Manufacturers go to court: Risks vs rewards

Manufacturers go to court: Risks vs rewards

This week Apple and Ericsson became the latest set of mobile related manufacturers to enter the courtroom.

Legal disputes between mobile manufacturers rarely come to a clear resolution, even when one firm wins it can be difficult to see whether it was worth the often lengthy legal process.

Are these cases an inevitable part of the game playing between the world’s biggest manufacturers? Or is it there much more to it than that. Here’s a look at the risks and rewards involved for those involved:



With any major court dispute there’s normally a significant financial motivation behind the complaint, even if on the surface the focus appears to be mainly on intellectual property. The cost of these lawsuits is also incredibly high, whether you’re defending your position or seeking damages. Once the case is over its getting paid damages can be a challenge too with numerous delay tactics and appeals available to those who lose. All of which makes the financial reward far from clear.

Verdict: Risk, it’s a costly process and the chances of seeing a return are limited



Calculating the impact of court cases on company’s reputation is a pretty difficult task. However, the process of taking a dispute brings certain accusations into the public in a way that cannot really be controlled. Lawsuits can also enhance a reputation if you are marketing your company as an innovator having filing a suit against someone for infringing copying your designs helps to feed this image. Ericsson was certainly keen to reveal its R&D budget alongside the news of its dispute with Apple.

Verdict: Risk, you can’t control how the information will be interpreted



Looking at the timing of lawsuits it’s interesting to see that they often come in the autumn and spring, there are legal reasons for this, but it seems significant that these are also time periods when new products are launched. Getting global publicity for a court dispute with one of you major rivals has its benefits. If you are a company without much of a public presence having a legal dispute with a major company like Apple certainly won’t harm your profile.

Verdict: Reward, all publicity is good publicity, particularly if you have a product out


Business strategy

Discovering the motivation behind a particular lawsuit can be very difficult. It can be the case that the purpose of a lawsuit is not for the eventual verdict but the process itself. A legal dispute can be used as a tactic for negotiation or in order to block someone using a particular type of technology. Other times it’s simply about making a point to your major rival. These reasons are the hardest to be able to see but they are often the most important.

Verdict: Reward, if you know what you’re doing it can be a very effective tactic


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