Apple’s courtroom collapse
A San Francisco federal district court judge threw out most of Apple’s wide-ranging copyright-infringement suit against Microsoft Corporation (NASDAQ:MSFT) and PC maker Hewlett-Packard Company (NYSE:HPQ) on April 14, 1992. It was not the terminal end of Apple’s legal fight, but it was a nearly fatal blow to its case after millions of dollars and man-years of legal work had been expended on both sides.
Apple Inc. (NASDAQ:AAPL) had sought $5.5 billion in damages from the maker of Windows and one of its largest licensees over what it felt was infringement of the “look and feel” of its Macintosh operating system. Microsoft’s Windows 2.0 and 3.0 and HP’s NewWave (a graphical and productivity extension of Windows for Hewlett-Packard Company (NYSE:HPQ) machines) were purportedly not covered by a licensing agreement Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) had signed for the development of Windows 1.0 — at least not in Apple’s view. This proved to be a focal point of the case, and Apple’s undoing.
Apple Inc. (NASDAQ:AAPL) lawyers’ insistence on using the phrase “look and feel” in pursuing its case was a major reason Judge Vaughn Walker threw the case out, as he noted that a suit based on the infringement of the overall Mac operating system’s operational style was “a fundamental misunderstanding of the law.” He also rejected the notion that the Windows license was no longer relevant, as simply pointing to similar elements in later versions of the operating system was not enough to build a case.
Of the 189 elements Apple Inc. (NASDAQ:AAPL) claimed Microsoft Corporation (NASDAQ:MSFT) had infringed from its Mac operating system, all but 10 were ultimately found to be covered under the Windows 1.0 agreement, and the other 10 were thrown out in the April 14 ruling. One of the few things left on the table for Apple to scrap for was the use of a trash-can image to signify deleting a file, hardly enough to give its legal team much cause for hope. Apple would pursue a narrower case for another two years but gained nothing in the end, as its appeals were all ultimately denied.
Apple Inc. (NASDAQ:AAPL)’s failure in this case would prove to be one of the lowest points in its operational history, and its loss of control over graphical operating-system standards significantly weakened its market position just as the market was truly beginning to blow up. In recent years, Apple has again sought out the protection of the courts over the look and feel of its designs. If history is any guide, these cases will do nothing to help it fend off competition this time, either.
The article 3 Dow Bellwethers Clear Their Paths to Greatness originally appeared on Fool.com is written by Alex Planes .
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology.The Motley Fool recommends Apple and owns shares of Apple and Microsoft.
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