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  (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

RE: Can somebody explain to me...
By messele on 8/27/2012 12:21:49 PM , Rating: -1
That's not explaining anything, but putting across your own biased views.

quote:
managed to get patents for things that are obviously unpatentable


There's your money quote right there. Genius! and you call that other guy a dipshit?

Basic geometric shapes? No, a rectangle is a basic geometric shape, round the corners off and it's no longer basic. Familiar yes. Basic no.

quote:
or for animations that mimic nature


What the? You pinch to see further in nature do you? That is a classic comment! Nice!

quote:
This is exactly the worst possible ruling any court could have ever made


Oh hell yeah. No court has ever convicted an innocent man or released a rich murderer. What really matters is irrelevant nerd-toys.

quote:
It is, in fact, the strongest step made toward fascism ever seen.Simple.


Absolutely. I mean fuck those millions of Jews that were killed 70 or so years ago. What do they matter?

REALITY CHECK NERDS.


RE: Can somebody explain to me...
By jshadow121 on 8/27/2012 1:25:14 PM , Rating: 2
Quote:
"Basic geometric shapes? No, a rectangle is a basic geometric shape, round the corners off and it's no longer basic. Familiar yes. Basic no."

What about a Cafeteria Tray?
It's a Rectangle with rounded corners, and that has existed for over 70 years.
That should count as previous art.

http://www.uline.com/Product/Detail/S-18445BR/Brea...


RE: Can somebody explain to me...
By mcnabney on 8/28/2012 9:44:08 AM , Rating: 2
There are plenty of prior cell phones that were rectangular with rounded edges. The LG Chocolate comes to mind, but there were scads of others.


RE: Can somebody explain to me...
By Theoz on 8/27/2012 2:09:54 PM , Rating: 1
This post is hilarious (I'm not being sarcastic). Good show.


RE: Can somebody explain to me...
By Reclaimer77 on 8/27/2012 2:18:53 PM , Rating: 1
quote:
Basic geometric shapes? No, a rectangle is a basic geometric shape, round the corners off and it's no longer basic. Familiar yes. Basic no.


Okay fair enough, I'll go with that.

Except pretty much every phone before the iPhone had rounded corners. The Blackberry, the Palm Trio, the Nokia E62. Even those cheap flip phones that made up the majority of the market at the time, rounded corners. Rounded corners are just obvious, everyone does it, and always has. Big hint, phones usually go in pockets. Do you like sharp edges on things in your pocket?

There's no way Apple should have been granted a patent on something that's an industry standard and obvious as hell. And if they are, it should be VERY technical. As in the exact radius of the angle. Not just a broad generic "angle" patent.

Anyway I'm sure you'll just troll your way out of this, cause that's how you roll.


RE: Can somebody explain to me...
By BSMonitor on 8/27/2012 2:26:40 PM , Rating: 3
Of course, this was the one patent that the jury found Samsung did not violate.


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