Apple vs. Palm: the in-depth analysis

Apple and Palm kicked a lot of dirt at each other last week -- acting Apple CEO Tim Cook flatly told analysts that "We will not stand for people ripping off our IP" when asked specifically about competition like the Palm Pre, and Palm responded with a similarly-explicit "We have the tools necessary to defend ourselves." At issue, of course, is that the Pre employs a multitouch screen and gestures almost exactly like those made famous on the iPhone -- and if you'll recall, Steve Jobs introduced multitouch on the iPhone with a slide reading "Patented!" To top it all off, the past few days have seen a number of media outlets proclaim that Apple's been awarded a "multitouch patent" without so much as a shred of analysis, instead hyping up a supposed future conflict. That's just not how we play it, so we enlisted Mathew Gavronski, a patent attorney in the Chicago office of Michael Best & Friedrich, to help us clear up some of the confusion and misinformation that's out there -- read on for more.

Just a couple notes before we begin: first, we're not going to get into whether or not Apple or Palm should have been granted particular patents or if the patent system is working as it should -- that's a philosophical argument way outside the scope of any potential lawsuit that might arise. Suffice it to say that although we're aware the patent system has flaws, there's no debating that people and companies should be compensated for their work, and we're not going to begrudge Apple or Palm for trying to do everything they can within rules of the current system to protect and profit from the hundreds of millions of dollars each has spent on R&D. You can bet the public policy implications of the patent system don't keep Ed Colligan or Steve Jobs up at night; we're going to assume both sides will be using every trick and decades-old patent it can find to win a potential lawsuit.

Second, while we can sit here and play with an iPhone to figure out what exactly Apple's trying to patent, we really don't have much to go on with the Pre apart from some brief hands-on time with units running alpha-level code at CES, so we can't really make definitive calls one way or another. A lot can change between now and whenever the Pre is launched, so while we're going to do our best to identify the elements of the Pre and the iPhone that could potentially infringe Apple or Palm patents, treat the Pre stuff with an extra dose of salt.

So now that we've got the caveats out of the way, let's get started breaking down the areas where Apple and Palm can really do some courtroom damage, shall we?

Apple, multitouch and "the multitouch patent"

If you're to believe the conventional wisdom, Apple has a death grip on multitouch patents, which is why we haven't seen it (officially) implemented or fully exploited on other capacitive touchscreen phones like the G1 and Storm, even though they might be capable of it. Like all conventional wisdom, this meme is partially rooted in reality, and partially exaggerated for the sake of the story: while multitouch itself is nothing new -- Palm PR is actually sending out this 2007 Bill Buxton white paper showing roots of multitouch appearing as early as 1984 -- Steve wasn't kidding around when he said that Apple had patents on its particular implementation. The company purchased a company called FingerWorks in 2005, and several patents on the tech came along with founders Wayne Westerman and John Elias -- and Apple's been busy since, applying for several more multitouch patents in the three years since the acquisition.

Here's the thing, though -- patent #7,479,949, entitled "Touch screen device, method, and graphical user interface for determining commands by applying heuristics" that you might have seen touted around the web as Apple's "key multitouch patent"? It's really not, at least anymore. Patents become narrower in scope as they go through the approval process, and although we teasingly referred to it as "the iPhone patent" when it was initially filed, it now only covers touch devices that have a very specific interface feature: sensing whether or not you want to just scroll up and down in one dimension or pan around in two dimensions based on the angle you initially move your finger relative to the screen. It's way easier to explain this in a video:

There's a little more to it, but that's really the key element covered in the broadest claims of the patent. If a device doesn't have this feature, it doesn't infringe this patent. So in order for Apple to win a case against Palm based on this patent, it would have to show that the Pre has the same scrolling behavior. Which it very well might, as we saw at CES:

(Skip to the bookmark if it doesn't load automatically)

That looks awfully similar, if you ask us, but without having spent the same amount of time playing with the Pre as we did toying with an iPhone to figure out what this patent was getting at, we can't say for sure it's the same thing. Let's just say it'd be for the best if the Pre was always panning in two dimensions, rather than switching to a purely vertical scrolling mode -- Apple's patent really wouldn't be applicable in that case. Easy, right?

