One that caught my eye a couple of weeks ago had to do with a very strategic move Apple made regarding, 1) a few Apple Stores in East Texas, and, 2) Apple’s desire to trim ridiculous jury judgements in patent cases.
Bite The Hand
The Register’s slogan says it all. “Biting the hand that feeds IT.” This is as close to British snark as you’ll find in the technology world, and since Apple owns an outsized portion of tech headlines, you’ll see an outsized share regarding anything and everything Apple.
A few weeks ago I read that Apple was closing a couple of stores in East Texas? Why? As it turns out, the closure has nothing to do with poor sales as Apple plans to open two news stores nearby. Mall prosperity comes and goes, of course, but this move seemed strange.
The iGiant has two retail stories in the Eastern District of Texas, one of four legal districts in the US state, but has decided to close the shops and move to a new location less than ten miles away in the outskirts of Dallas.
The headline of Kieren McCarthy’s screed goes this way:
In hilariously petulant move, Apple shuts Texas stores and reopens them few miles down the road – for patent reasons
Petulant? Hilarious? I don’t think so, Tim.
Here’s the deal. Apple, as is the case with many large technology companies, gets sued by patent trolls looking to make a quick buck on a patent that Apple has infringed. Apple wins most of such suits, but some can and do cost the company hundreds of millions of dollars.
Where do such lawsuits get filed?
Texas’ Eastern District has become a favorite location for patent holders, both legit and trolls, because of what are perceived to be patent-friendly judges in the judicial area. But more importantly it is the location for Apple’s largest and most frustrating patent loss: against VirnetX.
Let’s be straightforward about this.
The folks in East Texas don’t cotton to rich folks from California, so about all that’s required to get cash from Apple in a patent case is to make Apple look rich and haughty, while the defendant appears poor to impoverished.
Why move two Apple Stores from East Texas to elsewhere?
The logic to this is that if Apple does not have a corporate location within the Eastern District it will be able to argue that any lawsuit against it should be relocated to a different district.
From that perspective, Apple could, conceivably, erase a few hundred million dollars of lawsuits and penalties just by relocating a few stores, and hope it gets a fairer shake when lawsuits crop up.
Petulance? Or, pragmatism? It depends upon your perspective.
On one level the decision to move doesn’t make a whole lot of business sense: its current locations are prime spots in a growing market. And its new store is close to another two Apple stores. But when an upset Apple exec doesn’t get his way, all the toys come out the pram.
That makes for some clever snark, but the reality is simple. Money talks. Keep Apple Stores in East Texas and continue to lose a few tens of millions of dollars a year. Or, move the stores, and get better odds with a jury comprised of citizens who are not so gullible. Apple chose the pragmatic option.
Even for Apple this is a laughably silly move carried out just because it can afford to do so and its fragile ego has been bruised. Of course the company refuses to admit that the move has anything to do with its lost patent case. Feel free to point and laugh.
I laugh more at The Register than I do Apple Inc.