A Victory Against Monopoly

25 Aug

Don't Let the iPad and Galaxy Tab Touch! Regardless of Samsung’s self-serving jeremiad about “fewer choices, less innovation, and potentially higher prices”, Apple’s $1.05 billion damage award in its patent infringement battle against Samsung in a San Jose-based federal court could infuse competition into the smartphone sector, and other end-user consumer products and services as well.

The federal court jury in the patent infringement lawsuit between Apple and Samsung has presented its verdict after deliberating for just 21 hours and 37 minutes following the three week trial. This particular case started with Apple’s lawsuit last April and now the jury’s decision is that Samsung did infringe on Apple’s ‘381 bounceback patent with all 21 of its products in question. For the ‘915 patent on pinch-and-zoom, the jury ruled all but three of the devices listed infringed, and more damningly, found that Samsung executives either knew or should have known their products infringed on the listed patents. The jury has also found against Samsung when it comes to Apple’s contours on the back of the iPhone and its home screen GUI. The Galaxy Tab, was found not to have infringed upon Apple’s iPad design patents. The bad news for Samsung continued however, as the jury decided that not only did it willfully infringe on five of the seven Apple patents, but also upheld their validity when it came to utility, design and trade dress.

The amount of the damages against Samsung is in: $1,051,855,000.00 (see below). That’s less than half of the $2.5 billion it was seeking, but still more than enough to put an exclamation point on this victory for the team from Cupertino. The final number is $1,049,343,540, after the judge found an issue with how the jury applied damages for the Galaxy Tab 10.1 4G LTE and Intercept. The jury also ruled that Apple did not infringe upon Samsung’s patents with the iPhone 3G and 3GS, and has awarded it zero dollars in damage.

Brian X. Chen has an excellent analysis of the possible repercussions of this whopping damages award.

Other makers may become more cautious, too. Google, which makes the Android software that runs at the core of Samsung phones, will clearly feel an impact through its hardware-making partner. Microsoft, however, which is attempting to enter the market with new software, will feel less of an effect, industry experts said.

Apple has been the smartphone market leader. It defined the category in the way phones look and how users interact with them. Most popular smartphones today are a slab of glass and metal controlled through a touch-screen full of icons arrayed on the screen. Because consumers are familiar with that format, phones from various makers tended to look and behave similarly.

Those similarities might be the first things to change. “Companies in the future are going to have to consider how much they want their product to look and feel like their competitors’ products in terms of shape, size, the way it feels, the way it looks, how the icons are similar, or will the icons be quite dissimilar” said Robert W. Dickerson Jr., a lawyer who is the head of the West Coast intellectual property practice for Dickstein Shapiro, a patent law firm not involved in the Samsung-Apple case.

Microsoft and its main hardware partner Nokia, at the very least, should have an easier time of it. Robert Barr, executive director of the University of California Berkeley’s Center for Law and Technology, said that the user interface – the icons and other features that users see and touch – of the Nokia Windows phones look distinctly different from the iPhone. Nokia, a longtime maker of phones, also has a thick portfolio of patents to protect itself. For Microsoft and Nokia, which are trying to make a comeback in smartphones, this design distinction is a clear advantage in the internecine patent wars sweeping the industry as much as it is a marketing advantage.

But, according to Chen, it’s not just smartphones that could feel the heat.

While Google is not involved in this case, Apple was clearly going after Android all along, said Robert P. Merges, professor of law and technology at University of California Berkeley School of Law. If other handset makers using Android fear that Apple will take them on and win, might they shy away from Android? “There are a lot more players in the Android world who could be involved in the future in litigation,” he said. “And it’s going to raise the cost of everyone in the Android system if the damages stick.”

I’m no automatic fan of either Apple or Samsung, so I will happily see either fall. I am a big Google user, though. Amid all the hype about Apple vs. Samsung, little was said about Google’s plans for cloud computing and its other schemes to corral a dedicated constituency. Along with Nokia’s smartphones, the winners in this case (which is still subject to appeal), are consumers, because we have more choices now and technology firms will have to scramble to innovate. In the short-term, Apple will earn fees from licenses, and that could spur Apple to research new products.

Where this verdict gets really interesting is how it relates to other decisions by courts in other national jurisdictions, and how that expression of national dissent will affect how the international market for technology develops. A court in South Korea smacked both companies’ noses.

The Seoul central district court ordered Apple to remove the iPhone 3GS, iPhone 4, iPad 1 and iPad 2 from shelves in South Korea, citing they infringed two of Samsung’s telecommunications patents. The court also ruled that Samsung infringed one of Apple’s patents related to the screen’s bouncing back ability and banned sales of the Galaxy S2 and other products in South Korea.

Sales of devices recently released by Samsung and Apple including the iPhone 4S and the Galaxy S3 smartphones were not affected.

The court also ordered the two parties to pay monetary compensation to each other. Samsung must pay Apple 25m won (£14,000/$22,000) while Apple must pay its rival 40m won (£22,000/$35,000).

This follows another legal victory for Samsung in Britain, where the presiding judge went back to admonish Apple.

In the latest order, issued on Tuesday, Judge Birss told Apple to post a notice on its British Web site for six months to tell visitors Samsung did not violate its design patent. According to Bloomberg News, which said it had obtained a copy of the order from Samsung’s lawyers, the order requires Apple to take out advertisements to a similar effect in The Financial Times, The Daily Mail and several other British publications.

In a statement, Samsung said, “Should Apple continue to make excessive legal claims based on such generic designs, innovation in the industry could be harmed and consumer choice unduly limited.”

Apple has said it will appeal the first decision. An Apple spokesman, Alan Hely, declined to comment on the latest one.

While largely siding with Samsung, Judge Birss nonetheless turned down a request by Samsung for an injunction to bar Apple from saying that Samsung had infringed patents.

Who knew the law could be so nasty!

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