Case Studies in Business Ethics and Corporate Governance

30 Case Studies in Business Ethics and Corporate Governance

by Samsung against Apple relates to fi ve patent infringements in regard to the optimization of data

transmission and synchronization of the phone with the PC.

According to Apple Insider, Android fans accuse the people at Apple that they copied Samsung

products. In support of this statement, a viral document was released containing an info graphics with a

comparison between Samsung F700 terminal and a fi rst-generation iPhone.

IMPACT ON SUPPLIER RELATIONSHIP

The relation between Samsung and Apple is very strange; this is because of the fact that unlike HTC,

Samsung is not just a smartphone manufacturer, but it is a company that manufactures important

components of smartphones such as SSD and CCD. In 2010, Apple purchased US$57 billion worth of

components, becoming the second largest customer of Samsung after Sony.

If the supply relationship between Samsung and Apple becomes strained as a result of this lawsuit, it

could eventually make it harder for Apple to source parts, and it could also signifi cantly affect Samsung’s

bottom line. Also, Apple has already been lining up some alternate supply relationships that could help

it sidestep Samsung altogether should the need arise.

Apple knows that Samsung is currently crucial to its ability to get product in stores, but because of

the way patent law works, Apple basically had to sue Samsung to protect its intellectual property since

Galaxy devices blatantly copy Apple’s designs. The way patent law is set up, Apple had to sue fi rst and

then negotiate later in order to work out potential licensing deals with Samsung. Continuing to let things

slide would have weakened its claims regarding held patents.

IPR as Strategic Advantage

Apple’s lawsuit action against Samsung has made wide-ranging charges about intellectual property

theft in the areas of methods, designs and general approaches on Samsung. Apple has specifi c rights

over its unique, patented methods for Multi-Touch, but is it right to patent the general approach of

interfacing with a device by “tapping and swiping” fi ngers on a screen.

The lawsuit against Samsung provides the following strategic advantages to Apple:

The company gets publicity. It establishes Apple’s design and methods and other aspects of its 1.

business as off limits.

It motivates the competitors to avoid building products that have similarities to iOS devices, 2.

which has helped Apple differentiate its brand in the marketplace now and will continue to do

so in the future.

STRATEGIES APPLE MAY ADOPT TO PROTECT ITSELF FROM

PATENT INFRINGEMENT

Apple corporate’s patent strategy may focus on the following two things to protect its patents from

infringement:

Management strategy:1. Patent rights are very useful in corporate management and acts as an

important weapon in the hands of management. Apple can use patents as a form of “goods”

and earn royalties on patents.

Technology strategy2. : Patent system is essential for the generation of new ideas and new

technologies. In the United States, patents can be fi led on the basis of the ideas alone rather

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