Week 4 MKF3531 Case Analysis 25093584 WOOI TEIK LIM

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The growing pattern of patent infringement cases proposed that intellectual property
protection is critical to foster innovation. Without protection of innovation, firms would not
reap the benefits of their inventions and would focus less on research and development. Apple
emphasises heavily on their research and development activities where intellectual property
comes into place to protect Apple innovation. It is crucial as other smartphone giants like
Samsung has a very competitive market share. In 2011, it was alleged that Samsung had copied
Apples core design elements of its smartphones and tablets. Apple filed for a USD2.5 billion
lawsuit in the US but Samsung was ordered by judge to pay USD1 billion. Without the patent
protection by Apple, compensation will not take place since there is no patent to be infringed.
Samsung countersued Apple which centred on accusing them of creating barriers to
competition. It will harm the rate of innovation in the industry and ultimately affects consumer
choice. By filing countersuits in 9 countries, Samsung was hoping that the different legal
systems in these countries would interpret the Fair , Reasonable and Non-discriminatory terms
(FRAND) rule differently which foster fair competition. It contributes to the second key lesson
for this case study, where different countries have different legal systems. The culture in
different countries varies and Samsung seized this opportunity in hope of a positive outcome.
Although Samsung was ruled that they did not infringe Apple in some of the global cases,
Germany was the country where Samsung was barred from selling Galaxy 10.1. On the other
hand, in South Korea, the court rulings were in favour of Samsung. Both the companies had to
compensate each other and the most distinct verdict was that Apple was found guilty of
infringing Samsungs wireless technology. Scrutiny arose as the decision may have been due to
home country bias since Samsung originated from South Korea.
This brings us to the third key lesson which is ethnocentrism biasness. Samsung
comfortably sits at no.1 in Korean Best Brands and a pride of South Korea. The South Koreans
may gear their judgement towards their national brand like how USA politically supports Apple
claims. Apple won the case in their home country and USD1 billion was compensated. Before
the verdict, expert witnesses were disregarded and independent observer was asked to visually
assess the product to determine whether there are cases of patent infringement. Questions were
raised as the rulings were made by an all-American jury and coincidentally, the Apple
headquarter was just 16km away from the courthouse. It could be due to the sympathy to the
American icon of innovation in technology or being invoked by the tough US economy.
One more thing. The technological war is still not over. The clash of titans, Apple vs
Google could be overwhelming for the whole industry that uses both iOS and Android operating
system. The aftermath may include volatile market share due to brand switching of consumers.
Hence, the political and legal environment strongly affects the decisions of a company in terms
of product entry, marketing communications and stakeholder management.