Clash of the titans, day one: Apple and Samsung patent dispute lands in U.S. court

Samsung versus Apple

After more than two years of conflict and a myriad of lawsuits, hearings, and injunction proceedings spanning several continents, Apple’s legal battle against Samsung — and, implicitly, against nearly the entire Android ecosystem — gets underway today in a U.S. federal courtroom in San Jose before Judge Lucy H. Koh. The process starts with the selection of a 10-person jury, to be followed by a complicated presentation of evidence that’s expected to take a month or more.

Apple is seeking some $2.5 billion in damages from alleged infringement of its patents and designs. If Apple wins, that award would be the largest patent infringement damages award in U.S. history — and the judge could triple that figure if she finds Samsung engaged in willful misconduct.

Damages aside, the case could be a turning point for the industry. If Apple prevails, it bolsters claims by late Apple CEO Steve Jobs that Android is a “stolen product” and puts the company in a commanding position to extract settlements from other players in the Android industry. Even Google may find itself targeted. If Samsung prevails, it’ll mark another instance where Apple disrupts an industry with an innovative product, only to find other companies borrowing many significant elements — and not paying Apple a dime.

How we got here

Apple and Samsung are already suing each other in courtrooms around the world. The specifics of each case vary with the patents the companies have on file in each jurisdiction as well as with local law. However, the guts of the cases are similar: Apple accuses Samsung of more-or-less copying its iPhone and iPad products outright; Samsung says that while Apple may have refined the work of others, there’s nothing unique about Apple’s designs. Further, Samsung insists Apple is actually infringing on its technology patents.

As this U.S. case goes to trial, Apple is asserting Samsung violates seven patents related to user interface and trade dress. Samsung asserts Apple is violating five patents, two of which are standards-essential 3G patents.

Apple’s position

Apple’s claims take two forms. One set involves violating specific Apple patents on user interface and technology elements. An example would be the “rubberbanding” feature that bounces content on an iPhone or iPad to show a user they’ve reached the end (or beginning) of content. Apple’s other set of claims center on design elements, or what’s often called “trade dress” — the way a product looks and is even packaged.

On the interface front, Apple asserts Samsung infringes on patents covering the overscroll “bounce” above, as well as a scrolling API that controls the behaviors of frames in a screen. Apple also asserts Samsung is violating an Apple patent covering covering the use of taps to zoom and navigate content that Apple introduced with the first iPhone. It’s worth noting that Samsung has already shifted away from some of these alleged infringements. For instance, when you overscroll on a current Samsung device, you just get a blue highlight. No bounce.

Apple - Samsung phones before and after iPhone

Apple bases some of its damages estimates on violation of these user interface elements, but the bulk of Apple’s claims against Samsung actually rests on those aesthetic design and “trade dress” issues. Apple says Samsung “slavishly” copied many of the visual and design elements of the iPhone and iPad design, ranging from specific onscreen icons and packaging to the unadorned gloss black frame of the iPad, right down to the one-button design. Apple claims Samsung’s designs created consumer confusion that damaged Apple — that is, some people may have bought a Samsung product thinking they were actually buying an Apple product.

“Samsung cannot change the central fact that its products are strikingly similar to Apple’s patented designs,” wrote Apple attorney Michael Jacobs in a trial brief submitted last week. “Nor can it change the novelty and extraordinary success of Apple’s designs.”

Android device before and after iPhone

It’s not an exaggeration to say that Apple changed the face of the smartphone industry when it unveiled the iPhone in 2007 — and some of Apple’s submissions to the court highlight that disruption. (Consider what Google’s Android devices looked like before and after Apple’s 2007 iPhone announcement.) Smartphones before the iPhone tended to be rather blocky, feature QWERTY keypads, and rarely offered a real Internet experience. If they had Web browsers, they were limited to a small number of stripped-down “mobile” Web sites. The iPhone, conversely, had just one button and a sleek glass panel where users manipulated content and apps directly via touchscreen. After the iPhone, the touchscreen-dominated smartphone essentially became the industry’s standard design, and that’s still true today. The iPad had a similar impact — so much so that it’s still nearly meaningless to discuss the tablet market separately from the iPad market.

Samsung’s position

Sasmsung bar/touchscreen designs before and after iPhone

Samsung, of course, refutes Apple’s claims, noting that it has been in the phone business since 1991 and even working on touchscreen-centric bar phones before the iPhone introduction. According to Samsung, Apple is trying to assert overly-broad design patents in an effort to stifle competition by locking consumers into “Apple’s single, expensive and closed-system devices.” Samsung has also recently claimed Apple’s cherished trade dress elements weren’t even Apple’s: Instead, Samsung says Apple was working off designs originally pioneered by Sony for its Walkman line in 2006.

Samsung alleges Sony design predated iPhone

Samsung also claims that it’s absurd for Apple to claim damages on interface elements because “no one buys phones because they have a ‘bounce back’ feature or other manifestations of Apple’s alleged inventions.”

But Samsung is also striking back, asserting Apple violates some of Samsung’s communications patents, including one covering making an integrated device with a phone, camera, and email. Other patents on the table cover running an app while listening to music in the background, bookmarking images, and two two patents essential to 3G mobile technology. Overall, Samsung wants a 2.4 percent royalty on every infringing Apple device sold — a figure that could translate to a sizable payday for Samsung.

