Presumed Valid

A day after Apple’s third quarter earnings announcements, it’s time for the reading between the lines and amateur Kremlinology.

Here’s one thing that doesn’t make me very happy. Grab the earnings call audio (and notice from the .m3u8 extension that it’s in HTTP Live Streaming!), and scroll to around 24:50 in. The question is from Bill Schultz of Goldman Sachs:

OK, and a quick followup. There’s been a lot of news about, you know, patent disputes of late. Some seem to have gone in Apple’s favor while others haven’t. Can you help us understand, Tim, how to put these events in context… how we should think about your IP strategy overall and perhaps, you know, how all this is potentially impacting the competitive landscape in smartphones and tablets?

The much quoted response from Apple COO Tim Cook:

We have a very simple view, here. And that view is we love competition, we think it’s great for us and for everyone… but we want people to invent their own stuff. And we’re going to make sure that we defend our portfolio fervently.

That seems to speak obviously to Apple’s recent ITC win over HTC. And it’s probably meant as propaganda and spin as much as anything else.

But notice that it ignores the patent cases that have gone against Apple, such as Kodak and Personal Audio. Does Cook’s absolutist stance on patent mean that maybe Apple should have “invent[ed] their own stuff” in these cases? Maybe it’s a more relative morality, like every tabloidy legal case where whichever side wins declares to the TV cameras that “the system works.”

The elephant in the room is the patent trolls’ assault on indie developers, the consequences of which are spelled out by The Iconfactory’s Craig Hockenberry in The Rise and Fall of the Independent Developer. Cook’s response didn’t address Apple’s attempt to intervene in the Lodsys cases, or its current absence from even more galling patent claims against indie iOS developers by MacroSolve and others.

Is Apple going to step into every case that claims third parties violate patents by using Apple’s APIs? Well surely, they’re not going to commit to that publicly — barring a surprise “Thoughts On…” letter from Steve — and with the rate at which this nonsense is picking up, we should watch to see if and when Apple backs off and leaves indie developers to their fate. Apple could probably survive the worst-case scenario, the total collapse of third-party iOS development, considering that’s how they launched the iPhone in the first place (and considering how well Android phones are selling, despite a far weaker app ecosystem).

What’s discouraging is that it’s clear, despite hopes to the contrary, that Apple has no philosophical problem with software patents whatsoever. Indeed, in the Lodsys case, it’s not trying to invalidate the junk patent; it’s asserting that Apple’s license of the patents covers its use by third parties. The instinct may well be in their corporate DNA (and that of other large tech companies) that patents are a critical strategic asset, something to be amassed and protected whenever possible. That MacroSolve could patent electronic form submission, in 2003, seems not to bother them. Patents are, apparently, too important to be doubted.

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