Topic Talk Tuesday – Patent Lawsuits: Apple sues Google and Google sues Apple

Hola Todos!

Some time-to-time, a media request comes my way.  Last week, I was asked to comment on Google/Motorola new lawsuit with Apple.  Here was my response:

 

My name is Daniel M. Ladik and I am as Associate Professor of Marketing in the Stillman School of Business at Seton Hall University.  Your request was forwarded to me as my main areas of teaching and research expertise include marketing strategy and social media/Web 2.0, as well as, personal selling and sales management.  I blog at www.dignuggetville.com.

In response to your request, I believe there are two main strategies corporations employ with regard to filing patent lawsuits.  The first is as a review generating means.  For the better part of the last 10 years, one of Kodak’s main revenue streams has been lawsuit payouts bringing in over 2 billion dollars.  These lawsuits take years to rule on or settle and most of the time the income earned from the lawsuit is substantially less than what was originally listed in the lawsuit.

The second and perhaps more significant strategy is to distract and/or slow down one of your main competitors.  Apple’s patent lawsuit with Samsung is a perfect example.  Apple doesn’t need the money from the lawsuit.  In their latest earning call on Tuesday, Apple earned 13 billion US dollars in cash in just 14 weeks to its already enormous 82 billion US dollar war chest.  Apple is only interested in slowing down Samsung and Android.

As the Steve Job’s biography will attest, there is no love between Apple and Google and Apple has thrown the lawyer attack dogs at Google for multiple infractions in the iPhone area.  Google’s acquisition of Motorola was curious at the time of its announcement.  The marketplace knows that Android tables are not even in the same ball game with the iPad and Google needed more control over hardware to make a more compelling product offering.

However, the treasure trove of patents that Motorola controls is perhaps more impactful in the short term than any market share gains in the tablet PC market.  Google now as the ammunition to go after Apple, to try and distract CEO Tim Cook and colleagues, and perhaps slow Apple down from the break-neck speed of innovation.  A close look at Google’s balance sheet illustrates that Google does not need the cash like Kodak did.  This is a Quid Quo Pro play by the boys in the Googleplex and the funny thing is, these lawsuits will not be settled in 2012 or even 2013 for that matter.  Perhaps it will be nothing more than a trade for Apple to drop its lawsuits against Android.

I hope this was helpful.  Please let me know if there are any questions or topics you would like further detail.

Best regards,

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

daniel.ladik@shu.edu

www.dignuggetville.com