Sanford Bernstein’s Pierre Ferragu, who rates Taiwan’s HTC (2498TW) Outperform, today writes that his impression of the patent wars in the smartphone business is that most of it will not lead to product bans.
Monday evening, of course, Apple was handed a partial victory against HTC when the U.S. International Trade Commission sided with Apple as regards two claims pertaining to one patent regarding Apple’s iPhone, but dismissed several other accusations by Apple that HTC had infringed in numerous ways with its own phones based on Google’s (GOOG) Android software.
Ferragu, writing Tuesday, had argued HTC will come up with a workaround to resolve the matter.
And then yesterday, as Ferragu notes in his report today, a judge in Dusseldorf, Germany, sided with Samsung Electronics (SSNLF) in saying the company’s revamped “Galaxy Tab” tablet computer, saying that Samsung had sufficiently moved past what Apple could protect in terms of design, according to the report by Reuters’s Matthias Invervardi.
Hence, Ferragu today concludes:
We see this as a strong data point in favour of our view that workarounds are very easily implemented by manufacturers and are welcome by courts. Samsung was able to bring its modified 10.1N tab rapidly to the German market after its 10.1 Tab was banned. Courts favour workarounds, as they promote differentiation, while avoiding disruption to competition in the marketplace [...] We believe manufacturers will converge progressively towards partial settlements in which they will share essential and quasi essential IP, but keep most important non-essential IP for themselves in order to “encourage” competitors not to copy their products. We see these settlements as being beneficial to the whole industry, as they will favour differentiation. We also believe that the large amount of ongoing litigation, will generate, on the way to these settlements, a lot of noise but little disruption on current competitive dynamics.