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Apple-Samsung Verdict Carries Implications Large and Small

By John P. Mello Jr. MacNewsWorld ECT News Network
Aug 24, 2012 5:00 AM PT

The outcome of the patent infringement trial between Apple and Samsung is now in the hands of the jury, and while the verdict will have a significant impact on both companies, it will also send ripples through the patent world and smartphone industry.

Apple-Samsung Verdict Carries Implications Large and Small

If Samsung is found not to have violated Apple's patents, it could put the brakes on the current arms race in intellectual property, with firms feverishly seeking to pad their patent portfolios, according to David Mixon, a patent attorney with Bradley Arant Boult Cummings.

"You'll see a cessation in this frantic bidding up of patent portfolios," he told MacNewsWorld. Such bidding drove some patent play deals to "astronomical" levels, he noted, such as Google's US$12.5 billion purchase of Motorola Mobility and the $4.5 billion buy of Nortel Networks patents by a consortium of companies lead by Apple and Microsoft.

"If Apple fails in this attempt to enforce its patents," Mixon continued, "you'll start to see a lot of people starting to have second thoughts about those kinds of deals."

Crimp in Samsung Sales

An Apple victory in the trial, however, would reaffirm the status quo in patent law: Design patent and "trade dress" claims are very difficult to overturn in court, according to Michael Lasky, a patent attorney with Burr & Forman.

"The legal takeaway would be, if one creates a product with an unusual new look, not in the mainstream, and it becomes wildly popular, a competitor will have to find their own way to come up with a 'look' of their own," he told MacNewsWorld.

An Apple victory could also put a crimp in Samsung's smartphone and tablet sales in the United States -- if Apple can get a permanent injunction against the sale of the infringing devices named in the lawsuit, he added.

Apple could win monetary damages without getting an injunction, he acknowledged. Apple is seeking $2.5 billion in damages from Samsung. "It used to be that injunctions were automatic, not so so anymore," he observed.

However, he added, "In this case, I would assume that if Apple wins it will include an injunction."

Samsung Loss, Innovation Gain

Samsung can weather the effects of an injunction, Lasky contended. "Samsung, has already established sufficient customer credibility that it will survive redesign with sufficient momentum that it will not lose much market share," he reasoned.

"Customers typically don't punish infringers by avoiding their products," he added. "If that were so, most Chinese knockoffs wouldn't sell."

His bottom line: "Samsung's and Apple's market share will be mostly unchanged, but in the future Samsung will be more careful of following Apple's lead."

That could foster more innovation in the market, according to Mixon. "It would discourage copying the look and feel of an iPhone," he explained, "but it may drive innovations that are completely different from the iPhone."

Long, Winding Road

Regardless of who wins the wits of the jury in Apple v. Samsung, a verdict in the case is just a bus stop on a long highway to a distant terminal, according to Steven J. Henry, an attorney with Wolf Greenfield.

"There likely will be motions asking the judge to override the jury verdict in one respect or another, and then there will be various issues appealed," he explained to MacNewsWorld.

A jury gets to decide the outcome of fact in a dispute, he noted, but matters of law are decided by judges after a verdict is delivered. Those matters include important points, such as how the wording of patent claims should be interpreted.

"Those interpretations influence whether a patent claim is upheld or stricken as invalid and how broadly it covers a technology," he said.

"So," he continued, "there is a long way to go until a final outcome, and no matter what the jury decides, one should realize the jury verdict is just a step on a long road. An important step, but just a step, nonetheless."

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