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Apple demands $2.5B USD from Samsung -- plus complete sales ban on most of its smartphones/tablets

Samsung Electronics Comp., Ltd. (KSC:005930) is in the middle of a tough week in the courts.

I. Samsung Accused of Destroying Evidence

The South Korean gadgetmaker recently celebrated outselling arch-rival Apple, Inc. (AAPL) nearly two-to-one in smartphone sales in the recent quarter.  Those strong sales are driven by the Galaxy S III, a smartphone whose hardware beats Apple's flagship iPhone 4S in nearly every category.

Apple is struggling to keep up in sales despite continuing to haul in record profits as the world's most profitable tech company.  Apple attorney Josh Krevitt sums up his company's plight, remarking, "Samsung is always one step ahead, launching another product and another product."

But Apple has been relatively effective at looking to stifle its competitor in court.

In recent weeks it scored sales bans on the Samsung Nexus smartphone and Samsung Galaxy Tab 10.1 tablet, although it failed to secure its most hoped for ban -- a kill shot on the Galaxy S III.

Now it's scored another small victory in its U.S. court battle, with Judge Paul Grewal of the U.S. District Court for the Northern District of California (San Jose/San Francisco) granting an Apple request to give an "adverse jury instruction." The judge told the jury that Samsung destroyed evidence that might have been pertinent to the case.

Shredding
Samsung is accused of destroying evidence. [Image Source: Office Products NYC]

Samsung's global electronics empire maintains a purpose-built central email network.  That network automatically deletes emails after two weeks.  That's run Samsung into trouble in past lawsuits, including a 2004 one where it received a similar sanction for the practice.

In the current case, the U.S. International Trade Commission had ruled that Samsung behaved responsibly.  While it acknowledged the automatic email deletion, it noted that the company had informed employees that they should be saving any documents pertinent to the case.

But Judge Grewal saw things quite differently.  He argued that Samsung did not do enough to monitor that its order was being enforced.  He remarks, "In effect, Samsung kept the shredder on long after it should have known about this litigation."

Samsung plans to appeal, but if it loses, the order could be a blow to its image when the trial goes before the jury.

II.  Apple Wants $2.5B USD

Apple is suing Samsung on the grounds of a slew of patents and trademarks.  The trademarks encompass largely deal with the look of certain icons -- such as a white email envelop on a blue background.  The patents cover a host of software features such as slide to unlock and multi-touch, as well as the "look" of the iPad and iPhone.

A UK court recently found that most of these patents were invalid due to prior art.  It forced Apple to print a public apology to Samsung acknowledging that Samsung did not "steal" the look of the iPad with its Galaxy Tab.  In recent interviews Judge Richard A. Posner, one of the most experienced intellectual property experts in the U.S., expressed similar sentiments remarking that the majority of software patents -- including Apple's -- should likely be ruled invalid.

Apple wants an exorbitant $2.525B USD from Samsung ($2B USD of which represents profits from devices).  It also wants Samsung to be banned from selling the majority of its Android smartphones and tablets in the U.S.  These provisions would surely provide a nice padding to Apple's already industry-leading profits, and help it overcome its product design difficulties.

Apple money
Apple wants Samsung's devices banned and Samsung forced to pay billions in damages.
[Image Source: SomanyMP3s]

Samsung sought a 2.4 percent royalty from Apple on its 3G patents in the U.S., a proposal that is also slightly outlandish, given that it's grossly above the industry standard for licensing fair, reasonable, and non-discriminatory (FRAND) patents.

III. Galaxy Tab 7.7 Banned Throughout the EU

More bad news came for Samsung this week when a decision by the Dusseldorf Higher Regional Court was expanded into a complete ban on sales of the Galaxy Tab 7.7 throughout the EU.  The ban comes courtesy of Community Design 000181607, which depicts a rectangular tablet:

Apple D'889 patent

It was found that the Galaxy Tab 7.7:
Galaxy Tab 7.7

...looked too much like the iPad, despite being a different size, having different back decals, and different ports.

Again, this would seemingly indicate Apple has a government-enforced monopoly on tablets in the European Union, but this is clearly not the case, as Samsung's Galaxy Tab 10.1N was deemed valid for sale thanks to the addition of extra metallic accents.

About the only conclusion one can thus draw from these divergent rulings is that bans are rather arbitrary and based on the sentiments of whatever court they happen to wind up in for the ruling.

The ban is tentative, pending appeal, and likely does not apply to the UK, which already found Apple's design claims invalid.

