It is for a purpose that the justice system of the US is considered functional while that of South Korea is considered functional-to-be.

Last week, the jury of an American court reached the verdict that South Korean Samsung was overly inspired by the products of American Apple Company. The jury, after comparing the patents and a group of products of both Apple and Samsung, ruled that Samsung shall pay around $1 billion in damages to Apple. Actually, it is not yet certain how Samsung will be affected by this trial exactly. Also, Samsung can appeal against the court’s ruling. But we still can make some observations on the innovation process on the basis of the lawsuit. I believe that a dysfunctional justice system is like a vampire, while a functional justice system is an indicator of investment quality. If you are wondering about my findings on Samsung and Turkey, please read on.

First, the key outcome of the lawsuit was the verification that Samsung is a follower, applying Apple’s innovations. Remember what Steve Jobs once said: “Innovation distinguishes between a leader and a follower.” So, the verdict gave an idea on who is the leader and who is the follower. I guess this is not good for Samsung.

The second one is a more general conclusion on the innovation process: the verdict of the jury provided a new example for the protection of the monopoly rent to be enjoyed by the innovator. It is evident that the one who first conceived of an innovation and the spent time and resources to that end has to earn a certain gain. Otherwise, no one would ever spend the time and energy to innovate. Otherwise, as Apple’s executives often argue, some companies will be innovating so that rivals in distant lands can imitate. This is how things work in the technology business. In fact, Samsung is already a parts supplier to Apple.

The third follows from above:  we have to expect decreases in the prices in the consumer electronics sector to be slower, at least during the current phase of transition. But this will apply rather for developed countries, not developing ones. From this perspective, we also can conclude that the current lawsuit will not cause the latecomers, that is, the companies of developing countries, to stand back and pity their fate.

Fourth, I think Samsung’s strength is its ability to take and implement decisions rapidly. Now, we can expect to see beneficial creative innovations from them. In other words, the consumer electronics and smartphone markets might buoy and go beyond the uniform.

Let me derive some conclusions for Turkey, too. The Apple-Samsung lawsuit is another example that a functional justice system is beneficial to the innovation process. The lawsuit was filed in April 2011 and finalized in a year and a half. Figures reveal that countries with faster judicial processes are more innovative. The US is the leader in innovations because it has a fast judicial system. The Turkish justice system, on the other hand, is malfunctioning and thus Turkey lags behind in the innovation indices.

Have you checked the latest figures in the European Union’s Innovation Union Scoreboard? The list divides European countries into four groups: innovation leaders, innovation followers, moderate innovators, and modest innovators. In the pity category of modest innovators are Romania, Bulgaria, Lithuania, Latvia, and Turkey, all of which are significantly below the European average in innovativeness.

What can I say? A dysfunctional justice system is like a vampire; it sucks your blood out and wastes your energy in vain. A country with a dysfunctional justice system cannot even be an innovation follower, let alone be a leader. At best, it can be a “modest innovator,” whatever that means.

It is for a purpose that the justice system of the US is considered functional while that of South Korea is considered functional-to-be. I recommend you to read TEPAV’s report on this subject.

This commentary was published in Radikal daily on 28.08.2012