That's not the case for another iPhone interface patent, which is less to do with "multitouch" and more to do with touchscreen interface behavior (a common theme with Apple's iPhone patents, actually): #7,469,381, entitled "List scrolling and document translation, scaling, and rotation on a touch-screen display." This one covers a pretty famous iPhone behavior -- scrolling to the end of a document, revealing the edge, and then "springing back." Again, way easier to demonstrate on video:

Yep, the Pre does it exactly the same way:

(Skip to the bookmark if it doesn't load automatically)

It's not going to be easy for Palm to claim that the Pre isn't infringing this one -- there's just no denying the note-perfect reproduction of the iPhone behavior. We'll see if Palm releases the Pre with this interface intact, since Apple has at least the beginnings of a claim against this one.

So where's the "multitouch patent" everyone keeps going on about? Well, we certainly couldn't find the sort of broad patent that would qualify, and we didn't find much of anything that would keep anyone from using multitouch gestures like pinch-to-zoom -- in fact, Apple has a better patent position with regard to pinching gestures to cut, copy and paste than it does on pinching to zoom. We're not kidding: it picked up #7,339,580 "Method and apparatus for integrating manual input" last year, which straight-up covers "generating a cut command in response to a pinching motion between a thumb and a fingertip detected on a multi-touch-sensitive surface." You won't find anything like that for pinch-to-zoom, and at this point there are so many other multitouch systems (including Microsoft Surface and Windows 7) out there using the gesture that we don't know if Apple could convince Uncle Sam to dole out a patent on the idea. Go ahead and skip the Flintstones, there's your irony for the day.

Of course, just because Apple's current multitouch patents aren't as broad and sweeping as commonly assumed doesn't mean it can't put the hurt on Palm with what it does have -- and from what we've seen, the Pre's in some dangerous territory. (Plus, Apple still has plenty of pending patent applications out there it can try and tweak to target the Pre, but we'll get to that later.) We'll be able to find out way more when the Pre is actually launched -- trying to determine exact behaviors from short videos and hazy recollections is a road to ruin.

We do have an iPhone here, however -- and looking at some of Palm's patents, we can pretty much say that Apple's got some 'splainin to do.

Palm's patent portfolio

In all the rush to portray Apple as the big bad wolf, people seem to have forgotten that Palm is a comeback story -- it's been in the game since 1992, and it's got a pretty hefty patent portfolio of its own. Take #7,268,775, entitled "Dynamic brightness range for portable computer displays based on ambient conditions," for example -- it covers automatically adjusting display brightness using an ambient light sensor while leaving a user-selected brightness setting alone. Yep, that's exactly how the iPhone does it:

Or how about #7,007,239, "Method and apparatus for accessing a contacts database and telephone services"? Claim 10 is an almost exact description of the iPhone's phone app -- buttons for dialing, call history, contacts, and speed dial that stay on-screen as you toggle between them:

(510 is speed dial, 520 is the dialer, 530 is contacts, and 540 is call history)

Not only that, but it covers pulling up contacts by just typing in initials, which is totally in the iPhone:

Or how about #7,296,107, "System and method for detection of an accessory device connection status"? It covers leaving the display at full brightness instead of auto-dimming while connected to a power source during sync -- go ahead and try it, iPhone owners, that's what it does. And let's not forget 2001's greatest hit, patent #7,231,208, "User interface-technique for managing an active call": it describes in detail a conference call management system that's exactly like the iPhone's -- you put one call on hold while you make another, and then you can independently manage each call from a single screen. Look familiar?

If you're going to say that the Pre crosses the boundaries of Apple's spring-back edge scrolling patent, you're really not in a position to say that the iPhone doesn't similarly ape Palm's call-management patent -- or the brightness patent, or the contacts patent, or the dim-during-sync patent, or... you get the idea. Apple might be the more infamous IP juggernaut, but Palm has literally hundreds of patents of its own, and we managed to dig up four that seem to directly implicate the iPhone in just a few hours of searching. Imagine what Palm's lawyers could do, armed with their actual knowledge of what Palm owns and the motivation of some serious hourly fees.

