Apple is seeking a ban on eight Samsung phones in the US, after winning a landmark $1bn copyright lawsuit.
The move could have an impact on owners of Samsung phones, as the company could be forced to make major software and hardware changes, and help Apple’s battle for dominance against Google’s Android operating system, which accounts for two-thirds of the global market.
Samsung, which sold around 50 million phones between April and June – almost twice the number of iPhones – will have to pay damages equivalent to just 1.5% of the annual revenue from its telecoms business.
The US jury ruled that some of Samsung’s products illegally copied features and designs from Apple’s iPhone and iPad.
The nine-person jury had to consider 700 questions about each side’s claim that its rival had infringed its intellectual property.
It deliberated for less than three days before coming to a unanimous decision, rejecting all of Samsung’s claims and upholding five of Apple’s allegations, including:
• Some of Samsung’s handsets, including its Galaxy S 4G model, infringed Apple’s design patents for the look of its iPhone including the system it uses to display text and icons
• All the disputed Samsung devices had copied Apple’s “bounce-back response”, which makes lists jump back as if yanked by a rubber band
• Several Samsung devices incorporated Apple’s facility allowing users to zoom into text with a tap of a finger
Apple had wanted $2.5bn in damages. Samsung had sought $519m.
The ruling is one of the most significant in a global battle over intellectual property.
In recent weeks, a court in South Korea ruled that both technology firms had copied each other, while a British court threw out claims by the US company that Samsung had infringed its copyright.
Apple lawyer Harold McElhinny told the court: “Samsung was the iPhone’s biggest fan. They tried to compete with it, and when they couldn’t, they copied it.” Samsung is expected to appeal.
Apple hailed the ruling, saying: “The mountain of evidence presented during the trial showed that Samsung’s copying went far deeper than even we knew. We make these products to delight our customers, not for our competitors flagrantly to copy.”
Samsung said: “It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners,” branding the verdict “a loss for the consumer [that] will lead to fewer choices, less innovation, and potentially higher prices”.
Ban on 8 phones in US
Following the court victory Apple is now seeking to ban eight older-model Samsung smartphones in the US, including the Galaxy S2 and Droid Charge.
While Apple’s lawsuit encompassed 28 devices, many of those accused products are no longer widely available in the US.
Although Samsung’s flagship Galaxy S III phone was not included in the trial, the jury validated Apple’s patents on features and design elements that the iPhone manufacturer could then try to wield against that device.
Apple may not have to seek a new trial over the S III, but can include it in a “contempt proceeding” that moves much faster, according to legal experts.
Samsung to appeal
Apple was awarded $US1.05 billion in damages after a US jury found Samsung had copied critical features of the iPhone and iPad. The verdict could lead to an outright ban on sales of key Samsung products.Samsung said it would appeal the decision.
An injunction hearing has been set for September 20. If US District Judge Lucy Koh grants sales bans, Samsung will likely seek to put them on hold pending the outcome of its appeal.
Apple’s win on Friday strengthens its position ahead of the iPhone 5’s expected September 12 launch and could
Apple and Samsung- Friends and Foes
While the case has no doubt frayed the relationship between the two firms, Samsung remains the sole supplier of Apple-designed chips that power the iPhone and iPad.
While it plans to appeal the US verdict, and a damages bill for $1.05 billion for copying critical features of Apple’s popular mobile devices – a sum that could be trebled – Samsung will not want to put at risk its Apple supply contract which is worth billions of dollars.
As well as being the only supplier of micro-processors for the iPhone and iPad, Samsung also supplies DRAM and NAND-type memory chips and flat screens used in the popular Apple gadgets. Samsung products comprise 26 per cent of the component cost of the iPhone, Samsung’s lead counsel Charles Verhoeven was quoted as saying in the media.
Samsung’s component sales could hit $13 billion next year and bring in $2.2 billion in operating profit, according to a recent estimate by Morgan Stanley. That’s nearly 8 percent of estimated group operating profit for next year.
Shares- winners and losers
Apple’s shares gained 1.9% to close at $675.68, tacking on another $12 billion-plus to its already historically leading market value.
Samsung lost about the same amount in market capitalisation after its shares slid 7.5% in Seoul.
Google shares closed 1.4% lower at $669.22.
Microsoft, a potential beneficiary if smartphone makers begin to seek out Android alternatives, ended up 0.4%.
Nokia, which has staked its future on Windows phones, gained 7.7%.
Even Research in Motion – maker of the Blackberry, which has haemorrhaged market share to Apple and Google – climbed more than 5% in early trade before finishing 2% higher at $7.01 Canadian.
The verdict came as competition in the device industry is intensifying, with Google jumping into hardware for the first time with the Nexus 7 and Microsoft’s touchscreen-friendly Windows 8 coming in October, led by its “Surface” tablet.
Watch a video from the BBC explaining the patent dispute:
