Apple IP More Important Than iOS

| About: Apple Inc. (AAPL)
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by Christian Deuber

Not only did Apple (NASDAQ:AAPL) win a recent patent case that bans the sales of the Samsung Galaxy Tab 10.1 tablet in the United States - the technology giant has also been awarded 27 new patents according to the U.S. Patent and Trademark Office. With most eyeballs and ears trained on speculation regarding Apple's next round of product introductions, it should be noted that none of these product innovations would exist without the appropriate intellectual property (IP) being filed and secured well in advance of any public product launch.

As evidenced in Google's (NASDAQ:GOOG) recent purchase of Motorola Mobility, the path to future device breakthroughs is often built on the back of innovations and inventions that have been created over the last few years. Without some sort of legal protection to allow the industry leaders to release these game-changing products into the public marketplace, the giants would be at a loss. These innovators would be forced to keep their ideas to themselves, and most likely behind the curtain, until there was some sort of defense mechanism against the dreaded copycats.

Apple's win against Samsung is considered one of Apple's biggest legal wins ever. Earlier this week, California Federal Court granted Apple a preliminary ruling against Galaxy Tab 10.1. This tablet device has been deemed substantially similar, in the eyes of the ordinary observer, to an Apple patent (D504,889) and virtually indistinguishable from Apple's iPad and iPad 2. If you find fault with this ruling, do your own side-by-side comparison the next time you step into a Best Buy (NYSE:BBY) or related retailer. You might just come around after you really spend some time with these 2 seemingly related technology platforms. Samsung will appeal this ruling and their product might not be blocked forever, but most of the public image damage has already been done.

Sure, imitation might be the sincerest form of flattery, but tell that to the public companies that are pouring millions of dollars into research and development to create the next big thing. Companies would never invest in innovation if the threat of a competitor knock-off could rain on its parade. That being said, the intellectual property race is on, and the first to file wins. Let's looks at Apple's most recent IP filings that from this point forward cannot be taken from them. I'm looking at you Microsoft (NASDAQ:MSFT). Could you please, just once, release a new product or software experience that did not feel like something we have all seen before?

Apple's most recent patents are (in human speak) related to scrolling, rotating and scaling documents on a touch screen device. How important is this? I humbly suggest another simple test. Next time you happen to be in the presence of a family member or friend and they happen to be joined by a young child - I challenge you to place an iPad in their hands. Most often, what happens next is truly joyous to watch. The young child, barely able to form a coherent, complete sentence - will intuitively grab the iPad and start swiping away on the screen attempting to find his or her favorite game or cartoon. This seemingly inborn response is being bred into our DNA (kind of) and Apple is doing everything they can to make sure that many iterations of this technology are protected under the Apple IP umbrella. Of course, Apple is not able to block all competitors from using similar technology, but the company can protect little pockets of innovation and usability that can mean the difference between "global game-changer" and "wow, this really sucks."

Of Apple's most recent 27 U.S. patents, one is directly related to its famous "pinch to zoom" function. With this navigational gesture becoming almost universal, we can all expect much more patent litigation down the road. This ongoing battle challenging "who did it first," will rage on for the rest of time. Apple has patented several gestures that are much used to today. These gestures include scrolling in the same direction of figure, pinching to zoom in, and pushing to zoom out. Most touch screen devices use these gestures now a day, so ultimately, future legal rulings will hinge on the subtle nuances here.

Other more technical Apple patents recently awarded relate to resizing content on a computing device, checking an acoustic test fixture, uninterrupted VPN connection service, adding speed effects to video, backing up and restoring user settings and data periodically, and light-sensitive displays. The light-sensitive display patent is the fifth light-sensitive display patent Apple has been granted in the last year.

The reason that Apple is so good at defining the complete user experience within their integrated ecosystem is often born out of the fact that Apple combs over and legally protects every little piece of technology that, when combined with other patents, creates a seamless interaction between device and user.

Apple also won a new patent for an inductive charging docking station. The interesting development here is that Apple has not yet introduced a product that utilizes this technology. If you want to know where all the Apple rumor sites get their tips regarding the next Apple product launch - as you might have guessed by now - many hints are given away through these public records related to patent filings.

At the end of the day, all of these new patent wins for Apple are huge. Whether you're an Apple investor, an Apple fan, or just simply a technology advocate - these patents related to scrolling, rotating and resizing on touch screens is the future. Apple stock was trading at $567 earlier in the week prior to the patent rulings. The stock went on to close the trading week with a price of $584 - a nice little $17 bump. It's this steady cadence of IP wins coupled with fresh product launches and nuanced software updates that keeps Apple front in center and bodes well for long term investors.

With numerous mobile patent lawsuits currently underway between Apple, Samsung, HTC, Motorola, and Nokia (NYSE:NOK) - many of the winners here will be based on the strength of their patents. One more thing (cue Steve Jobs sound bite) - Apple has lost some recent battles against Samsung and Motorola Mobility regarding several other smartphone lawsuits…so the glowing fruit brand is not always the winner regardless of what related stock prices looks like. Expect a $600 stock price as more IP updates become official in preparation of Apple's upcoming iPhone 5 launch.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.