Adam Hanft’s Interesting Take on Why Apple Beat Samsung in an American Court — and My Comment about Our Irrational and Anti-Competitive Patent System

27 August 2012

Theme — cultivating irrationality is a technique that works as well in court, as it does in politics — but that does not advance the human condition

When the game is about seeing how effectively we can push each other’s emotional and primitive-mammal brain centers, we better be skilled at finding and pressing those buttons.

Witness Apple’s success in beating Samsung in American federal court this last week, on the basis of our irrational and anti-competitive patent system.

Irrationality won, both in the law and in the jury’s interpretation of that law.

Irrationality squared, as an indicator of our times.

Background — regarding Apple’s iPhone and iPad patent win over Samsung in the Northern District of California federal court

Richard Lawler, Apple v. Samsung jury finds Apple's patents valid, awards it nearly $1.05 billion in damages, Engadget (24 August 2012)

Joanna Stern, Apple v. Samsung: Jury Rules for Apple, Recommends Over $1 Billion in Damages, ABC News (24 August 2012)

Vlad Savov, Apple sues Samsung for 'copying' the iPhone and iPad, Engadget (18 April 2011)

What happened in the California federal case?

From Richard Lawler:

The federal court jury in the patent infringement lawsuit between Apple and Samsung has presented its verdict after deliberating for just 21 hours and 37 minutes following the three week trial.

This particular case started with Apple's lawsuit last April and now the jury's decision is that Samsung did infringe on Apple's '381 bounceback patent with all 21 of its products in question.

For the '915 patent on pinch-and-zoom, the jury ruled all but three of the devices listed infringed, and more damningly, found that Samsung executives either knew or should have known their products infringed on the listed patents.

The jury has also found against Samsung when it comes to Apple's contours on the back of the iPhone and its home screen GUI [graphical user interface].

The Galaxy Tab, was found not to have infringed upon Apple's iPad design patents.

The bad news for Samsung continued however, as the jury decided that not only did it willfully infringe on five of the seven Apple patents, but also upheld their validity when it came to utility, design and trade dress.

Perspective — Apple has not won somewhat similar cases in some foreign courts

Although the American verdict, certain to be appealed, is important in the American market, Apple has been partially defeated on basically the same issues in some European and Asian courts.

See, for example:

Jason Mick, South Korean Court: Both Apple and Samsung are Guilty, DailyTech (24 August 2012)

Jason Mick, UK Judge Rejects Apple's Patent Claims, Says Galaxy Tab "Not as Cool" as iPad, DailyTech (09 July 2012)

Jason Mick, Android Win: Apple Blasted for Trolling, Sees EU Patents Decimated, DailyTech (05 July 2012)

Where Mick writes that:

The ruling comes in a London lawsuit brought by Apple against HTC. The ruling is a dangerous for Apple as it threatens to invalidate previous wins over Samsung Electronics Comp., Ltd.'s (KSC:005930) and others in Germany and the Netherlands, which forced the Android device-makers to modify their products.

His decision echoes my own analysis remarkably closely, citing technology from Neonode Inc. (NEON), who included slide to unlock on an icon in its patented July 2004 n1m smartphone:

Similar prior art referenced by HTC convinced the judge that Apple had habitually trolled the patent waters, patenting technology that other companies had already brought to market at the time of its filings. Two other key software patents were also found to be invalid due to obviousness and/or prior art.

Maybe not so clear cut, after all?

The earlier United Kingdom decision (which did not directly concern Samsung) and the Korean victory (which does and came Samsung’s home turf) means that the patent issues and evidence may not be as clear cut as the American jury’s relatively quick decision might indicate to some observers.

That may be what got branding expert Adam Hanft interested in why the American jury needed so little time to assess three weeks of voluminous evidence.

What brand expert, Adam Hanft, had to say about Apple’s U.S. court victory

Adam Hanft, who gives professional advice on branding, thought that Apple’s win was less about the evidence, than it was about the power of Apple’s brand operating in the jury’s subconscious.

Hanft thinks that people perceive Apple as being unusually innovative and Samsung not.

Consequently, he suspects that Apple’s courtroom strategy, which presented chronological evidence intended to show that Samsung had copied its iPhone, was intentionally founded on the idea of reinforcing this bias in the jury’s mind. Samsung became a laggard and copying student, dependent upon Apple’s innovative genius.

Consequently, Mr. Hanft thinks that Samsung’s attorneys took the wrong course in their closing:

Samsung's only hope was to recognize that this wasn't a legal struggle, but an emotional one. And to then fight emotion by honestly acknowledging it, and forcing the analytic part of the brain to kick in.

