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Apple-Samsung case is ‘far from over’

Posted by arnon_k On August - 28 - 2012 ADD COMMENTS

NEW YORK (CNNMoney) — A jury awarded Apple most of what it wanted from Samsung in its historic patent battle, but the war is hardly over.

Both Samsung and Apple (AAPL, Fortune 500) want at least some of the jury’s verdict overturned, and a hearing will be held on Sept. 20 to review all the post-trial gripes, quibbles and motions. Included in the Sept. 20 hearing: Apple’s request for an injunction against eight of the 21 Samsung devices that infringed its patents. If granted, Samsung could be forced to take those gadgets off the market.
After being dealt a near worst-case scenario verdict, Samsung’s lawyers will likely try a simple argument: no reasonable jury would have reached such a decision. Such a motion is standard procedure in these kinds of cases and they are almost always dismissed.

But some legal experts say Samsung might have a shot: U.S. District Judge Lucy Koh issued 109 pages of instructions to the jury, complete with 84 separate directives on how to fill out a 20-page verdict form. But the jury returned a verdict after just three days of deliberation.

Plus, it’s possible that some of the rulings were issued incorrectly. For instance, the jury initially awarded compensation to Apple for two Samsung smartphones that they said did not violate Apple’s patents. That was quickly corrected in an amended verdict.
Another issue is any sign that the jury was out to send a message. Jury foreman Velvin Hogan told Reuters, “We wanted to make sure the message we sent was not just a slap on the wrist.”

But the judge was clear in her instructions: “You should keep in mind that the damages you award are meant to compensate the patent holder and not to punish an infringer.”

“That’s why I don’t think this jury’s ruling will stand,” said Duke law professor Mark Webbink on his Groklaw blog. “This story is far from over.”
Apple may have some parts of the verdict to complain about as well.

Before the trial began, Judge Koh issued a preliminary injunction against a Samsung Galaxy tablet, noting that it was “virtually indistinguishable” from Apple’s iPad. The injunction meant that Samsung could no longer sell the device in the United States.

Yet the jury found that Samsung’s tablet did not violate any of Apple’s patents.

“Judge Koh appears to be of the mindset that the accused Samsung tablet easily meets the ‘substantially the same’ infringement standard,” said Chris Carani, a design patent attorney at McAndrews, Held & Malloy. “Apple has a greater chance than usual to succeed in convincing Judge Koh to play this extraordinary trump card.”
If the judge decides the jury’s verdict was valid, she will then weigh a host of other issues.

One of the first will be Apple’s injunction request against Samsung’s devices. That’s likely to be granted, most legal experts agree, but it could also easily be held off by a higher court.

Samsung will likely appeal the whole case if the judge doesn’t overturn the jury’s verdict, and as part of that appeal, the company will ask that an injunction be “stayed,” or postponed. Given the impact an injunction would have on the overall smartphone market, a stay would likely be granted, said Mike Pegues, a patent attorney with Bracewell & Giuliani.

An appeal typically takes a year to be heard, but given this case’s significance, most legal experts have said that an appeal will be heard in a matter of just a few months.

After that ruling is handed down, that should be the final word: The Supreme Court hasn’t heard a design patent case in 141 years, and it won’t likely start with this one.

“This is a high-profile case, but I don’t know that I see a unique issue in patent law that’s been presented by this case,” said Michael Kasdan, partner at Amster Rothstein & Ebenstein. To top of page

(Reuters) – Apple Inc’s legal victory on Friday over Korean rival Samsung Electronics Co Ltd was crushing but for one key front in its global smartphone and tablet patent war: Samsung’s Galaxy Tab 10.1.

The jury in San Jose, California federal court awarded the iPhone and iPad maker $1.05 billion in damages and said Samsung had copied critical features in the U.S. company’s products.

However, it declined to side with Apple on one patent, covering design elements on the iPad. That put the jury directly at odds with the judge in the case who, only two months earlier, had sided with Apple over allegations the Galaxy Tab 10.1 tablet ripped off Apple’s design.

U.S. District Judge Lucy Koh issued a pretrial order barring Samsung from selling the Galaxy Tab 10.1 in the United States.

Samsung is expected to file within days to dissolve that injunction against its tablet, a person close to the case said on Sunday. Representatives for Apple and Samsung could not be reached immediately for comment.

Samsung’s Galaxy touch screen tablets, powered by Google’s Android operating system, are considered by some industry experts to be the main rival among larger tablets to the iPad, although they are currently a distant second to Apple’s device.

Normally, when a preliminary injunction based on one patent becomes inconsistent with a subsequent verdict, the party subject to the injunction asks the court to lift it, said Mark McKenna, a professor at the University of Notre Dame’s Law School.

Yet while the jury absolved Samsung on allegations the Galaxy Tab violated Apple’s design patent, it did say the device infringed some of Apple’s software patents. That could complicate Samsung’s pitch, McKenna said.

“If Samsung or Google could design around those patents, use features that didn’t infringe, then they could sell the devices without violating the injunction,” McKenna said.

Additionally, Koh can overrule the jury’s decision and issue a verdict saying the Galaxy Tab infringed Apple’s design patent.

