was in business for profit, Ford could not turn it into a charity. This was compared to a spoilation of the company's assets. The court therefore upheld the order of the trial court requiring that directors declare an extra dividend of $39 million.”
The Wikipedia article notes that it's not considered 'current' law in the U.S., but this was decided in the early 20th century (~1920).
I just think we're fooling ourselves if we think that we can simply expect people to adhere to this with no tangible incentive, rather than build a system which has the desired result.
In other words, it's still the system that's broken. There are a lot of companies I'd like to boycott (and I certainly boycott and disagree with Apple's decision on this specific matter), but I don't blame the companies for trying to make money—regardless of "fiduciary duty" which is pretty irrelevant (I was just talking about the nature of companies to make money and dominate the market if possible; this would be true of any company, not necessarily just public companies with duty to shareholders).
This is a tough call, and I'm sure it was tough even for Apple's legal team. Is it worth tarnishing their image to attempt to hold a competitor from the market for another couple months? Looked at from a strictly logical standpoint, with profits enabling more technological developments and more production capacity, as well as more advertising and sales efforts, it just might be worth it.
You know that a whole team debated this and did dozens of calculations and eventually the call was made, but knowing Apple, this was no butt-hurt matter of principle. This was a market decision based on something they could do that would be beneficial for their company in the grand scheme of things.
Do I agree? Not really. I think the company's reputation is way more important than this injunction. But it's an exceedingly complex decision, based on many factors that I don't have information about, and they made a different decision. I honestly can't blame them for that.
It's easy to answer my question with a simple "yes." It hurts you. It doesn't feel right. Companies shouldn't be so impersonal. They should play nice. I know. We need to fix the system that allows despicable acts like this. But in the context, it makes perfect sense. "Blame" is not addressable here except to the system. (As is usually the case, but that's for another essay...)
The shareholders might.
Of course.
What kind of ridiculous justification is this? "But I had the car! It was ready to sell! I had someone who wanted to buy it! It's not right to stop me just because the car didn't actually belong to me, the guy I stole it from doesn't even know it's gone!"
Secondly, I was simply saying that injunctions can disadvantage some people or organisations, and that they don't even have to be people directly involved in the injunction.
Let's try again: imagine there were a truck load of Android pads going somewhere but the truck got stolen. The thief quickly gets the pads to his story and sends out advertisement everywhere that he has the new Android pad for $1! People are lined up outside the store ready to buy but before he can open the police show up, shut the store down and recover the pads. The people only lost out on a sale that never should have existed. It's not the fault of the police for stopping the sale, nor the person who reported the crime. It's the fault of the thief.
Likewise, if this product infringes patent(s) then it should not exist. Any disappointment to the customers if the fault of the company that made the illegal product, not the ones who stop sale (the judge) nor the people who reported the infringement (Apple).
You mention first-mover advantage ... that is exactly what patents are supposed to grant, you invent something cool, you get a patent on it, and then YOU get exclusivity on that invention for X years so you can recoup your costs of R&D.
If company Y owns the patent and company X clones it and sells it for $50 cheaper company Y is now disadvantaged even-though it spent all of the money researching and developing it in the first place. Apparently the Judge agreed that company Y is in the right and that company X should no longer be allowed to sell their widget until the lawsuit is settled.
The patents Motorola is using are called standards-essential, because many companies got together to create a standard, for example, 3G telephony, they pool their patents together and promise to license them to any manufacturer who wants to create a device that uses that standard, in this example, any cell phone that uses 3G, be that Apple, LG, HTC, RIM, anyone.
Since they have now created what is essentially a monopoly on that technology, they could force any or all of these companies to pay them exorbitant license fees because anyone who makes a 3G phone must use these technologies, and therefore these patents. That does not mean the patents are themselves valuable.
For instance, Motorola may contribute an encryption patent. There are many hundreds of other methods of encryption, so that patent is worth very little by itself, once it is selected for the standard, it is the only method that can be used to interoperate. If an manufacturer wants to use an encryption method they invented, they cannot, because their phones won't work with the cell towers.
Here is where we find the current litigation, Motorola says their patents are worth 2.25% of the entire value of an iPhone. There may be hundreds of patents in the 3G standard, if they are all worth 2.25% and there are 300, then the 3G patents alone represent 300*2.25% of the value of an iPhone, or 675%. So everything else, all the other ideas, innovations, etc are worth nothing.
This makes no sense, and the courts have said that these patents must be licensed on a Fair, Reasonable and Non-Discriminatory basis (FRAND). That means they must license the patents for what they were worth the moment BEFORE they were added to the standard. in the Motorola-Apple case that might be .05% of the value of the iPhone. Motorola and Google are using standards-essential patents as a weapon against Apple to force Apple to either pay exorbitant rates for the patent, or, more likely, force Apple to allow android to violate apple's non-standards-essential patents.
Thus Motorola is using a restricted, standards-essential patent in a manner which is explicitly forbidden by law. Judge Posner is extremely unhappy with Motorola and Google about this behavior. See the FOSS Patents Blog for more detail.
It is entirely unlike apple's use of patents, it has never used a FRAND encumbered patent to sue a competitor.
This comment invalidates everything else you wrote.
Apple's investment in R&D for mobile handheld usability and devices predates even the existence of some of these litigants, and predates the "smartphones" by them.
It doesn't, and it shouldn't.
You might be mad if your team doesn't win the game, but you can't say the winner wasn't the better player. But I understand your frustration when the field has no rules and the referees are corrupt. Unfortunately, those factors are part of this game.