The case so far…

So far, Samsung hasn’t been faring very well in the pre-trial action. Perhaps the most damaging elements to date have been Judge Koh’s decision to grant a preliminary injunction barring sale of the Galaxy Tab 10.1 in the United States and a temporary injunction on sales of the Samsung’s Google-branded Galaxy Nexus. The Galaxy Tab 10.1 injunction is too little too late since the Galaxy Tab 10.1 is at the end of its life cycle, but from a legal point of view the injunction is significant: Judge Koh was convinced that, even before the trail, the evidence that Samsung’s tablet infringed on Apple’s iPad was persuasive enough to pull the product from the market.

The Galaxy Nexus ban is more substantial. Although it was introduced last year, it’s still Google’s flagship Android phone. Judge Koh found that the device violates an Apple patent on a “universal interface” for search. (The patent is widely interpreted as applying to Apple’s Siri voice-activated interface, but the filing actually predates Apple’s acquisition of Siri.) Koh was convinced pre-trial that Apple was being harmed by Galaxy Nexus sales, finding that Apple was likely to “lose substantial market share in the smartphone market and to lose substantial downstream sales of future smartphone purchases and tag-along products.”

iPhone "purple" prototype design 2005

Judge Koh has also limited the types of material that Samsung can present at trial. For instance, Samsung has been barred from presenting quotes from Steve Jobs’ authorized biography, in which the late Apple CEO asserts “I’m going to destroy Android, because it’s a stolen product.” And Samsung’s assertions that Apple based the iPhone design on Walkman concepts? Judge Koh has ruled Samsung can’t present that information either, thanks to Apple revealing so-called “Purple” concepts from 2005 that predate Sony’s designs.

None of this is good news for Samsung, but it gets worse: The jury will hear that Samsung failed to live up to its discovery obligations and “failed to prevent the destruction of relevant evidence.” That assertion doesn’t quite rise to the level of willfully destroying evidence, but the court has found that evidence relevant to the trial was destroyed by Samsung after it should have been clear to the company that it should be preserved for litigation. The jury will be free to decide on its own whether it’s relevant, but may assume the destroyed evidence was favorable to Apple.

But it’s not as if there’s any lack of written material to present: at last count, discovery documents for the case totalled nearly 40 million pages — and Apple plans to cite internal Samsung documents with assertions its smartphone design “copied the iPhone too much,” along with an analysis done for Samsung that found its Galaxy S phone was “too iPhone-like” and strongly aped the iPhone user interface.

Possible outcomes

Apple Samsung Arm Wrestle

A weird aspect to the massive legal battle between Apple and Samsung is that the companies remain major partners in the component business. Apple sources a number of components for its desktop and mobile products (including RAM and flash storage) from Samsung to the tune of billions of dollars a year. Although the litigation between the companies has soured the relationship — and Apple has been diversifying its supply chain — the companies still do more business with each other every year than they’ve put on the table in these admittedly high-stakes trials.

So, what can happen?

Don’t expect either company to pull any punches at trial. The North American market is crucial to both firms, and if Apple is serious about going “thermonuclear” on Android, it must win this fight with Samsung. Although Samsung has won a few sanctions against Apple in other cases, Apple’s position going into in the U.S. jury trial is very strong. Even the most skilled trial lawyers will have difficulty downplaying an instruction that Samsung managed to destroy relevant evidence.

However, there’s no single slam-dunk patent at issue here. The bulk of Apple’s assertions rest on trade dress issues, which are notoriously difficult to litigate. Read broadly, Apple’s patents would seem to give it a lock on any computing device that’s rectangular and has rounded corners — an interpretation that few jurists would find enforceable. Apple will have to prove that Samsung’s designs were so similar to Apple’s that they caused significant confusion in the marketplace. Fortunately for Apple, right now the court seems to agree. Even if the jury finds differently, Judge Koh can toss out their findings if she feels they made a mistake.

If Samsung wins its patent assertions against Apple, the cost of iPhones and iPads will go up. Depending how the decision falls, it could also have a chilling effect on the mobile industry. Two of the patents Samsung is asserting against Apple are supposed to be licensable to anybody under Fair, Reasonable, and Non-Discriminatory (FRAND) terms. The thing is, Samsung (and Motorola) want to charge Apple more for those patents than they charge other device makers implementing the technologies. Apple has indicated it’s happy to pay standard licensing fees, but not be extorted. If Samsung is successful in asserting its standards-related patents against Apple, it will likely waste no time asserting them against other 3G device makers — driving up the costs of most mobile devices.

High-stakes patent disputes like this rarely make it all the way to trial. Most companies prefer controlled negotiations to taking their chances with notoriously unpredictable juries. Nonetheless, patent litigation is often a game of brinksmanship, and the lengthy processes of patent review and validation along with trials and appeals mean there’s almost always something else that can be done before one’s back is against a wall. Back in 2006, Canada’s Research in Motion waited until the eleventh hour in the appeals process before working out a settlement with NTP to keep its BlackBerry network operational. That was long after a jury had ruled in NTP’s favor. And sometimes going to trial proves to be the smart move: Google recently walked away from a mammoth dispute with Oracle with barely a scratch.

If we were to guess — and we are guessing — Apple will push Samsung all the way through the weeks-long U.S. courtroom trial in hopes of gaining maximum advantage in future settlement negotiations. If Apple wins any major points in its case against Samsung, it has almost no incentive to settle at all, and billions of dollars in the bank to continue litigating.

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