Their closing argument should have been honest and unexpected:

Look, we know you love Apple. We don't blame you. They make cool products. And they're innovative. But people you love can make mistakes, and Apple is making a big mistake here. They don't own and can't control all innovation. They're smart and successful and should compete in the marketplace, letting consumers make up their minds.

Instead, Charles Verhoeven, Samsung's attorney, made a dry and boring economic argument.

He sounded like a finger-wagging lawyer, not a consumer who the jury can relate to, when he said:

Your decision, if you go Apple's way, could change the way competition works in this country. Rather than competing in the marketplace, Apple is seeking a competitive edge in the courtroom.

In a million years, Samsung would have never had the courage to make an innovative argument like the one I described.

They would have been afraid to, well, think different.

It's the very same culture that holds them back from creating truly innovative products. The same culture that got them into this mess in the first place.

Is Adam Hanft right?

Probably, at least in part. Although I have trouble swallowing Hanft’s conclusion about Samsung’s alleged “me, too” character. What evidence is his opinion based on?

However, I do agree, that as an attorney, I would never have allowed Apple to walk into a courtroom, without forcing the jury to consider the amount of favorable and unconscious bias that corporation automatically elicits. Especially, so soon after Apple icon, Steve Jobs’ death.

If Samsung’s legal team did not mention the potential for brand bias, they were foolish. Even incompetent.

Hanft is correct to think that emotional branding matters enormously because it provides a biased backdrop to people’s thinking about virtually anything. Prejudice takes enormous effort to overcome, even a little bit.

Hanft’s branding idea returns us to a previous abbreviated discussion (in the political context) of the human brain’s two contrasting ways of approaching reality:

Cognitive System 1 is irrational, short-cutting, and favoritism based.

System 2 is rational, analytical, and evidence based.

As psychologist Daniel Kahneman wrote in his book, Thinking, Fast and Slow (2011) — System 2’s rationality will not engage, unless and until we motivate it to do some evidence-based analytical work.

Consequently, when evidence is on their side, persuasive lawyers have to force judges and juries to engage the effort-requiring System 2. This is because System 1’s lazy and mostly unconscious conclusion-leaping always favors subconscious factors that have little or nothing to do with rationally presented evidence.

And, more generally — what if the whole patent system is so screwed up, that rational analysis within its confines is impossible?

That is what I had concluded in the area of biological, biomedical, and pharmaceutical patents, even before I went to law school more than a decade ago.

People were patenting all sorts of things that nature itself had created. The proliferation of these should-never-have-been-granted patents made genuine biological and medical innovation that much harder and more expensive to do.

In short, the system was working exactly against the goals of the patent idea, which Article 1, Section 8 of the U.S. Constitution had initiated.

My experience as an assistant (state) attorney general reinforced these insights, particularly in the arena of pharmaceutical anti-trust litigation. The degree to which large drug companies abused patent law and patent-related regulations, thereby forcing anti-competitive market conditions on smaller corporations, was appalling.

In my distaste for the current patent law system (American and international), I am apparently in good company.

The highly respected U.S. Seventh Circuit Court of Appeals jurist, Richard A. Posner, an expert in patent litigation and economics, agrees that the entire system is so distorted that it needs to be tossed.

According to DailyTech’s Jason Mick, who follows patent litigation with a keen eye:

Judge Posner disappointed both Google and Apple when he threw their respective lawsuits out of court.

He said that while both companies had legitimate infringement claims, that he would not tolerate their refusal to license or attempts to abuse the patent system as an anticompetitive tool.

At 73, he is one of the older and more respected voices in intellectual property law. Nominated by President Ronald Reagan to the Seventh Circuit Court of Appeals in 1981, he's kept very busy penning dozens of books on economics and intellectual property law.

And what all his experience has taught him is that there's little hope for software patents and other types of intellectual property to be used as anything but anticompetitive weapons.

He comments, "It's not clear that we really need patents in most industries. You just have this proliferation of patents. It's a problem."

[I]t's hard to argue that there isn't some truth in Judge Posner's observation. Smartphone makers today are compelled to patent every single feature, no matter how trivial, from animations to icons.

Then they are compelled to waste money and resources to sue each other in a never ending legal war whose ultimate goal is arguably a quest for a state-enforced monopoly.

I recommend that interested readers look at the entirety of Mick’s article. It is an unusually well put together, lay summary of how poorly our current system works.

The moral? — When irrationality rules, we all lose

The irrationality-stoking game does not advance the human condition in a way that sensible people would choose.

Whether in court with Apple, or as regards an economy-imprisoning and innovation-squashing patent system.

PeteFree.com

Adam Hanft’s Interesting Take on Why Apple Beat Samsung in an American Court — and My Comment about Our Irrational and Anti-Competitive Patent System