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Print 31 comment(s) - last by testerguy.. on Mar 7 at 3:09 AM

Apple is facing a tough road in several court cases

Apple, Inc. (AAPL) rocked the mobile market when it scored a $1.05B USD jury verdict over arch-rival Samsung Electronics Comp., Ltd. (KSC:005930).  A jury in the U.S. District Court for the Northern District of California ruled last August that Samsung "willfully" infringed on Apple patents covering Apple's iPad and iPhone.  The jury agreed that Samsung "ripped off" the look and feel of Apple's iconic products.

Soon after Apple went for the jugular, looking to triple the damages due to the "willful" nature of the infringement.  But even as it reveled in its victory, the win began to unwind.  

The U.S. Patent and Trademark Office (USPTO) has filed preliminary invalidation rulings regarding two of the key Apple utility patents involved in the case.  And then presiding Judge Lucy Koh overrode the jury and vacated the "willful" finding, deciding that the jury was wrong and that Samsung only violated Apple's patents because it believed them to be invalid (a finding which the patent office at least partially agrees with).

I. More Bad News for Apple in Samsung Case

Last week in District Court, Judge Koh dealt Apple another setback, vacating [PDF] more than 40 percent of the jury damages.  She justified the decision to slash $450,514,650 USD from the verdict by pointing to two errors made by Apple, which the jury did not realize.

First, Apple encouraged the jury to calculate damages based on Samsung's profits.  In reality that approach was only valid for the design patents.  As many of the violations were for utility patents, Judge Koh found those damages invalid due to error.  

Apple vs Samsung
Samsung scored a key win in court last week. [Image Source: PhoneBuff]

Apple also goofed on the period it claimed damages on -- while Apple did notify Samsung of alleged violation of the "rubber band patent" (U.S. Patent No. 7,469,381, aka the '381 patent) (since ruled invalid) on August 4th, 2010, it did not notify Samsung of the other infringements until April 15, 2011, hence the period of infringement was shorter than Apple claimed.

Due to the errors, Judge Koh decided to simply eliminate the damages for many of the phones targeted, while declining Samsung's request to review the overall correctness of the jury verdict.  Judge Koh argued it was too hard to determine why the jury ruled as they did; hence it would be inappropriate to modify their decision other than to correct the blatant errors.  

She comments, "It is not the proper role of the court to second-guess the jury's factual determination as to the proper amount of compensation."

Judge Koh
Judge Koh slashed Apple's gains by $400M USD, but declined to analyze the jury's overall verdict, leaving that to the appeals courts. [Image Source: IB Times]

The products for whom damages were partly vacated include:
  • Captivate
  • Continuum
  • Droid Charge
  • Epic 4G
  • Exhibit 4G
  • Indulge
  • Infuse 4G
  • Galaxy Prevail
  • Gem
  • Galaxy SII for AT&T
  • Galaxy Tab
  • Nexus S 4G
  • Replenish
  • Transform
The products for whom damages remain include:
  • Fascinate
  • Galaxy Ace
  • Galaxy S i9000
  • Galaxy S II i9100
  • Galaxy Tab 10.1 Wi-Fi
  • Galaxy Tab 10.1 with 4G LTE
  • Galaxy S 4G
  • Galaxy S II Showcase
  • Intercept
  • Galaxy S II Skyrockeet
  • Galaxy S II Epic 4G Touch
  • Galaxy S II T-Mobile
  • Mesmerize
  • Vibrant
Samsung is now only on the hook for around $600M USD, a rather trivial amount given its record profitability.  Samsung also appears in a strong position to appeal the verdict and possibly get the entire damages tossed in the appeals circuit, assuming the USPTO finishes off Apple's patents used in the case (which are currently past the early stages of invalidation).

Apple, on the other hand, will likely try to appeal the vacation.  It faces an uphill battle in this case, though.  It will likely try to focus on its upcoming second jury trial against Samsung, which will deal with newer products and a slightly different set of patents.

II. In-App Purchases 

Apple is on the verge of settling a second, separate case, which pertains to in-app purchases in its iOS mobile operating system.

In-app purchases were first added in summer 2010, with the release of iOS 4.0.  In April 2011 angry parents sued Apple for allegedly making it too easy for children to access their parent's iDevices and make unauthorized purchases.

In response to the suit, Apple is looking to create a $23M USD settlement fund.  The settlements will only apply to certain apps, and plaintiffs will have to fill out some paperwork.

Judge Edward Davila for the Northern California district court (where the case is being tried) expressed concern for the difficulty in obtaining a settlement, commenting, "It seems like you're asking the plaintiffs to do a lot.  Apple has this information.  They're in the best position to retrieve this information."

iPhone 4
Parents sued Apple for making it too easy for children to make unauthorized in-app purchases.
[Image Source: Engadget]

Apple's lawyers countered, arguing that they were putting up a web app to make the settlement process less painful.  Each unauthorized purchase will make the user eligible for a $5 USD refund as an iTunes gift card.

