I think Florian Mueller has got it exactly right just here. The whole point of the
I often disagree with financial analysts, and I have disagreed on a couple of past occasions with Mr. Chowdhry. But the following statement is worth highlighting:
"There is no substitute for innovation -- it is a key driver for growth," Chowdhry explained, "but relying on imitation is a losing strategy as well, and Samsung has been heavily imitating Apple in many respects."
So far, Samsung's success in the marketplace does not suggest that "imitation is a losing strategy". Samsung's (high-quality and partly creative) imitation of the iPhone has been and continues to be a huge commercial success. Anyway, "strategy" is about sustainable success, not about what used to work.
Only IP enforcement can turn imitation into a losing strategy.
Here's the economic background to this whole area. Invention, innovation, these are public goods. This has a very specific meaning in economics: it does not mean things consumed by the public nor things that are good for the public. It means things that are non-excludable and non-rivalrous. Take, for example, something ridiculous. The idea that a tablet computer is best made in a rectangular form with rounded corners. As opposed to say round with rectangular corners. That someone has found this out is excellent, it's an advance in human knowledge and we like that. However, now that we as a species know that there's no way that we can stop (ie, exclude) other tablet makers from using the same format and shape. And further, (non-rivalrous) more people making their tablets as rectangles with rounded corners does not reduce the supply of rectangles (nor rounded corners) for the originators to make their tablets from.
So, someone discovers something, invents something, and this is good. We've found a better way of doing something. At first sight we might then think that everyone copying them is just fine. For everyone is now using this new and better method: we're all better off. However, here's where the problem comes in. That first person, the inventor, has made some effort to find out about these shapes. That effort has cost them time, effort and money. But because everyone can immediately copy her she cannot make any profit out of that effort expended.
Given that people often do (not always, but often) things in the hope of future profit this means that we think that there will be less effort devoted to invention than we might like. We'll get fewer new shapes for computers because fewer people will put the effort in because they cannot profit from it.
Thus we stick a spanner to that copying machine. We give the first inventors an exclusive right over their inventions for some period of years. Not for all time, because we do indeed agree that at some point other people should be able to copy this lovely new method. But for some years so that we encourage people to do that new invention stuff to the benefit of us all.
And that's what the basic point behind the entire field of patents is all about. It's nothing at all to do with people righteously having a property right in something they've created. It's not about natural justice either. It's an entirely constructed system purely about encouraging the maximum amount of innovation and invention that we think we can coax out of the assembled human intelligence.
As Mueller says, imitation is a very effective business strategy, one that can rack up very large profits. This is precisely the point of intellectual property law, to make sure that pure imitation is not actually used as such a profitable business strategy.
The perceptive will note that rectangular tablets with rounded corners has been asserted as a patent and therefore cannot be so ridiculous. But that was a design patent which is a rather different beast. The complaint was that a similar shape was tantamount to "passing off", making people think they were buying an Apple when in fact they were buying a Samsung. This claim failed, notably on the grounds that the Samsung offering had "Samsung" printed on it which people are most unlikely to confuse with "Apple".