Sources: WSJ, PC Magazine



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RE: if i were sammy...
By michael2k on 7/26/2012 4:25:56 PM , Rating: 3
I'm sure the anti-Apple folks are going to downrate this, but I think it bears mentioning that Apple is required to sue over icons and designs under trademark and trade dress law. It's a "defend or lose it" system.

If the law says that no copying has occurred then Apple gets to keep their trademark and trade dress. If copying has occurred then Apple gets to keep their trademark and trade dress as well as damages from the copying.

If they don't sue, however, then Apple loses their trademark and trade dress protections. That is called genericide; Escalator, Aspirin, and Thermos are all eroded trademarks:
http://en.wikipedia.org/wiki/Generic_trademark

In this case it would appear Apple's success means they have to protect iPad from meaning tablet as well as their icons from meaning (respectively) Phone.app, Mail.app, Contacts.app, Music.app, etc.

Hate it if you wish, but that is how the system works.


RE: if i were sammy...
By Cheesew1z69 on 7/26/12, Rating: -1
RE: if i were sammy...
By michael2k on 7/26/2012 4:38:31 PM , Rating: 3
"ignorance of the law excuses no one"

http://en.wikipedia.org/wiki/Ignorantia_juris_non_...

I'm seriously trying to raise the signal to noise ratio here.

You seem to be actively trying to increase the noise to signal ratio here.


RE: if i were sammy...
By nolisi on 7/26/2012 5:55:27 PM , Rating: 5
quote:
Apple is required to sue over icons and designs under trademark and trade dress law


This doesn't make any sense as Apple is suing over patents, not trademarks. They're totally different things. Patents protect invention while Trademarks protects a word/idea that identifies the source of the good/service.

You can't really trademark a design (ie the actual tablet), but you can try to patent it. You can trademark the name of the device (iPad= Apples tablet).

Patents aren't governed under the same "defend it or lose it" system that applies for trademarks. You can't erode a patent, especially when you can now file for patents on things that you don't intend to produce.

Even though this argument is complete BS- it was a nice try. Not all of us are subject to the reality distortion field, however.


RE: if i were sammy...
By michael2k on 7/26/2012 6:03:50 PM , Rating: 2
Uh, no. Actually, Apple is suing Samsung over trade marks and trade dress.

It's only in the UK where Samsung sued Apple.

The US lawsuit, for example, covers patents, trademarks, and trade dress.

You can read more about the trade dress and mark suit here:
http://www.theverge.com/2011/04/19/apple-sues-sams...

Specifically look for
quote:
Third claim: Federal trademark infringement under 15 U.S.C. § 1114


RE: if i were sammy...
By Solandri on 7/26/2012 6:38:35 PM , Rating: 5
Correct. Apple also sued over the similarity of some of the icons Samsung used to the iPhone icons. Samsung rolled out updates to change many of the icons in response, since that was easier than feeding millions of dollars to lawyers in the courts.

That doesn't stop some of the purported trademarks from being silly. A white envelope on a blue background? Really? So since envelopes are universally white, only one company is allowed to use a blue background, one green, one red, and one black, and if anyone other than those four companies uses a white envelope icon, they're infringing trademark?

Another silly one was Apple purporting to own the angled green phone icon for placing a call. Motorola used a very similar icon on one of its first cell phones.
http://www.vintagebrickphones.com/bilderspeicher/M...

But in response to Apple's suit, Samsung rolled out an update changing it to blue. Apparently it's been settled or dismissed, since the icon is now back to green.


RE: if i were sammy...
By michael2k on 7/26/2012 7:07:21 PM , Rating: 2
It doesn't matter if it's silly, it only matters if the infringement was found not to occur.

Trademarks have to be defended else they are lost.

So, yes, if Apple files the trademark (and it isn't itself found to be a trademark violation), only one company can use that trademark. A classic and well known example is Mickey Mouse. No one else can use the character because Disney owns the trademark.

So long as Apple has trademarked it's icons (which, according to the registration paperwork, they have), then they can (and have to) stop others from using them.

The angled green phone icon is also the same case, and specifically regarding Motorola, has four key differences:
Shape of the button, round vs rounded square
Orientation of the phone, up vs down
Angle of orientation, diagonal up vs diagonal down
Presence of headset rest vs no headset rest

And, this is the key aspect, Motorola has to have trademarked the icon and defended it; if they didn't use it for 5 years, nor defended it, they cannot make any claim to it.


RE: if i were sammy...
By Bateluer on 7/27/2012 12:43:23 AM , Rating: 2
Far from it. Apple is not required to sue over rectangles or colored icons or colors of the device. They should never have been granted patents that are so broad, they apply to every device made in the last 20 years.


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