The company has modified iOS (via the iOS 4.3 update) in response to the suit.  Originally, when you entered your password for in-app/App Store purchases, there would be large window in which you could freely make purchases without re-prompting for your password.  That allowed some children to make large in-app purchases, even if they did not know their parent's credit card or iTunes password.  Apple has since made the window for password timeout much shorter.

Nonetheless, there have been some unfortunate recent incidents, such as a 5-year-old from southwest England who spent $2,500 USD on his parents' credit card in unauthorized in-app purchases.  The child did not have the password to the iPad.  Apple has reportedly refunded the parent in the case.

Sources: SBNation [The Verge] [PDF], CNET



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Making It Too Easy?
By Sazabi19 on 3/4/2013 4:08:17 PM , Rating: 2
So, these idiots put their financial information on their phone and save it, let their kid use it unsupervised, and then bitch because it's too easy for their kid to use it? How about some responsibility for the parents? I don't much care for Apple, products or how they operate, but this is absolutely not their fault. Provided they made this some hard to do, obtuse procedure to procure apps, then people would bitch about it being too hard. How about not giving a device you could actually purchase things on to someone who is not responsible? You don't give your kid your credit card info online or in a store do you? This is just 1 of the many things that is wrong with people today.




RE: Making It Too Easy?
By BillyBatson on 3/5/2013 12:58:20 AM , Rating: 2
You are one of those wrong people. What you are saying is ridiculous it is not necessarily the parents fault and who says it is the kids? What it be didn't realize he's charging real money or how the system works he just knew you pressed a button and received items. Kids don't understand even tangible money let alone digital credit. What if on your cable TV your kid goes in and orders a bunch on-demand cartoons without knowing the password while you are cooking in the kitchen is that your fault? Also cellphone service providers have a dollar amount limit on a monthly bill I know sprint and AT&T both do who either call you or stop your service until you verify it's you so why doesn't apple have a monthly cap? How can anyone rack up $2500 and not be notified?
Not the parents fault.


RE: Making It Too Easy?
By testerguy on 3/5/2013 1:58:30 AM , Rating: 1
Unlike what this uninformed article claims, the child in question did, in fact, have the password - which is what caused the problem.

As for the rest of the article - the damages haven't been removed permanently, they just have to be recalculated and can go up or down. Also, don't see how 600m is an insignificant amount but 1000m is? As for invalidation proceedings the patents in question have not at all been invalidated yet.

The article is at least correct that the original decision hasn't been changed - Samsung still copied Apple. The fact that the jury miscalculated damages has no relevance to any appeal on the decision itself.


RE: Making It Too Easy?
By blue_urban_sky on 3/5/2013 3:39:27 AM , Rating: 2
If the kid you mean is the one from England then he did not have the password, but there is a 15 minute window where you do not have to retype the password in again. At least according to the BBC.

The whole 600M thing I read as to be referencing the record profits Samsung has made. It is also 400M less which is close to half.

And you last point is just sad.


RE: Making It Too Easy?
By testerguy on 3/5/2013 4:27:38 AM , Rating: 1
The kid in question got the password from the Dad. In fact, the dad entered the password for him.

The profits Samsung made are irrelevant, if 1000m is significant, then 600m is too. 3/5 is not 'close to half'. If 600m is insignificant because of 'record profits' - then 1000m is too. We'd have to be talking orders of magnitude for it to be relevant. And as I already said - the damages which have been removed have to be recalculated, they could potentially be put back on, give or take.

And 'you last point' is sad, huh? Is that meant to be any point whatsoever?


RE: Making It Too Easy?
By ritualm on 3/5/2013 9:10:33 AM , Rating: 1
$600-million really is a drop in the bucket for Samsung. It has as much significance as the rest of your posts - as in, it's irrelevant.

Keep drinking the Apple Fail-Aid, Mini-Swash.


RE: Making It Too Easy?
By NellyFromMA on 3/5/2013 2:07:32 PM , Rating: 2
Is he even advocating for Apple right now? I too found that saying 600m is irrelevant in any context when 1 billion comes across as truly out of touch along the lines of not knowing what a gallon of milk costs. This is an editorial issue.

Why are people so venemous over the stupidest things here. It's quite weird.


RE: Making It Too Easy?
By ritualm on 3/5/2013 2:29:41 PM , Rating: 1
quote:
Is he even advocating for Apple right now?

He is. You're not reading between the lines.

To be honest, $600-million can't buy a whole chip foundry, and Samsung has several. That amount of money is small fry for the South Korea-based chaebol.


RE: Making It Too Easy?
By Cheesew1z69 on 3/5/2013 2:31:28 PM , Rating: 2
Of course he is, why else would he post here?


