Apple is the biggest loser in patent war

Yesterday jurors announced the verdict on Apple-Samsung patent suit.  I wrote briefly about how everyone is loser because companies now have to spend more resources on defending against patent litigation and consumers will have less innovation to choose from at higher price.

I want to talk about Apple, the winner of yesterday's verdict.  Contrary to how it might look on the surface, Apple is the biggest loser of this patent war.

Here's why I think that is.

There are only losers in patent war

Jurors just awarded $1.05 billion to Apple against Samsung.  Samsung's claim of "form follows function" did not fly.  Apple just won a huge victory against Samsung.  Samsung lost big.  Although Samsung will appeal, it's not clear whether Samsung will be able to reverse the verdict completely.

So what does this verdict mean to you and me?

Please join us to help SHIELD Act get passed

Saving High-Tech Innovators from Egregious Legal Disputes (short for SHIELD) Act has been introduced by Rep. Peter DeFazio (D-OR) and co-sponsored by Rep. Jason Chaffetz (R-UT).  SHIELD Act protects software companies from paying legal cost when plaintiff (often patent trolls) loses legal case in court.  Basically it mandates software patent litigation expenses to be paid by patent trolls if they lose.

This is good news.  SHIELD Act will provide some measure of protection for small software startups so that they can continue innovating and create competitive advantages for U.S. companies against other high-tech economies around the world.

What else can $1,000,000,000 buy? 800 patents

Just as Facebook was announcing $1 billion acquisition of Instagram, there was another one billion dollar deal happening.  It was Microsoft buying 800 patents from AOL.

Microsoft announced $1.06B patent purchase from AOL;
winner is clearly AOL, but it will take more than
patent sales to turn AOL around.

Yes, Microsoft has agreed to pay $1,060,000,000 to AOL for 800 patents.  Not knowing any detail about those patent, only intelligent thing about that deal we can say is that each patent is costing Microsoft about $1,325,000.  It means there are some patents that will be worth more than that.

When you look at this deal side by side with Facebook's Instagram acquisition, it makes Instagram deal look like a bargain.  Why would Microsoft spend money to get these patents instead of acquiring growing mobile start-up like Instagram?