You've likely heard of the current patent litigation between Samsung (NASDAQOTH: SSNLF ) and Apple (NASDAQ: AAPL ) , but even with a recent ruling going in the iPhone maker's favor, there's very little the company gains from the ruling -- and nothing for investors to get truly excited about.
Been there, sued that
Last week, the court awarded Apple a $119 million verdict after it was found that Samsung infringed on some of Apple's patents involving smartphone OS features. This week, the court will decide on additional patent infringements. But let's be honest: This changes nothing for Apple, Samsung, or the Android OS.
Over the past decade, these companies, along with a slew of others, have ramped up patent litigation as a way of pushing back competitors. But even when Apple, or another company, wins a case, it rarely tips the scale significantly in their favor.
Apple was seeking $2.2 billion for its current suit against Samsung, but received just a fraction of that. Even if Samsung has to pay out the full $119 million, it's nothing compared the company's more than $47 billion in cash. Nor is it likely to change how Samsung sells its devices.
Here's a quote from a Wall Street Journal article about Apple's recent win and how it won't change Samsung's strategy:
Federal courts have rebuffed nearly all of Apple's attempts to bar Samsung products, maintaining a high threshold for proving that any single patented technology influences consumer purchasing decisions.
Even in Apple's massive litigation win in 2012, the company couldn't convince the court that Samsung devices shouldn't be sold in the U.S. because of patent infringements. In the current case, Apple is still waiting for the judge to rule in favor of a ban on sales of the Galaxy S III and other Samsung phones. Good luck with that.
This changes nothing
So do lesser payout amounts and appeal opportunities mean that patent litigation is frivolous? No. But it does mean that while there can be winners and losers in litigation cases, it's not going to significantly change the position of these companies relative to the competition. Even when, in rare cases, a device is blocked from being sold for a short time, it's typically reinstated into the market. Once a settlement is agreed on or one company pays the other a licensing fee to use the technology, device sales get back to normal.
While patent litigation seems to promise that one company could completely decimate another in court, it's not going to happen for companies as big as Apple and Samsung. Even with Apple winning some battles, Samsung and Android have already staked their territory in the mobile market and even court rulings can't topple their position at this point.
To be sure, investors should be informed about Apple's litigation proceedings, but the outcome of these lawsuits isn't what investors should be focused on. The mobile battle isn't fought in the courtroom but rather in the consumer market. Investors win when Apple releases new products that millions of users want, not when a judge or jury makes decisions.
Here's where Apple could truly come out ahead
While Apple's been busy in the courtroom lately, the company's also been spending a lot of time and money developing the next tech revolution. An ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.