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Apple/Samsung Feud Will Stay Burning Long After Calif. Verdict

By Rachelle Dragani MacNewsWorld ECT News Network
Aug 27, 2012 10:13 AM PT

A federal jury found Samsung guilty of infringing on several Apple patents Friday in a high-profile patent case that could mean a US$1 billion payout for Cupertino.

Apple/Samsung Feud Will Stay Burning Long After Calif. Verdict

Jurors in the San Jose, Calif., court decided that Samsung copied certain design and utility patents, siding with Apple in the majority of the iPhone maker's complaints. As a penalty, Samsung must pay $1.05 billion in damages to Apple -- less than half of the more than $2.5 billion Apple sought.

However, that payout could be tripled since the jury found some instances in which Samsung willfully infringed Apple's patents.

The jury did not find Apple guilty of infringing on some of Samsung's patents.

Speedy Verdict

The nine-person jury came to its conclusion after 21 hours of deliberation. The decision arrived sooner than generally expected, given the complexity of the court-issued verdict form, which had more than 700 points to discuss.

"The jury foreman spoke in great detail about the deliberations, and it was somewhat unusual to get a decision like that so quickly," Chris Rourk, partner at Jackson Walker, told MacNewsWorld. "Whether or not that may have resulted in any error or problems, it's hard to say, but that's one area where the verdict could really be attacked in an appeal."

Samsung expressed its disapproval at the decision, calling the verdict a loss not for the company, but for the "American consumer." The company said it would lead to "fewer choices, less innovation and potentially higher prices," according to a company statement provided to MacNewsWorld by Mira Jang, communications for Samsung.

AAPL soared in after-hours trading following Friday's decision. Its rise continued Monday, with the stock up about 2 percent to $677 around mid-day. Google, which makes the Android operating system that runs on many of Samsung's smartphones, dipped about 2 percent on Monday.

Apple did not respond to our request for comment.

Not Over Yet

"At the end of the day, this is the jury verdict, but it's not the end of the story," said Rourk.

Apple needs to file paperwork that could determine which Samsung products it hopes to ban, and another hearing on Sept. 20 will determine which smartphones and tablets can be kept off U.S. shelves.

In addition to cleaning up loose ends, though, another large-scale fight could ensue. Samsung indicated it will appeal the decision, which likely will lead to a flurry of additional legal wrangling.

"This may just be episode one in the drama that is this case," said Panzer. "Certainly Samsung will appeal. Almost as certain is that Apple will make a motion to enjoin Samsung from selling the infringing products in the U.S. Samsung will, of course, oppose that motion and -- if they lose their opposition -- make another motion asking the court to stay the injunction pending the outcome of the appeal."

In short, said Panzer, the two companies can keep throwing legal punches at each other in the U.S., including Apple's move for an award of its attorneys' fees in the instances of willful infringement. But if one court case couldn't force a settlement out of the two warring parties, the ongoing legal battle might, said Panzer.

"The most likely form is that the parties would agree on a payment from Samsung to Apple in exchange for a license to the infringed patents," he said. "Of course, because it would be a settlement, there would be no admission of infringement, but that's a footnote in the story."

Too Early to Call for Consumers

The range of potential outcomes makes it impossible to call how this could play out for consumers, said Panzer.

"If the parties don't agree on a settlement, Apple would essentially be fighting for the death of Samsung's tablet and smartphones as the market knows them," he said. "A full-blown win for Apple on appeal could very well lead to an injunction preventing Samsung from bringing the infringing devices into the U.S. as they currently stand. Samsung would still be allowed to import its devices if it took out all of the infringing features, but what would that do to their ability to compete with the iPad and iPhone?"

If the companies settle, though, the product offerings wouldn't differ, said Panzer, and it's possible consumers might not notice a slight price increase to cover licensing fees, he added.

However that plays out, the high-profile case -- along with the media coverage and stock highs and lows that accompany it -- might make all of the telecom industry even more cautious, said Rourk.

"It's possible it will make competitor versus competitor litigation perhaps something that parties consider more seriously," he said. "It's always risky when you assert your core patents, because that opens the door to allow a lot of competitors. And every party that's accused of infringement can defend their patents. When you've got a lot of competitors, you could win in one courtroom and feel like you can go down that road with each competitor. That's not unusual, but with two big competitors in a big market displaying that, it's a big verdict."

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