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Despite willful infringement findings, Judge argues Apple did not prove that it lost its ability to participate

A California federal judge has ordered that while Samsung Electronics Comp., Ltd. (KSC:005930) is guilty of willful infringement of software and design patents held by Apple, Inc. (AAPL), that she would not order a sweeping ban of Samsung smartphones, which Apple had argued for.

I. A Lump of Coal -- Apple Gets no Ban in its Stocking

Apple and Samsung are currently the two most profitable and most prolific smartphone makers in terms of U.S. sales.  Samsung's recent success was kick-started by the Galaxy S, a phone that some felt borrowed a little too much from the iPhone.  

Since then, the tables have turned and it has been Samsung (and its operating system partner Google Inc. (GOOG)) that has been pushing the user interface and form factor envelope.  For example, Samsung's flagship Galaxy Note II and Galaxy S3 feature 5.5-inch and 4.8-inch displays, respectively, prompting Apple to begrudging bump its screen size to 4-inches with the iPhone 5.

Judge Lucy Koh
Federal Judge Lucy Koh

Overall, there are signs that Apple's so-called "patent war" against Google's alliance of Android manufacturers is cooling.  Apple recently agreed to a 10-year licensing agreement with HTC Corp. (TPE:2498).  And it appears to have exhausted its U.S. legal avenues against Motorola Mobility after its case against the Google subsidiary was dismissed with prejudice not once, not twicebut three times.

But the fight between Apple and Samsung remains ongoing and bitter.

In her ruling on Monday, U.S. District Court for the Northern District of California Judge Lucy Koh wrote that the $1.05B USD jury verdict against Samsung was a legitimate reflection that Samsung's violation of six Apple design and utility patents may have caused Apple to lose some customers.

Galaxy S3 v. iPhone 4S
Apple's request to ban Samsung smartphones was denied on Monday.
[Image Source: Android Authority]

However, when it comes to banning products, she comments, "There is no suggestion that Samsung will wipe out Apple's customer base or force Apple out of the business of making smartphones. The present case involves lost sales -- not a lost ability to be a viable market participant."

"In sum, to the limited extent that Apple has been able to show that any of its harms were caused by Samsung’s illegal conduct (in this case, only trade dress dilution)," she concludes, "Apple has not established that the equities support an injunction. Accordingly, Apple’s motion for a permanent injunction is DENIED."
Apple Denied Motion for Permanent Injunction

II. Ban Could Still be Resurrected

The ruling was in some ways unsurprising as Judge Koh had previously denied a similar request for a U.S. sales ban on the Galaxy Tab.

Both denials are likely to be appealed to higher U.S. courts, as stated by Florian Mueller, a paid "consultant"/commentator for anti-Android software firm Oracle Corp. (ORCL).

That means Samsung isn't out of the woods just yet.  It's very possible that the likely appeals court -- Court of Appeals for the Federal Circuit -- might order Judge Koh to reconsider a ban.  Such an order could force the federal judge's hand.

In fact, that is precisely what happened after Judge Koh denied a request for a preliminary injunction earlier in the case.  The Circuit Court ordered [PDF] Judge Koh to reconsider, and she did, issuing the temporary ban.  The Circuit Court made its decision, in part, because sales bans are often used in patent infringement cases in the U.S. to provide so-called "injunctive-relief" to the plaintiff.

Federal Circuit Appeals Court
Apple will likely appeal to the Court of Appeals for the Federal Circuit.

However, there are no guarantees for Apple either.  While sales bans are common, the scope and magnitude of the ban Apple is pushing for are rather unprecedented and would represent a U.S. court removing a major participant from the U.S.'s supposedly "free market".

Thus it should be interesting to see what the higher court says when the inevitable appeal does come.

III. Samsung's Request for Retrial Also Smacked Down

Speaking of appeals, Apple did win one small victory in the ruling.  Judge Koh denied Samsung's request for a retrial.

Samsung had requested the verdict be tossed and a new trial scheduled after it was revealed that Jury Foreman Velvin Hogan did not reveal, despite direct questioning, that a company tied to Samsung had sued him, and thus might be biased against the device-maker.  Mr. Hogan in the 1990s been sued by hard-drive manufacturer Seagate, which today controls Samsung's old hard drive business, after he failed to repay a promissory note after being terminated (reportedly, for misconduct).

The idea was that the Jury Foreman's history could have introduced a bias against Samsung that permeated to other jurors.

It was also known that several jurors had family members who were Apple shareholders, but Judge Koh had previously ruled that was acceptable, in that they would only indirectly profit from Samsung being found guilty, not directly profit.  Samsung did not mention that potential conflict of interest in its failed appeal.