“Judge Koh appears to be of the mindset that the accused Samsung tablet easily meets the ‘substantially the same’ infringement standard — so much so that the facts lead to one and only one conclusion — infringement,” said Christopher Carani, a partner at Chicago-based intellectual property law firm McAndrews, Held & Malloy.

“Thus, Apple has a greater chance than usual to succeed in convincing Judge Koh to play this extraordinary trump card.”

If the sales ban is ultimately dissolved, Samsung could go after Apple for damages for the wrongful imposition of the injunction, legal experts said.

Samsung, which has various tablet line-ups with different sizes from 7 inches to 10.1 inches, introduced the Galaxy Tab 10.1 in June last year and recently unveiled an upgraded version, the Galaxy Tab 10.1 II.

The company said that Koh’s injunction would not affect the updated Tab 10.1 II.

The case in U.S. District Court, Northern District of California, is Apple Inc v. Samsung Electronics Co Ltd et al, 11-1846.

(Reporting By Basil Katz in New York and Dan Levine in Oakland, California; Editing by Paul Tait)

(Reuters) – Jurors felt Samsung Electronics Co Ltd should pay significant damages in the landmark patent trial against Apple Inc, even though they viewed Apple’s demands as too high, according to the foreman.

Apple won a sweeping victory against Samsung on Friday in a federal courtroom in San Jose, California.

A nine-member jury found the Korean company had infringed on several Apple features and design patents and awarded the iPhone maker $1.05 billion in damages, which could be tripled because the jury also decided the Korean firm had acted willfully.

Apple said it intends to seek sales bans against Samsung mobile products, which Samsung will oppose.

In an interview on Saturday, jury foreman Velvin Hogan, 67, said Apple’s arguments about the need to protect innovation were persuasive in the jury room. He also said video testimony from senior Samsung executives made it “absolutely” clear to them that the infringement was purposeful.

“We didn’t want to give carte blanche to a company, by any name, to infringe someone else’s intellectual property,” Hogan told Reuters a day after the verdict.

However, Hogan said Apple’s damages demand of up to $2.75 billion were “extraordinarily high,” partly because it was unclear whether Apple had enough component supply to sell more phones even if it had wanted to.

FIGURING DAMAGES

Apple’s damages expert testified that Samsung earned margins of roughly 35.5 percent on the products at issue in the lawsuit, on $8.16 billion in revenue. However, Hogan said they thought Apple’s percentage did not properly take into account many other costs identified by Samsung.

Samsung’s damages expert testified the margin should be closer to 12 percent, and the jury picked a number slightly above that, Hogan said.

“We wanted to make sure the message we sent was not just a slap on the wrist,” Hogan said. “We wanted to make sure it was sufficiently high to be painful, but not unreasonable.”

Hogan worked as an engineer for decades before he retired, and holds a patent of his own. He said jurors were able to complete their deliberations in less than three days – much faster than legal experts had predicted – because a few had engineering and legal experience, which helped with the complex issues in play.

Once they determined Apple’s patents were valid, jurors evaluated every single device separately, he said.

“We didn’t just go into a room and start pitching cards into a hat,” he said.

At one point during the second day of deliberations, jurors turned off the lights in the room to settle a debate about the potential influence screen brightness might have on Apple’s graphics interface. Their verdict: Apple’s designs were unique.

“All of us feel we were fair, that we can stand by our verdict and that we have a clear conscience in that we were totally not biased one way or another,” Hogan said.

The case in U.S. District Court, Northern District of California, is Apple Inc v. Samsung Electronics Co Ltd et al, No. 11-1846.

(Reuters) – South Korea’s Samsung Electronics Co said on Thursday it has not considered acquiring Research In Motion or licensing the embattled BlackBerry phone maker’s new mobile operating system.

A lack of support from potential partners such as Samsung could mean more trouble for RIM, which is seeking various options to turn around its embattled business.

Shares of RIM had risen more than 5 percent early on Wednesday after an influential analyst said it may license the BlackBerry 10 system to Samsung.

“RIM has already lost its initiative in the smartphone market and what is left doesn’t look really attractive to the likes of Samsung,” said Lee Sei-cheol, an analyst at Meritz Securities. “Should they have a deep patent pool, that might be the most appealing asset to potential acquirers.”

Samsung, the world’s largest smartphone maker, is the biggest seller of phones that run on Google Inc’s Android system, but it also makes phones using Microsoft’s Windows as well as its proprietary software called bada.

Its strategy of making phones with multiple platforms had raised speculation it may also license BlackBerry’s system to stretch its lead over rivals such as Apple and diversify away from Google, which now owns a handset manufacturing business after acquiring Motorola Mobility.

RIM plans to use its new operating system, known as BB10, in a next-generation line of BlackBerrys expected to launch early next year. It is considered RIM’s last hope of reversing BlackBerry’s steady decline in market share.

RIM’s shares have fallen more than 80 percent since the beginning of 2011 when Apple and other smartphone makers started to widen their lead on RIM, which once dominated the business.

Shares in Samsung closed up 1.5 percent on Thursday, versus a 2 percent rise in the broader market.

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