Print 115 comment(s) - last by Motoman.. on Aug 30 at 10:39 AM

  (Source: Tech Digest)
Samsung lost an estimated $12B USD in worth from the decision

The weekend has passed, but the shock is still setting in after a potentially precedent setting jury verdict at the U.S. District Court for the Northern District of California, which left Samsung Electronics Comp., Ltd. (KSC:005930) on the hook for approximately $1.05B USD and facing at least temporary bans on most of its product lineup.

I. "Appleflation"?  Cupertino Company's Win Stirs Controversy

Apple, Inc. (AAPL) was quick to gloat about the victory, whose foundation certainly had some controversial aspects -- such as Apple's ability to re-patent inventions (pinch to zoom) in the context of capacitive multi-touch, Apple's ability to (essentially) patent the animation of natural phenomena (the rubber-band animation is a textbook visualization of nature's transient response e.g. see spring), and Apple's ability to "patent a shape" (Apple's attorneys argued that its design patents offered an exclusive right to make rectangular smartphones with rounded edges).

Thus in the aftermath of the trial, much of the controversy has focused not on whether the jury made the right decision, but whether the U.S. Patent and Trademark Office was crippling the free market with its lacking scrutiny.

Tech mogul Mark Cuban (also a prominent venture capitalist featured on the show Shark Tank) blasted Apple's decision in a series of Twitter posts, as noted by Neowin.  He implies that he is going to boycott Apple's products as a result of the lawsuit, and accuses Apple of conspiring to raise prices for electronics customers a term he calls "Appleflation":
Mark Cuban
[Image Source: Twitter/Neowin]

Mark Cuban
[Image Source: Twitter]

Google, Inc. (GOOG) makers of the Android operating system also chimed in, writing that the claims in the case "don't relate to the core Android operating system", explaining:

The court of appeals will review both infringement and the validity of the patent claims. Most of these don't relate to the core Android operating system, and several are being re-examined by the US Patent Office. The mobile industry is moving fast and all players — including newcomers — are building upon ideas that have been around for decades. We work with our partners to give consumers innovative and affordable products, and we don't want anything to limit that.

While that may sound like Google is throwing Samsung to the wolves, Google is aiming to offer Samsung and other Android OEMs powerful long-term protection, by filing a major new suit against Apple, which seeks to ban almost Apple's entire product lineup.

II. What's Next?  Bans, Appeals, Appear Likely

Reuters reports that after the ruling South Korea's markets had a wild day of trading, with 1.27 million shares of Samsung stock changing hands, and the company facing its worst single-day value loss in nearly four years.  Overall, Samsung shed $12B USD of its $160B USD valuation.  Apple, meanwhile added approximately $12B USD to its market cap this morning, reaching $634B USD, and creeping ever closer to Microsoft Corp.'s (MSFTrecord 1998 valuation, which adjusted for inflation totals around $850B USD.

Korean Won
The verdict cost Samsung $12B USD in value. [Image Source: 
SeongJoon Cho/Bloomberg]

In a statement to Dow Jones NewsWires, Samsung complained that the ruling would limit consumer choice, writing:

We will move immediately to file post-verdict motions to overturn this decision in this court and if we are not successful, we will appeal this decision to the Court of Appeals

It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners or technology that is being improved every day by Samsung and other companies.

In other words, Samsung will first try to sway Judge Lucy Koh to reduce the infringement and damages in the trial verdict stage.  The jury's ruling is only guidance for the judge's verdict/sentencing in this kind of civil case, although it usually closely resembles the final ruling.

If it cannot sway Judge Koh, it will begrudgingly move up the food chain with its appeal, while it continues to challenge the validity of Apple's broad patents in complaints to the USPTO.

A memo to employees from Samsung's management highlights how the U.S. ruling was much more punitive than rulings in other countries, who largely rejected Apple's design claims (Germany is the only other region to embrace Apple's design claims).  Samsung writes:

We initially proposed to negotiate with Apple instead of going to court, as they had been one of our most important customers. However, Apple pressed on with a lawsuit, and we have had little choice but to counter-sue, so that we can protect our company.
The NDCA verdict starkly contrasts decisions made by courts in a number of other countries, such as the United Kingdom, the Netherlands, Germany, and Korea, which have previously ruled that we did not copy Apple’s designs. These courts also recognized our arguments concerning our standards patents.

The Korea Times quotes a senior Samsung Electronics executive as saying; "It’s absolutely the worst scenario for us."

A South Korean patent lawyer involved in the case asserted, "Judge Lucy Koh will make the final ruling in the next few weeks. Samsung will try best to persuade Koh that we didn’t willfully infringe on Apple’s design patents. Samsung, however, is ready to bring the issue to the Supreme Court as the verdict was based on protectionism."

