Let’s pretend you are the head of PR for Samsung and you are trying to help the Executive team in Korea come to grips with what you should do now. Emotions and chauvinism are running high and judgement could be impaired. The end of this USA Today article “Apple victory means soul-searching for Samsung quotes a former U.S. head of Samsung’s electronics business asserting the Galaxy Note smartphone with an overblown screen as an example of Samsung’s innovation. That dog don’t hunt.
It’s the Brand Equity Stupid!
Most of what has, and will be, written has dealt with patents and legal maneuvering but I believe there is a much bigger game at stake … Samsung’s brand. The Mac Observer has an interesting take here. In my opinion the brand equity they have been successfully building for decades is poised to take a major hit.
You could decide to continue the legal wrangling and prolong any damage award payments, but that poses a significant risk of being seen as someone significantly at fault and dishonest. If one digs deep enough there are far too many examples of behavior on Samsung’s part that can be taken that way and that might come to light, causing more damage to their reputation.
Cut the Losses and Move On?
There are several options open to Samsung:
- Continue the legal course, appeal and take it all the way to the bitter end.
- Pursue a first appeal and see what happens.
- Pay up to $3 Billion in damages, state you are doing so to put this all behind the company, portray Apple as the “bad guy” and don’t do anything in the future to infringe too clearly.
I don’t know what you would recommend, but I would push for #3 knowing it would likely get me fired because the Korean executives I know can be very harsh.
The ancient Chinese military general, strategist and philosopher, Sun Tzu, author of “The Art of War” said, “The general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom”.
Why?
There are many reasons, not the least of which might be, that you really know you did wrong. An even bigger one would be that you understand Apple and it’s marketing machine.
“Keep your friends close … and your enemies closer”, adapted from Machiavelli’s, The Prince.
A more complete statement is: “This means that you always want to keep your friends close to you because they are people you can trust and rely on. The second part of this means that your enemies are always going to be out there seeking to harm you so you want to keep an extremely close eye on them in order to make sure that they are not going to hurt you. It means that you always have to know what your enemies are doing. Or for a reference, as a war tactic, know what the enemy is doing so you don’t get ambushed.”
Understanding your enemy and your “friends” is critical to success in battle, be it true war or business war. Your enemy, Apple will not back down because you are only a means to an end. Android is the real target. They will do everything they can to carry out Steve’s final mission to cripple Android and they have the means ($ Billions), as well as, the intellectual property to do it.
As for your friend, Google … They could care less that you lose unless it begins to affect their ad revenue stream.
Do Good Market Research
Ignore the internet, postings and other detritus. Conduct some good, large-sample, thoughtful, market research in your target markets (hint: switchers) to see what they are really thinking about all of this. Use those results to shape how you proceed, but in any case, cut your losses.
Cut Your Losses and Move On
Yes, you will have to change aspects of your products. That is not bad. It’s really an opportunity to show that you can really innovate (not copy), keep your brand equity and avoid impacting your revenue. Reach an agreement with Apple on “necessary patents” that is reasonable. Take the high road and propose that the maximum royalty paid to all patent holders be some dollar or percentage amount (perhaps based on retail price) and that the real negotiations be based on contribution.
Declare “game over” and make this be your “mission” to ensure fairness to everyone. This makes you be the “good guy” in the ugly patent wars, not the “bad guy” innovation stealer.
A Footnote
I have worked for two Japanese companies and consulted with many Japanese, Chinese and Korean companies over the course of my career. They are very different from American companies in many ways. Suffice it to say that they have a different opinion of “intellectual property” than most other countries in the world.
What would you do?
