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What do recent legal losses mean for Apple?

Apple lost ground last week on the intellectual property front with courts in two countries finding against the technology giant.

In Germany, Motorola won an injunction against the sale of iPhones and iPad there while, in Australia, an ongoing battle with Samsung saw the court lift an injunction against the Galaxy Tab 10.1. The decisions have ramifications in terms of Apple?s legal strategy going forward as well as what the Apple-Google battle may look like.

?Every country is different and every court and judge is different but this is pointing in a positive direction that the trade dress approach is not enough for Apple,? said Michael Morgan, an analyst with ABI Research, New York, in reference to the Samsung case.

?You made your product to look like ours ? that was the approach that Apple was using to instill these injunctions,? he said.

?Now that they don?t have the trade dress strategy to work with they have to fight the intellectual property battle on its own merits.?

The design factor
In the Samsung case, Apple was trying to prove that the Samsung Galaxy Tab 10.1 copied the design of its iPad.

Design is a cornerstone of Apple?s strategy, with the company pouring significant dollars into designing products that consumers love the look of as much as they are interested in what they do.

?Apple has essentially the best design team on the market but, in the end, the court said the iPad is not differentiated enough from Samsung?s design to warrant an injunction,? Mr. Morgan said.

While Apple is unlikely to change its design philosophy anytime soon, the judgment could mean a change in its legal strategy as it continues to try to maintain its market position by going after other mobile companies who it deems are infringing its intellectual property.

?The probability of things not going in Apple?s favor in other similar cases increases,? Mr. Morgan said.

?Design will still remain a competitive differentiator for Apple in the real world,? he said. ?It just means that trade dress is probably not going to be a factor from a competitive sense in the legal realm.?

In the United States, a similar suit has Apple trying to block the sale of Samsung tablets has been slowly progressing. However, as a result of last week?s decision in Australia, Apple may decide to negotiate with Samsung or drop the effort.

Fighting mode
In the Motorola Mobility case, the Android smartphone make had complained that Apple did not license wireless technology used in its iPhones and 3G iPads.

The finding in favor of Motorola could have ramifications in the ongoing battle between Apple and Google, which owns Motorola, for dominance in the mobile space.

Google acquired Motorola for $12 billion in August and said at the time that the patent portfolio was a significant reason why Motorola was attractive. The company said it wanted to protect itself on the legal front as the number of intellectual property infringement cases has grown.

However, Google has consistently maintained that it will treat Motorola as a separate company and will not give it any advantages over other handset manufacturers.

?What is unclear here is are talking about Motorola or are we talking about Google,? Mr. Morgan said. ?How are they going to leverage this decision??

If Google were to go on the offensive, which would be a change in strategy from past behavior, it could use this win to prop up additional cases against Apple that might, for example, seek to block shipments to the U.S. or to gain a licensing fee from Apple. 

If Google takes a more aggressive stance on the legal front, the question will be if the strategy will support its Motorola business exclusively or the Android ecosystem more broadly. Google?s risks scaring off the other OEMs who have licensed the Android hardware if it focuses on Motorola exclusively.

?Google has helped other manufacturers in cases against Apple before but will they share the benefits of this win across the ecosystem or will Motorola get special treatment?? Mr. Morgan said. ?We don?t which way Google is going to go with that yet.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

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