Apple and Microsoft's Licensing Pact Spells Out Cloning Taboo
August 14, 2012 1:24 PM
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Thou shalt not clone, says the legalese
It's common knowledge that when Microsoft Corp. (
) briefly stepped in to save the
train wreck that was Apple
, Inc. (
) in the mid-nineties, the pair cemented their bond with a
deep cross-licensing pact
which has been responsible for the relative peace between the pair in these hyper-litigious times. During the
copyright infringement trial
being held at the
U.S. District Court for the Northern District of California
between Samsung Electronics Comp., Ltd. (
) and Apple, that licensing relationship was the topic of some questions, questions that raised interesting details.
Apple patent licensing/strategy director Boris Teksler is quoted by
as testifying, "The Apple and Microsoft cross-license does cover the design patents. However, we took special prohibitions from both parties so there is what I term an 'anti-cloning' provision... so we couldn't copy each other's products. There's a clear acknowledgement that there's no copying."
The cross-licensing agreement covered both design (aesthetics) and utility (technology) patents worldwide.
[PDF] of that 1997 arrangement it then highlighted the passage that Mr. Teksler was talking about:
In other words, Apple and Microsoft won't sue each other for individual features (e.g.
swipe to unlock
, or bounce animations) or minor design details (e.g.
a rectangular smartphone
), but if either company feels the other is "slavishly copying" the entire comprehensive product, they could -- in theory, at least -- sue the other.
Is this interesting? Certainly.
How does it affect the Samsung v. Apple case? That is unclear. Apple clearly claims that Samsung "cloned" its products.
Apple claims Samsung "slavishly copied" its products. [Source:
David Paul Morris/Getty Images
But ultimately this testimony could be used against Apple if Samsung can establish that its smartphones/tablets are as different from the iPhone/iPad in design and user interface as Windows Phone 7 handsets and Windows tablets are from the iPhone/iPad. Because if the level of differences is similar, and it was enough to constitute "slavishly copying"/cloning, the question would be why Apple isn't suing Microsoft as well.
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The cash infusion didn't save Apple
8/14/2012 7:25:50 PM
The 1997 cash infusion didn't save Apple, it was too small a figure made from diluting existing shares.
At the time Apple had $1.2 billion in cash and a $3 billion market cap. That following quarter they were already back in the black by reducing their product line from over a dozen computers to only four (consumer/professional desktop/laptop), and they further trimmed down operations by cutting out printers, PDAs, etc etc.
of streamlining and layoffs.
The "cash infusion" by Microsoft was only $150 million in restricted stock that was created by diluting already existing AAPL shares. $150 million in funny money created out of thin air means little compared to the billions in hard assets that Apple had even in their beleaguered state.
What was actually important was Microsoft committing to continue developing software for the Mac (IE and Office), putting confidence back into the platform. That was
more important than the funny money marketing that is still parroted by uninformed people. In turn, Apple dropped lawsuits against Microsoft and entered cross-licensing agreements, important in the late-90s given how under the microscope by the DOJ they were.
So the "investment" wasn't a real investment given the nature of the stock and the puny figure,
it was a way for both companies to save face.
It was basically simple easy-to-grasp marketing for the peons to latch onto. Its still working, apparently.
RE: The cash infusion didn't save Apple
8/15/2012 1:23:25 AM
Simply put, it's Microsoft being Microsoft
Throwing bits of cash everywhere and diversifying your investment portfolio is a financial standard all people should adopt, but unfortunately its something only mega-corporations seem to do, and we wonder why they are mega and want them to pay ridiculous taxes for being financially savvy.
On average, Americans save/invest less than 4% of their income. In Germany, people save/invest 10-25% of their income. Now compare the two national economies and I believe the point has been made.
Microsoft purchasing even a tiny percentage of Apple was neither a risk nor a disappointment.
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