I can see where you're coming from, but I still don't buy it. Comment inline:
Obviously it's a heuristic and not a determinant, and sometimes it will be wrong.
My assertion is that it is wrong frequently enough that it is a poor indicator of what you assert.
But consider the edge cases: If a company is expecting to totally dominate their competitors on the merits, they have basically no motive to litigate, because it's expensive and bad PR and they can get everything they want without it.
'Everything they want' is 100% market share. Very few companies have this. If suing will yield a net benefit, any net benefit, why wouldn't they sue?
Conversely, if a company knows their competitor's product is superior and they're about to enter a death spiral, they have every incentive to litigate because they have nothing left to lose.
The implication being that suing is a last resort 'scorched earth' strategy. I think it's pretty obvious that it is much more like the status quo. Joe blogs couldn't care less that Apple are suing Samsung. I.e. the cost of suing to the company doing the suing is fairly small.
So now consider your hypothetical where the product is only slightly better and competition on the merits would yield a slight majority whereas litigation might significantly damage the competitor and yield a large majority of the market. Obviously it could play out the way you suppose, but consider the incentives again: The company with the inferior product has the greater incentive to strike first because they have a prospective 60% of the market to gain rather than only 40%. Moreover, they suffer the greater risk in keeping the status quo, because they risk the competitor with the superior product deciding to launch an ad campaign informing people about the inferior competitor's product's flaws or taking various other measures to use their superior product to expand their market share at the cost of the inferior competitor.
Absolutely - the company with an inferior product should sue the hell out of the superior company (if they can), but then so should the company with the superior product if they think it will yield a net benefit.
Again, it isn't that every time a company sues another company it's because the litigating company's product is crap. It's just that it happens that way (significantly) more often than not, because of how the incentives line up.
I think the 'It's just that it happens that way (significantly) more often than not, because of how the incentives line up.' is a personal opinion with no corroborating evidence.
*nb* I am playing Devil's advocate here to a large extent and I think my argument falls flat in the face of a company that makes it clear that it is morally superior because it isn't playing the IP patent game (i.e. my major assumption is that suing will frequently yield a net benefit).
