SAN JOSE, Calif. (AP) — Apple Inc.’s $1 billion legal victory could mean fewer smartphone options for consumers to choose from, analysts said.
A federal jury’s verdict Friday that Samsung Electronic Co. stole Apple’s technology to make and market smartphones using Google’s Android software sends a warning to other companies manufacturing similar devices, the biggest marketplace threat to Apple.
“Some of these device makers might end up saying, ‘We love Android, but we really don’t want to fight with Apple anymore,’” said Christopher Marlett, CEO of MDB Capital Group, an investment bank specializing in intellectual property. “I think it may ultimately come down to Google having to indemnify these guys, if it wants them to continue using Android.”
That’s if the verdict stands. Samsung, the Seoul-based global leader among smartphone makers, vowed to fight. Its lawyers told the judge it intended to ask her to toss out the verdict.
“This decision should not be allowed to stand because it would discourage innovation and limit the rights of consumers to make choices for themselves,” Samsung lead lawyer John Quinn said. He argued that the judge or an appeals court should overturn the verdict.
Apple lawyers plan to formally demand Samsung pull its most popular cellphones and computer tablets from the U.S. market. They also can ask the judge to triple the damages from $1.05 billion to $3 billion.
U.S. District Judge Lucy Koh will decide those issues, along with Samsung’s demand she overturn the jury’s verdict, in several weeks. Quinn said Samsung would appeal if the judge refuses to toss out the decision.
Apple Inc. filed its patent infringement lawsuit in April 2011 and engaged the country’s highest-paid patent lawyers to demand $2.5 billion from its top smartphone competitor. Samsung Electronics Co. fired back with its own lawsuit seeking $399 million.
The jury on Friday rejected all Samsung’s claims against Apple, but also decided against some of Apple’s claims involving the two dozen Samsung devices at issue.
It found that several Samsung products illegally used such Apple creations as the “bounce-back” feature when a user scrolls to an end image, and the ability to zoom text with a tap of a finger.
The U.S. case was the latest skirmish in a global legal battle between the two tech giants. Its outcome is likely to have ripple effects in the smartphone market. Other device makers relying on Android, the mobile operating system that Google Inc. has given for free to Samsung and other phone makers, may be more reluctant to use the software and risk getting dragged into court.
During closing arguments, Apple attorney Harold McElhinny claimed Samsung had a “crisis of design” after the 2007 launch of the iPhone, and executives were determined to cash in illegally on the success of the revolutionary device.
Samsung’s lawyers countered that it was legally giving consumers what they want: smartphones with big screens. They said Samsung didn’t violate Apple’s patents and alleged innovations claimed by Apple were created by other companies.
Samsung said after the verdict that it was “unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners.”
“This is by no means the final word in this case,” Quinn said in a statement. “Patent law should not be twisted so as to give one company a monopoly over the shape of smartphones.”
The jurors’ determination that Samsung took Apple’s ideas probably matters more to the companies than the monetary damages, Marlett said.
“I don’t know if $1 billion is hugely significant to Apple or Samsung,” Marlett said. “But there is a social cost here. As a company, you don’t want to be known as someone who steals from someone else. I am sure Samsung wants to be known as an innovator, especially since a lot of Asian companies have become known for copying the designs of innovators.”
Apple and Samsung combined account for more than half of global smartphone sales. Samsung has sold 22.7 million smartphones and tablets that Apple claimed uses its technology. McElhinny said those devices accounted for $8.16 billion in sales since June 2010.
Samsung’s Galaxy line of phones run on Android, and ISI Group analysts viewed the verdict as a blow to Android as much as Samsung.
If Android lose any ground in the mobile computing market, that would hurt Google, too. That’s because Google relies on Android to drive mobile traffic to its search engine and services to sell more advertising.
Google entered the smartphone market while its then-CEO Eric Schmidt was on Apple’s board, infuriating Apple co-founder Steve Jobs, who considered Android to be a blatant rip-off of the iPhone’s innovations.
After shoving Schmidt off Apple’s board, Jobs vowed that Apple would resort to “thermonuclear war” to destroy Android and its allies.
The Apple-Samsung trial came after each side filed a blizzard of legal motions and refused advisories by the judge to settle the dispute out of court. Legal experts and Wall Street analysts had viewed Samsung as the trial’s underdog. Apple’s headquarters is just 10 miles from the San Jose courthouse, and jurors were picked from the heart of Silicon Valley, where Jobs is a revered technological pioneer.
A verdict came after less than three days of deliberations, surprising observers who expected longer deliberations because of the case’s complexity.
While the issues were complex, patent expert Alexander I. Poltorak has said the case would likely boil down to whether jurors believed Samsung’s products look and feel like Apple’s iPhone and iPad.
Samsung’s lawyers argued that many of Apple’s claims of innovation were either obvious concepts or ideas stolen from Sony Corp. and others. Experts called that line of argument a high-risk strategy because of Apple’s reputation as an innovator.
Apple’s lawyers argued there is almost no difference between Samsung products and those of Apple, and presented internal Samsung documents they said showed it copied Apple designs. Samsung lawyers insisted that several other companies and inventors had developed much of the Apple technology at issue.
Apple and Samsung have filed similar lawsuits in South Korea, Germany, Japan, Italy, the Netherlands, Britain, France and Australia.
“This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple’s claims,” Samsung said in its statement.
Samsung won a home court ruling earlier Friday in the global patent battle against Apple. Judges in Seoul said Samsung didn’t copy the look and feel of the iPhone and ruled that Apple infringed on Samsung’s wireless technology.
But like the jury in California, South Korean judges said Samsung violated Apple’s technology behind the “bounce-back” feature. Both sides were ordered to pay limited damages.
The Seoul ruling was a rare victory for Samsung in its arguments that Apple has infringed on its wireless technology patents. Samsung’s claims previously were shot down by courts in Europe, where judges ruled that Samsung patents must be licensed under fair terms to competitors.
The U.S. case is one of some 50 lawsuits among myriad telecommunications companies jockeying for position in the burgeoning $219 billion market for computer tablets and smartphones.
Associated Press writers Michael Liedtke in San Francisco and Sam Kim in Seoul contributed to this report.
More Related Stories
- Illinois' fracking and coal rush is a national crisis
- Developers evict historic women's shelter to build luxury hotel
- Kaitlyn Hunt refuses plea offer, will go to court over high school relationship
- DHS admits "impossible" to control 3D-printed guns
- Journalists file suit against Manning trial secrecy
- Russia: Syrian regime ready to talk peace
- Report: Nearly a quarter of all Americans struggle to afford food
- Ted Cruz against the world
- Louie Gohmert: Women should be forced to carry nonviable pregnancies to term
- 2 men arrested for endangering commercial aircraft
- Oversized load blamed for bridge collapse
- This is what Guy Fieri looks like as a balloon
- Iran hackers aiming at U.S. energy firms
- Lawyers release data in attempt to discredit Trayvon Martin
- Anonymous rallies behind Kaitlyn Hunt
- Bridge collapse: Part of "aging infrastructure"
- Mistrial in penalty phase of Arias case
- Amanda Bynes arrested after hurling bong from window
- Interstate 5 bridge collapses north of Seattle
- Mississippi could begin prosecuting women for miscarriages
- Teenage girl claims she was beaten up for looking like Taylor Swift
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11