By now, everyone has heard the results of the law suit out of San Jose in which Apple was awarded $1.05 billion for damages incurred by Samsung’s infringement on Apple patents 
Apple, which prides itself on the style of its products, broke new ground by heavily relying on patents covering the physical design of its iPhones and iPads. (This is called “trade dress,” the overall look and feel of a device.) Tech companies have more commonly relied on utility patents, which cover the way products work rather than how they look.
The bigger story from an OM perspective, though, may be in the fact that the rival companies have a $5 billion supply chain relationship. Apple is Samsung’s biggest customer for microprocessors. The current case in many ways resembles the 1996 lawsuit by GM against rival VW. GM’s VP for Supply Chains, Jose Lopez, was accused of stealing GM’s plans for a new type of factory, dubbed “Plant X”, when he defected to VW. The settlement, in GM’s favor, recognized the role of each company as a supplier to the other. VW paid GM $100 million and was required to buy $1 billion in parts from GM.
In today’s world, competition–as we say in Chapter 11–is often between supply chains, not between companies.
Discussion questions:
1. Ask students to research details of the GM-VW lawsuit and discuss them in class.
2. The Samsung-Apple lawsuit in Korea played out differently. Why?