Its the paradox of choice, and how it makes people unhappy. If a shop sells peanut butter that is chunky, but also another brand that is extra spicy. Suddenly, we can imagine a peanut butter that is both chunky and spicy.
So, the choice already feels limited with both products on the market and is now even more limited, when their feature set may not overlap.
And as for the suggestion that these patents are the result of R&D. They are not. Not like some of the frand patents actually are.
Originally, the patent system was invented to encourage sharing secrets. But if you cant keep it a secret, because its just too obvious, you shouldnt be able to get a patent. Patents are now mostly used in an anti competitive sense.
The patent system, at least in these days, is counter productive. And the US will in time eat itself up. Because from China to Europe, we dont care about these ip laws to the same extent, and dont really serve our interests.
So, holland, my country, is likely in favor of IP because with our current portfolio, the export of IP minus the import, is profitable. This is not the case for any eastern european country, nor for some of the more traditional economies in western europe.
So beyond morality, for many countries, IP law just means opting in to pay other countries. And unlike traditional goods, you cant block the export or import of IP. You can only hope to compromize on some kind of compensation.
This statement is only true if (features that violate patents) == (all features of the product), which is obviously not the case.
I appreciate that a patent is a state-granted monopoly on your idea. I feel it to be a mostly unhelpful right to be granting in the consumer software and device market. Regardless of how I feel about patents, though, an injunction prior to trial presupposes (on some level) that the charged party is guilty enough to warrant forcing them not to trade.
Injunctions are often helpful in potential libel cases, where the release of libellous information may cause largely unmeasurable but generally irreversible damages. I really don't think they're helpful when the extent to which the charged party may benefit is able to be measured (i.e. profit on sales) and the tangible outcome of that benefit redirected to whomever wins the suit (via the court-ordered payment of damages).
Big corporations could pretty much shut down any start up if they wanted to.
The reverse is not true. Could Panic Software have sued Apple because of the Audion / iTunes story?
So what good is the patent law if it only benefits the powerful?
The patent system doesn't really benefit the small developer. I was listening to Build & Analyze and Marco Arment was asked if he would patent features of Instapaper and he essentially said that it is more pain than it's worth. They don't have time time and money required to enforce it.
Like it or not, patent trolling is just getting warmed up.
Lawyers working on this issue is the equivalent of Keynes' digging holes and filling them up again statement. It's what makes Keynesianism so short sighted.
Monetary stimulation buy the government or any entity that creates money is different from transferring money for unproductive uses.
Keynes point was that giving out money stimulates economic activity, dis-idling hands. The hole-digging argument was that, while handing out money for productive activity is best (it has two benefits: immediate production of value, plus money that stimulates trade), even handing out money for non-productive activity is still valuable for the stimulating effects.
The reason is that I have bananas you want, and you have oranges someone else wants, and someone else has dirt nobody wants, if the government prints money to buy the dirt guy's dirt, and the dirt guy buys oranges, and the orange guy buys bananas, and the banana guy has some money waiting for someone to make something he wants (maybe the dirt guy will make a cool cartoon about oranges), that is better in REAL terms than a pile of rotten bananas and oranges and dirt and nobody getting anything they want at all.
Even though the dirt guy got paid for worthless work, real wealth was created by better allocating resources.
Surely, efforts would be better directed against the broken system that is being gamed by those companies, instead of dividing consumer forces, you know: Apple fans vs Google fans vs Microsoft fans vs x Other fans....
It would be much better to have everybody in action vs Broken Patent System.
Microsoft strategy is more interesting: they dont block products but rather use liscense fees that are slightly less than the costs of going to court against Microsoft. Eventhough, their patents are hard to enforce, and likely wouldnt win, its irrelevant.
So, to compare the behavior to other industries: Microsofts strategy is racketeering Italian mob style "we own this town", while Apple is raging a full on war, with any competitor, much like how a mexican drug cartel operates.
Google on the other hand, behaves more like a community bank. The members get free tech, but also take most of the risk, yet if they succeed, end up making Google more profitable.
The notion that all three companies are equally abusive, is ridiculus. They are definately operating with different policies. Whether that is due to convience or moral convinctions, is up for debate, but when looking purely at behavior in this space, Google is the good guy...
They pledged to license certain patents in Fair, Reasonable And Non-Discriminatory terms, when they contributed them to Telecom & H.264 patent pools; but now they are not very keen on keeping their commitment.
Although i do want to emphasize that only offensive parties are being hit with the frand patents. I really do think thats the most relevant moral ground here.
[1]http://arstechnica.com/apple/2012/02/apple-faces-double-wham...
Is Google/Motorola suing any party that has not first sued them or any of their partners for doing bussiness with Google?
http://www.fosspatents.com/2011/08/apple-is-also-suing-motor...
http://www.fosspatents.com/2011/08/proof-apple-attacked-moto...
Motorola filed the first suit.
Even in the article you have linked, the author says "...why my position is that Apple attacked Motorola even though Motorola technically won the race to the courthouse". Irrespective of what the author thinks went in the background, he admits Motorola filed the suit first.
Your own link states several times that Motorola was trying to pre-empt the attack and that Apple's attack was 'long awaited'. Do you really think Apple was not the patent aggressor in this case?
Why could it not be the other way around? Maybe Apple was preparing in secret, fearing a law suit by Motorola. That is equally plausible.
As an aside, Samsung's slavish cargo cult aping of Apple designs is unnecessary. They could come up with non look alike packaging or connectors, for example, but they are deliberately imitating down to the last detail, even in their TV commercials. This across the board play signals an intent, and may be influencing judges as much as the arguments. Could be why the coin flip court cases seem more often than not to land Apple's way.