The companies may be at "thermonuclear war", but at least the jury now has less to stress over

Like King Kong and Godzilla American phonemaker Apple, Inc. (AAPL) and South Korean phonemaker Samsung Electronics Comp., Ltd. (KSC:005930) are duking it out in a massive slew of international lawsuits.

I. Lawsuits Deck the Smartphone Industry's Two-Horse Race

The two phonemakers are the world's top smartphone manufacturers, with Samsung narrowly besting Apple in Q1 2012 sales, according to the majority of analysts, while Apple topped Samsung tidily in profit.  Together the pair took home an estimated 99 percent of the phone industry's profit, a figure that speaks to just how much the smartphone industry has become less a competition of Apple vs. Android and more of a two-horse race.

And the two horses in the race are engaged in a grueling legal slugfest.  The lawsuits kicked off in 2011, with Apple suing Samsung on April 15 citing a number of design and patent violations.  Samsung followed in suit later that month, suing Apple in South Korea, Japan, Germany, and the U.S.

King Kong v. Godzilla
Like Japanese movie monsters, Samsung and Apple are slugging it out, leaving a path of sales destruction in their wake. [Image Source: Toho Pictures]

Both companies have suffered setbacks.  Samsung has seen temporary bans on its tablet sales in Germany and Australia.  And Apple has seen features of its iCloud killed off in Germany (such as push email).  The latter ban remains in effect.

The crux of the two company's battle will come in the Apple suit and the Samsung countersuit filed at the U.S. District Court for the Northern District of California -- a San Francisco court.  Upon the encouragement of presiding Judge Lucy Koh, the two rivals entered into settlement talks last month.

There's a lot of cause to settle.  Samsung produces Apple's iPhone and iPad CPUs at its semiconductor fab in Texas.  Apple is highly dependent on Samsung from a manufacturing basis, and the company's component contracts constitute what is thought to be the majority of Samsung's semiconductor profit, which in turn makes up most of Samsung's non-smartphone profit.

In total, Apple is estimated to have paid Samsung $8B USD last year.

II. Companies Agree to Patent Reduction for Jury Trial

While the two companies have yet to declare a truce, there was some cooperative movement on Tuesday, even if that cooperation was court coerced.  Judge Koh was quoted as complaining to the companies' lawyers, "I think [the number of patents asserted is] cruel and unusual punishment to a jury, so I'm not willing to do it.  If you're going to trial in July, this is not going to be acceptable."

Apple heeded the call, dropping its remaining icon trademark claims (yes it was suing Samsung partially on the basis of icons), dropped 6 out of 8 of its Trade Dress claims, dropped 3 out of 7 of its design patent claims, and dropped 4 out of 8 of its technical claims.

Now there is a bit of a disclaimer -- for most of these patents Apple has only agreed to drop them for the jury trial.  It is still going to be asserting most of them to Judge Koh during the damages phase, assuming the jury finds infringement.

Samsung also responded to Judge Koh's call, offering to drop 5 of 10 patents in the jury portion of the trial.

Apple is pushing hard for pre-July 30 trial, claiming that it expects billions in damages from Samsung and that it is imperative to "put an end to Samsung's continuing infringement".

Samsung, meanwhile, has vocally complained about the size of Apple's lawsuits and says a summer trial should be out of the question.  It repeats its accusation that Apple is "seeking to compete through litigation" and dismisses Apple's intellectual property claims as "utility patents covering extremely minor user interface features, and design patents and trade dresses that offer far narrower protection than Apple urges."

Will the pair settle?  That remains to be seen.  But the patent reduction should not be construed as a friendly gesture between the rivals, given that it was court ordered and largely only applies to the jury phase of the trial, if a settlement is not reached.

II. Analysis: Samsung Perhaps Once Infringed Apple's Design, But Now Offers Dramatically Different UI

As I have outlined in the past, the design claims on body of tablets are rather alarming, as Apple has claimed to exclusively own the rights to produce thin rectangular devices with a primarily touch-screen interface and small button set.  Given that Samsung's tablets don't look particularly like the iPad in body design, these claims creating a troubling sense that Apple is making a slippery slope argument for ubiquitous ownership of the rights to produce tablets and smartphones.

Fortunately such an ambiguous and broad claim seems unlikely to hold up in court.

On the other hand, Samsung did arguably go asking for trouble with its first generation TouchWiz user interface, which on the apps screen was a virtual doppelgänger of iOS, with a similar black backing, similar Chiclet icons, a similar gray-backed shortcut Chiclet grid on the bottom of the screen with four items, and a similar dot-based page navigation interface.

While the buttons on the original Galaxy S and iPhone 3GS don't match up, Samsung does mirror the iPhone 3GS's Chrome rimmed look, right down to the corner curvature.  There are some definite differences in the body (inclusion of the front facing camera in the Galaxy S, speaker placement, logo placement, etc.) but overall the strikingly similar UI unfortunately has a tendency to visually accentuate the similarities of the two designs, while glossing over the differences:

iPhone 3GS v. Galaxy S
(Click to enlarge) 
Samsung's TouchWiz version on the Galaxy S (left) presents a near identical interface, visually, to the iPhone 3GS (right). [Image Sources: Slashgear (left); Ubergizmo (right)]

To be clear, my opinion is that Apple should not be able to trademark individual icons (e.g. a green phone button), but that there is a valid argument for allowing the narrow patenting and enforcement of the whole user interface, which Apple has done (let me reemphasize the "narrow part).  While I only believe in extremely narrow interface patentability and do not see the Galaxy Tab line's interface as being sufficiently similar in UI to the iPad, I must say that the Galaxy S does run afoul of even a very narrow design patent on the iOS (3GS era) UI.

Samsung, fortunately, has moved on to designs like the Galaxy S II and the Galaxy S3, which have seen the company's TouchWiz UI evolve away from iOS imitation (or moved to ditch TouchWiz altogether, as in the Galaxy Nexus):

Galaxy Nexus and iPhone 4S
(Click to enlarge) The Android 4.0 Ice Cream Sandwich UI aboard the Galaxy Nexus looks virtually nothing nothing like the iPhone 4S's iOS UI. [Image Sources: Samsung/Apple]

First impressions count, so Samsung definitely got off on a bad foot in trying to defend itself from Apple's claim that it was "cloning the iPhone" visually and in terms of user interface.  But the stark differences between the two companies tablets, the equal stark differentiation between more recent Samsung and Apple smartphones, and the likely invalidity of Apple's re-patents on designs like swipe to unlock and multi-touch should not be overlooked and should work in Samsung's favor.

Sources: Apple Insider, Ars Technica

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads

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