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Samsung expects to sue Apple over the iPhone 5

http://www.foxnews.com/tech/2012/09/20/samsung-expects-to-sue-apple-over-iphone-5/

The article above is about Samsung’s plan to sue Apple for patent infringement in the newly released iPhone 5. Samsung and Apple are the two major companies in the smartphone and tablet computers. The recent U.S. court case that Apple had succeeded grabbed worldwide attention, and imposed a sale ban on Samsung products, which didn’t last long after modifications. However, it gave quite amount of damage to Samsung’s reputation. In U.S. federal court in San Jose, the court ruled that Samsung had infringed 6 of Apple’s patents, whereas Apple infringed none. Fine of $1 billion was put on Samsung. Although Samsung cannot sue Apple until 2014 in U.S., if Samsung add iPhone 5 on other cases elsewhere, then they may impose sales ban on Apple’s new phone.

However, these cases between the smartphone superpowers are unlikely to impose significant bans on either side. They have filed over 50 lawsuits in 9 countries on infringement of their patents. This is very similar to the games we learned in chapter 6. Both companies had a choice of accusing the other for infringement, or just selling their product peacefully. However they both decided to sue each other. The table below is the table of Apple and Samsung’s patent war in simulation. The benefits indicated below are profits of selling their products.

 

                       Apple

Samsung

Not sue

Sue

Not sue

+10, +10

0, +18

Sue

+18, 0

+8, +8

 

 

 

 

 

 

 

 

 

 

Both companies will gain profits from selling their products peacefully. However, when one sues another and win, they gain profits of the other’s as well through sales ban. However, in suing the other company, they will have to spend quite amount of money. Therefore the profit is +18, instead of +20. When they both sue each other, they both gain nothing, but just spend -2 of their profits. This simulated game is how the situation is like for Samsung and Apple. They are now in (Sue, Sue) situation where both of them are spending money for lawsuits, but not gaining from them. They have to spend money on lawsuits in order to defend themselves. Sue is the dominant strategy for both companies with greater benefits regardless of the other player’s choice. Therefore they will both choose to sue, which is the current situation. When you look at the total profit, peaceful situation of (Not sue, Not sue) has the greatest amount of 20, whereas the current situation has only 16. The real world case of this game between Samsung and Apple shows how players don’t act based on total profit, but only for their own interest.

 

-Rhee-

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