RE: Making It Too Easy?
By testerguy on 3/6/2013 5:11:57 AM , Rating: 1
quote:
$600-million really is a drop in the bucket for Samsung. It has as much significance as the rest of your posts - as in, it's irrelevant. Keep drinking the Apple Fail-Aid, Mini-Swash.


Such anger, and all because you failed to comprehend the point I was making.

The point, to reiterate, and it's a simple one, is that either $600m is insignificant, in which case $1000m is too, or that they are both significant. It cannot be the case that dropping (temporarily) from $1000m to $600m takes it from the realm of significant to insignificant, because those numbers are on the same scale.

You guys are really full of hate.


RE: Making It Too Easy?
By Cheesew1z69 on 3/6/2013 8:16:20 AM , Rating: 2
And you are full of...something.


RE: Making It Too Easy?
By Cheesew1z69 on 3/5/2013 8:13:45 AM , Rating: 2
quote:
And you last point is just sad.
As is all of his posts...


RE: Making It Too Easy?
By NellyFromMA on 3/5/2013 2:04:06 PM , Rating: 2
Why was testerguy even downrated. He just made a ton of good points and it seems like the 'community' is allergic to facts that don't agree with their opinions. At least refute his point, don't hide it like the beans you didn't wanna eat in mommy's supper, wth?


RE: Making It Too Easy?
By ritualm on 3/5/2013 2:34:50 PM , Rating: 2
NellyFromMA, what part of
quote:
Samsung still copied Apple

is irrefutable?

Also, the chances of testerguy not defending Apple are next to nil.


RE: Making It Too Easy?
By testerguy on 3/6/2013 5:09:16 AM , Rating: 2
Full quote:

quote:
the original decision hasn't been changed - Samsung still copied Apple


You don't get to decide if Samsung copied, and nor do I. But the jury does, and they haven't changed that decision.

That, my friend, is indeed an irrefutable fact .


RE: Making It Too Easy?
By ritualm on 3/6/2013 11:29:31 AM , Rating: 2
Full quote:
quote:
the original decision hasn't been changed - Samsung still copied Apple

Wrong.

The original decision smacked full of favoritism towards hometown loverboy (Apple), heavily biased against Samsung in full stars and stripes, with no due diligence exercised by Judge Koh. What part of that is irrefutable?

Samsung did not copy Apple, yet you continue to parrot a lopsided, wrongheaded verdict as proof.

Look at Rodney King. He's on the run when cops used excessive, unreasonable force against him. The first verdict was biased in favor of the cops, and look what happened 72 hours after that.

Your irrefutable fact is full of fail, judgmental prick.


RE: Making It Too Easy?
By testerguy on 3/7/2013 3:09:01 AM , Rating: 2
Firstly, your anger makes more of a mockery of you than anything I need to say. You're like a crying child, throwing those dolls out of that pram.

quote:
The original decision smacked full of favoritism towards hometown loverboy (Apple), heavily biased against Samsung in full stars and stripes, with no due diligence exercised by Judge Koh. What part of that is irrefutable?


Precisely none of what you just wrote is irrefutable. What IS irrefutable, is that the decision made by the legal system remains that Samsung copied Apple. That's not up for debate, that's simply factually the case.

quote:
Look at Rodney King. He's on the run when cops used excessive, unreasonable force against him. The first verdict was biased in favor of the cops, and look what happened 72 hours after that.


Why on earth are you going on about Rodney King. Talk about desperate measures when the best you can do is talk about a criminal on the run when we're talking about commercial patent cases.....


RE: Making It Too Easy?
By blue_urban_sky on 3/5/2013 3:46:59 AM , Rating: 2
I think some of the App Devs are more to blame. I think the in app purchases of the last kid in the article were to the tune of £50 each and it was an game aimed at kids.

So the app is free, kid goes to responsible parent and whines that they need password for free kids app.

Parent takes phone and enters secret password to get game.

Kid them within 15 minutes racks up £2500 on a kids game.

Now not even on sat nav apps can you rack up that kind of bill, it was designed to do be a scam.


RE: Making It Too Easy?
By NellyFromMA on 3/5/2013 2:02:10 PM , Rating: 2
LOL, Apple's setback involve only getting 600 million instead of a billion? WTF that sounds like a win to me still who's even proof-reading this stuff? I feel like this is written from the perspective of an oil baron.


RE: Making It Too Easy?
By Cheesew1z69 on 3/5/2013 2:45:21 PM , Rating: 3
IF they get anything at all...


RE: Making It Too Easy?
By retrospooty on 3/5/2013 6:58:58 PM , Rating: 3
I bet my left nut they pay nothing at all. 1B or 600m, either way it still has to go to a higher level court for an appeal. The appeal will see the full evidence including prior art 1 year before iPhones release that showed the designs that Koh deemed inadmissible, and no local jury and no head juror with a patent dispute of his own.


"This is about the Internet.  Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis














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