The consequences of playing with fire

If you're asking yourself why Apple or Palm would develop a product that so obviously infringes on published patents, it's because somewhere along the line, each company made the decision that it could realistically convince a court that those patents were invalid -- most likely because they're "obvious," which is a word loaded with legal meaning in the patent realm. For our purposes, we can just say that "obvious" means that you can't patent a combination of different existing things, you have to do something new -- and while we're not going to judge Apple or Palm's patents on that standard, we will say that there's plenty of meat for the attorneys on both sides to chew on. All you really need to know is that by suing Palm, Apple's putting its iPhone patents at risk, and that's an awful big ante. Same for Palm if it sues Apple and loses -- it stands the risk of losing its patents, and we'd bet it's making a tidy sum licensing at least some of them out to other companies.

Speaking of tidy sums, we haven't even begun to talk about the money involved here, and it's a lot -- enough to seriously tip the scales. Let's say Palm were to win: not only might Apple lose its patents, the court would at the very least award Palm royalties for the patents the iPhone infringes, and at over 16m iPhones sold so far, even a few percentage points adds up fast -- we're talking hundreds of millions of dollars. If Apple wins? Well, Palm hasn't sold any Pres yet, so its exposure to royalty payments is much lower -- and potentially losing some older patents it may or may not even be using doesn't seem like a terrible punishment. Then again, if Palm loses, it probably won't be able to ship the Pre on time or as promised, and that could well be the end of Palm.

What both sides could do is tweak their pending patent applications to more accurately describe their competitors' products and then try to sue based on those -- it's actually considered good practice for tech companies to always have patents pending, so they can try and cut their competitors off. For example, Apple has a second patent identical to the "iPhone patent" filed with the patent office that it can certainly slightly revise to try and loop in the Pre's scrolling behavior. Not only that, but Apple also has tons of pending patent applications on multitouch that haven't really gone anywhere since they've been filed, like this one that purports to flatly cover all capacitive multitouch surfaces. Will it ever get granted? Who knows -- but it's certainly another card Apple can try to keep in its back pocket.

Wrap-up

So let's take a step back here and think about the bigger picture. You've got two large companies, each loaded up with tons of patents and pending patents, only some of which we've touched on here, and plenty of reasons to fight this one out: not only is Apple historically protective of its IP, it's got the massively popular iPhone to defend, while Palm's more or less staking its survival on the success of the Pre. It's going to be a bloodbath, right? Well, maybe, maybe not -- while we're not going to say that the attorneys on each side aren't mentally picking out colors for their new BMWs, it's important to realize that both sides stand to lose an awful lot in a potential lawsuit as well. Plus, to these lawyers' ears, Tim Cook's statements the other day sounded more like an attorney-coached nonanswer than some angry shot across Palm's bow -- it felt like Cook knew the question was coming and delivered his prepared response a tick early, not like he suddenly remembered Apple's multimillion-dollar patent portfolio and got fired up.

Still, we doubt this will all settle quietly in the night. More likely it's going to come down to whoever decides to blink first -- and unless Palm decides to go out in a blaze of glory, files a declaratory judgment action and tries to preemptively invalidate Apple's patents, we'd say the first shot's going to come from Cupertino. After that, it's anyone's guess as to what might happen -- this isn't anywhere close to a full-blown patent analysis, and we're sure the attorneys and law students out there will be able to find angles and tactics we've missed. That said, we'll go on record: all we want is for both Apple and Palm to come to the table, hammer out a cross-licensing agreement like other companies in the wireless industry do all the time, and get back to work on innovative, exciting technologies and devices. The lawyers get paid that way too, you know.

Disclaimer: Although Matt and Nilay are lawyers, they're not your lawyers, and this isn't formal legal advice or analysis. To the extent this article might contain any statements regarding infringement of a particular patent by a particular device or what those patents cover, those statements are attributable to Nilay, not Matt, who still makes a living by giving actual legal advice to actual clients.