Much like the product ban request, Samsung may opt to take its request for a retrial to the Circuit Court.
Galaxy Note II
The Galaxy Note II will be targeted in the second upcoming patent trial in
Apple and Samsung's legal war.

Both companies are currently gearing up for a second major lawsuit in the Northern California Federal Court.  That case will tackle patent infringement claims by both companies against their latest respective flagship products, including the Apple iPhone 5 and the Samsung Galaxy Note II and S3.

A trial is slotted for early next year.

Source: Scribd via AppleInsider

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RE: Still smells fishy to me
By tng on 12/18/2012 5:17:22 PM , Rating: 2
As an engineer who has worked directly with a large multinational Korean company id say willful copying is part of their culture.
Same here. Most of my dealings have been with Samsung Semiconductor/LCD and I have seen many instances of direct copying of product designs and even manufacturing equipment.

We learned that whenever Samsung bought some piece of equipment from you that they would ask for the "blueprints" in the old days (now the CAD files). If you gave them the files they would just make more copies of whatever you sold them and those repeat sales would just vanish.

Samsung has a very sound business strategy, copy a product, flood the market with cheaper, well built knock-offs and by the time you get sued, you have major market share. Original LCDs from Samsung were knockoffs from Sharp who was at that time the market leader and their PDPs were knockoffs from Pioneer. Both Pioneer and Sharp sued and won, but Samsung had gained a foothold on the market by that point.

I am not saying that Apple or Samsung is in the wrong here, just that, yes there is a culture war going on here more than anything else.

RE: Still smells fishy to me
By TakinYourPoints on 12/18/2012 9:12:36 PM , Rating: 2
A very interesting story on Samsung's long history of corruption here:

RE: Still smells fishy to me
By Dorkyman on 12/19/2012 1:52:33 PM , Rating: 2
I was an HDTV consultant to Samsung for one year back in the late 80's.

Yeah, they copy. The Chinese copy. The Russians copy. Apple copied from PARC. Microsoft copied from Apple.

The joke going around the HDTV industry back then was that the Americans are deathly afraid of the Japanese, while the Japanese worry about the Koreans, who worry about China. Hey, it's called "competition," and it's a Good Thing. I think it's kinda funny that Microsoft expects a Chinese PC user to pay a month's wages to buy an OS for their PC. Right, like that's gonna happen.

I can understand the idea of trying to reward innovative thinking via patent/copyright, but the current situation is just nuts.

Again, my hope and assumption is that the Samsung conviction is eventually overturned.

RE: Still smells fishy to me
By someguy123 on 12/19/2012 3:03:29 AM , Rating: 2
I think people are a bit too biased in favor of samsung based on somewhat selfish reasoning. People see their products and think "I can get all that? At that price? They're just competing naturally!", when really their business model utterly relies on outside advances and innovation. They're quite literally a caricature of a behemoth company strong arming their way to the top while cutting corners beneath the gloss.

I don't support frivolous patents, but I also don't support samsung's business model. If they continue at this pace there will be no one left to copy because they will consume every market.

RE: Still smells fishy to me
By EasyC on 12/19/2012 7:53:24 AM , Rating: 2
You just described Apples culture with a couple of exceptions. You don't get ALL that, for that price. And they claim that they invented the ideas they stole.

So if Samsung is a copycat, and Apple is a copycat which claims invention and tries to force feed the market with it's own monopoly, which are you going to support?

RE: Still smells fishy to me
By tng on 12/19/2012 8:35:31 AM , Rating: 2
Not trying to defend Apple here, but the original iPhone was an innovative product taking technology that was already out there and putting them together in a novel way. But the real genius of Apple was the way they marketed the original iPhone (IMO).

If you look at the Samsung Galaxy (first Gen) you will notice that it does look almost exactly like the original iPhone. That is what I would expect from Samsung. They made their inroads on the market with that phone and after that started with their own designs.

I can see Apple's point in going after Samsung, but HTC? Moto? Also some of the patents they claim seem to be just frivolous fluff.

RE: Still smells fishy to me
By someguy123 on 12/19/2012 11:24:15 PM , Rating: 2

Outside of the insane lawsuits, though, I'd say apple was at least a trendsetter. At the time most people were going for BB's market, yet nowadays every damn phone is a solid brick touchscreen. Personally I hate it, but it happened, and now I can't even justify a regular cellphone because most providers don't offer upgrades/subsidies on them. At least some people still offer slide out keyboards.

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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