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Apple founder Steve Jobs referred to the company's biggest rival as 'grand theft Android'. Photograph: David Paul Morris/Getty Images
Apple founder Steve Jobs referred to the company's biggest rival as 'grand theft Android'. Photograph: David Paul Morris/Getty Images

Should Apple finally call time on smartphone patent wars?

This article is more than 9 years old
As the latest in an epic series of legal battles comes to an end, some of the main winners have been lawyers

Steve Jobs once described Apple's biggest rival as "grand theft Android" because he believed the main alternative to the iPhone had stolen his company's ideas.

This set the scenes for four years of costly legal battles, the latest of which played out in a California court at the end of last week, when the verdict may not have been what the late founder of Apple would have wanted to hear.

Neither Apple nor Samsung – whose phones run on the Android system owned by Google – looked as if they would be able to declare an unambiguous win as the latest case in a California court came to a conclusion late today.

Apple had wanted $2bn (£1.2bn) for what it claimed were infringements of its patents by Samsung's Galaxy S2, for instance the "slide to unlock" function on the original iPhone.

But it now looks as if it will get just $120m and end up having to pay $158,000 to Samsung after the jury in a Californian court decided it had infringed one of the South Korean company's patents in the way photos and videos can be organised into folders. The jury was expected to rule on Monday the precise sums to be paid.

"It's hard to imagine Apple sees this as a real victory. It's a small fraction of what Apple sought, and probably wasn't substantially more than Apple spent on lawyers. Clearly these patents aren't worth what Apple thought," said Mark McKenna, a law professor who specialises in intellectual property, trademark, patent and copyright law at the University of Notre Dame.

Those who have watched such patent lawsuits over the last four years reckon very little has been achieved by the companies bringing the actions. For the customer, too, the effect has been minimal. There have been no longstanding sales bans on phones or tablets and just the odd tweak to the way they work.

"There's been no effect on consumers," said Richard Windsor, who watched events develop while an analyst at stockbroker Nomura, and now runs the RadioFreeMobile consultancy. "It's been negative for the handset [profit] margins of both handset makers [Apple and Samsung], positive for margins of lawyers."

There are suggestions, though, that companies hoping to build handsets or tablets using wireless standards such as 3G, 4G or Wi-Fi will be better protected in the future.

Samsung may yet decide to appeal against the latest decision, and bring in Google, which owns the Android system on which its phones rely. Ilya Kazi, a partner at intellectual property advisers Mathys & Squire, said: "The only way to reach a long-term settlement is if both parties negotiate a solution, and that is only possible if it includes Google. This is certainly not the end of the battle."

The legal actions have thrown up some unusual winners and losers, and raised some interesting questions.

Who is the biggest overall beneficiary? Probably not Apple, once it has paid its lawyers. Instead, it is Microsoft, which has persuaded dozens of Android device makers to sign licences to patents it owns and which Android uses. Jan Dawson, who runs Jackdaw Research, estimates that Microsoft collected around $1.2bn in 2013 (and probably at least half that in 2012) from such patent licences – substantially more than it did from sales of licences for its Windows Phone devices.

The biggest single individual beneficiary? Sanjay Jha, former head of Motorola Mobility, for which Google bid $12.5bn in summer 2011 after losing out on a bidding war against Apple, Microsoft and others for a set of patents owned by the bankrupt Canadian telecoms company Nortel. Jha was able to push Google into raising its initial offer by a third, with a "golden parachute" of $65.7m – $13.2m in cash and a $52.5m payment for his stock options and shares.

The biggest surprise? Google told Samsung it would pay some of its legal costs. Documents read out in the most recent court case in San Jose showed that Google had said it would help with legal fees and any damages that Samsung might face from using certain elements of Android. Samsung, for its part, said in the documents that it was not seeking help. Asked by the Guardian about the arrangement, Google declined to comment.

The biggest loser? HTC, the Taiwanese company which in 2010 was briefly the biggest of the Android phone-makers. Apple sued, and HTC capitulated in 2012 and is now thought to be paying a per-handset fee.

The biggest spender? Google, which laid out the $12.5bn on Motorola Mobility. At the end of 2011, before the purchase, Motorola put the collective value of its patents, "completed technology" and "licensed technology" at $718m. When Google bought it, it revalued those patents and technologies at $5.5bn – clearly reckoning it could get more value out of them.

The most useful outcome? The European Union and the United States have clarified laws on the use of "standards-essential patents" (SEPs), which underpin the functions – such as 2G,3G, 4G and Wi-Fi – essential to any device seeking to be compatible with networks.

The emptiest threat? That one by Jobs when he asserted that Android was "grand theft". "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40bn in the bank, to right this wrong. I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this," Jobs said.

A discussion with Eric Schmidt of Google came to nothing, and Apple then proceeded to sue Samsung, HTC and others, alleging that their implementations of Android infringed its patents. But Apple has never sued Google directly.

It is possible that the latest verdict in the San Jose court will bring an end to the legal fights, although Apple is rumoured to be preparing lawsuits against more phone manufacturers. None, though, is expected to be as dramatic as those between the two giants of the phone business.

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