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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



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

Cry me a river
By Tony Swash on 8/27/2012 2:14:26 PM , Rating: -1
Boo hoo we can't copy Apple - all is lost!

Is that all Android and Google fans can do - whine?

I guess you take your lead from Google the biggest cry babies in technology.

http://www.brianshall.com/content/google-are-pussi...

Grow a pair.

Here is a novel idea. Innovate. create something new and great. Are you pathetic numb nuts trying to argue that there is nothing left to invent? No new ideas left to come up with? No new products waiting to be conceived and designed?

Is all that's left is to weep about the unfairness of it all.

Has the mediocrity sapped your critical faculties and destroyed your ambitions.

"We can't copy Apple - all is lost" What a pathetic bunch of losers.

As Brian hall says: Stop copying Apple and make something insanely great!  

The ball is in your court.




RE: Cry me a river
By theapparition on 8/27/2012 3:01:02 PM , Rating: 2
So honestly, and I mean honestly, answer this.

Do you think Apple should have been granted a patent for pinch to zoom on a capacitive screen, even though multi-touch existed on other devices (prior art)?

Do you think that is innovation?

I don't think Android is doomed because of this. In fact, I see this a a huge loss for Apple in the long run. Now others manufacturers will rush to patent overly broad and obvious designs and use them against Apple. Google is already starting, which you already whined about. Apple being too heavy handed can soon find themselves on the outside looking in.

It's really sad that the company you evangelize only want to compete by making local governments try to ban their products.


RE: Cry me a river
By Jeffk464 on 8/27/2012 4:28:42 PM , Rating: 2
Blatant copy of minority report, Tom Cruise should be suing apple. :)


RE: Cry me a river
By bupkus on 8/27/2012 3:19:19 PM , Rating: 3
quote:
"Grow a pair"?

quote:
Are you pathetic numb nuts

quote:
The ball is in your court.

The topic for today is balls.

Oh, Tony, you're such a manly man. Stop taunting the wild animals with your poking stick.

Assignment for the day-- create a sentence using both the words "stagnation" and "entrenched".

Fortune cookie says: Your walled garden will begin to crumble in the coming months.


RE: Cry me a river
By Tony Swash on 8/28/12, Rating: -1
RE: Cry me a river
By momorere on 8/27/2012 10:33:48 PM , Rating: 1
Please take time and educate yourself alittle with all these conflicting interviews by your fellow iSheep. After reading that you can't possibly believe the verdict was true and thought out although in your Apple alternate reality, I'm sure you won't see the point.

http://www.groklaw.net/article.php?story=201208251...


RE: Cry me a river
By Cheesew1z69 on 8/28/2012 9:08:56 AM , Rating: 2
He will never see the point, it's futile to even attempt.


RE: Cry me a river
By atlmann10 on 8/29/2012 10:02:41 PM , Rating: 2
The funny part of this is do you know who pays the 1 Billion dollar fine if of course any of it is ever paid? That would be Apple customers in raised prices on the processors, memory, lenses, and screens on there APPLE devices that are made by SAMSUNG!


RE: Cry me a river
By Motoman on 8/28/2012 10:03:04 AM , Rating: 3
That article is awesome, and shows definitively just how wildly biased that jury was.

The jurors will be exceedingly lucky if they don't wind up in jail themselves.

Things will be even worse for Apple in the end because of this. Would have been better for them just to have lost this one cleanly and be done with it.


RE: Cry me a river
By atlmann10 on 8/29/2012 10:06:27 PM , Rating: 2
Oh and the only real victor will most likely be Microsoft in any market where there are less Android phones as they have new hardware popping out with a new integrated for mobile OS in the next month. Apple does as well but there customers will just be paying SAMSUNGS fine and APPLE will of course have lower earnings VS because there units are more expensive.


RE: Cry me a river
By Motoman on 8/30/2012 10:39:45 AM , Rating: 2
If that happens then Samsung, and probably all Android vendors, will have just cause to sue Apple even more, for it's anti-competitive market manipulations using specious patents.


"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad














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