But a Samsung executive appeared more aware of the likely grim reality, remarking, "As far as I know, it’s very rare for the presiding judge to make a decision going against the verdict by jurors."

Thus Samsung's next move is to move the matter to an appeals court, and (likely) to work on emergency software patches to remove features like tap/pinch to zoom and new body designs, to escape product bans.

Unless the Samsung Galaxy S III escapes an ITC ban, Samsung's entire lineup may be temporarily forbidden from sale on the U.S. market.
Apple's next move will be to push for speedy product bans.  It will also likely seek to pressure the U.S. International Trade Commission to ban the Galaxy S III, not involved in the case, pointing that it has similar features as Samsung's infringing lineup (e.g. pinch to zoom).  If Apple can ban the Galaxy S III, it may be able to achieve the unthinkable -- secure a complete ban on the products of America's current top smartphone seller.

Sources: Samsung [memo], Mark Cuban on Twitter, Google via The Verge, Reuters

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

3 articles? JM must really be butthurt
By corduroygt on 8/27/2012 12:21:18 PM , Rating: -1
This is the third article about this subject, deal with it.

Besides, last I checked, you can still buy lots and lots of Android phones from many manufacturers. There is also the Windows Phone, so I don't see how your choices are being limited. Besides, everyone knows the best Android is Google's stock version and that's fine and doesn't infringe on anything.

All this hoopla over some lawyers getting rich...

RE: 3 articles? JM must really be butthurt
By xti on 8/27/12, Rating: -1
RE: 3 articles? JM must really be butthurt
By messele on 8/27/12, Rating: -1
By ritualm on 8/27/2012 12:50:13 PM , Rating: 3
Do you honestly expect Jason Mick et al. to run this place out of their own pockets, and expect them to not post anything negative on Apple?

Apple is perfectly content towards stealing everyone else's ideas, but infinitely intolerant of the reverse. Apple is losing because the competition works smarter, better, faster, and its solution thus far? Sue everyone, ban everyone, until only Apple products are left standing.

If Apple continues to get courts to rule in their favor, the only things you can buy in America anymore are things that have the glowing Apple logo plastered over them. That is not choice, sir... that is tyranny at its worst.

By theapparition on 8/27/2012 12:36:49 PM , Rating: 5
Besides, everyone knows the best Android is Google's stock version and that's fine and doesn't infringe on anything.

Apparently not everyone, since you don't know that apple applied for an injunction against the Galaxy Nexus, a pure Google device.

Apple only wants to destroy Android, not live it. While virtually printing money right now, they are shaking in their boots as they see their market share shrinking. Just as their PC market virtually disappeared. Only this time, they've covered themselves better with dubious IP.

You can always tell the difference between a fanatic and someone with logic. I'm quite content to have a thriving Apple as a competitor in the marketplace. However the fanatics only talk of banning the others' products completely, or throwing executives in jail.

By BZDTemp on 8/27/2012 1:10:44 PM , Rating: 2
Stop being silly. The ink on the verdict isn't dry yet and the Apple lawyers are still hung over on Champagne. Wait a few weeks and you could well see the amount of choices go down quickly.

Furthermore have you not realized how the patent was is escalating costing tech companies billions of dollars!

Dollars that could have spend on developing new stuff, paying the wages for designers, engineers, programmers, scientist and what not only now they go towards lawyers and owners of patent collections.

All this hoopla is bad for everyone in the long term even if there is short term winners.

In fact "everyone" could very well include Apple in just a moment - look at Motorola(google) vs. Apple and you'll see that if Motorola succeeds Apple will be banned from importing anything except perhaps keyboards and mice. If that happens Apple will be out of the hardware business in the US since all their stuff is made in Asia. Then Microsoft will really start laughing because they might end up being the only player left (aided by Nokia that is).

By kamiller422 on 8/27/2012 1:14:27 PM , Rating: 2
Google did not say the verdict does not affect core Android. It says it _mostly_ doesn't. Google hopes to invalidate the rest, probably patents '381, '915 and '163. And if they can't get them invalidated? Appleflation.

"DailyTech is the best kept secret on the Internet." -- Larry Barber

Latest Headlines
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM

Most Popular ArticlesAre you ready for this ? HyperDrive Aircraft
September 24, 2016, 9:29 AM
Leaked – Samsung S8 is a Dream and a Dream 2
September 25, 2016, 8:00 AM
Yahoo Hacked - Change Your Passwords and Security Info ASAP!
September 23, 2016, 5:45 AM
A is for Apples
September 23, 2016, 5:32 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki