Apple Wins $1 Billion Patent Suit Against Samsung, May Get Triple Damages

Apple has won a huge victory in the smart phone patent wars. If the news reporting is accurate, the outcome doesn't pass the common sense test.

Apple has won a $1 billion judgment against Samsung in the smart phone patent wars.

Howard Mintz, Mercury News (“Apple wins $1 billion victory over Samsung“):

In a verdict that would have warmed the heart of the late Apple CEO Steve Jobs, a federal jury on Friday handed Apple a resounding legal victory in its bitter patent war with Samsung, ordering the South Korean tech giant to pay more than $1 billion in damages for “willfully” copying the iPhone and iPad.

Legal experts say the jury’s finding of willful infringement enables Apple to seek to triple the billion-dollar damage award, already believed to be an unprecedented judgment in a patent trial. The verdict also sends a threatening message to Samsung and other Apple competitors in the mobile-phone and tablet industry that use Google’s Android operating system, potentially making it harder for them to compete with the Cupertino-based tech giant in the multibillion-dollar industry.

Ticking off one by one the findings in a 20-page verdict, the jury said that a wide range of Samsung smartphones and its Galaxy tablet trampled on Apple’s patent rights. The jury in particular found Samsung’s Fascinate, Epic 4G and Galaxy S II smartphones were rogue products that warranted more than $100 million each in damages for copying the iPhone, although the panel spared Samsung much punishment for infringing the iPad.

[…]

“The verdict will be hard to dislodge,” said Stanford University law professor Mark Lemley. “It’s clear the jury took their job very seriously.”

The jury’s verdict was the most important milestone in the nearly two-year global war between the two tech giants over legal rights in the smartphone and tablet market. At stake is Apple’s grip on the huge U.S. market and the impact of its aggressive claims that Samsung is propelling itself with devices that copy the iPhone and iPad, two of the most recognizable products ever produced.

With the U.S. marketplace key, the verdict gives Apple a leg up in a legal firestorm that has stretched from San Jose to Australia, across Europe and into Asia. On Friday, a South Korean court issued a split ruling in a similar patent fight there, siding with Samsung on some claims and Apple on others. That decision came just hours before the jury declared Apple the clear winner in the Silicon Valley case.

NYT reporters Brian Chen and Lisa Alcalay Klug call it “A Verdict That Alters an Industry.”

The federal court jury’s decision Friday in a smartphone patent lawsuit between Apple and Samsung is expected to alter the dynamics of the highly competitive mobile phone industry.

For Samsung, which lost on almost every count in the closely watched trial in San Jose, Calif., and was ordered to pay more than $1 billion in damages, the implications are more obvious. It will have to be cautious in how it designs products to avoid being accused of imitating Apple.

Other makers may become more cautious, too. Google, which makes the Android software that runs at the core of Samsung phones, will clearly feel an impact through its hardware-making partner. Microsoft, however, which is attempting to enter the market with new software, will feel less of an effect, industry experts said.

Apple has been the smartphone market leader. It defined the category in the way phones look and how users interact with them. Most popular smartphones today are a slab of glass and metal controlled through a touch-screen full of icons arrayed on the screen. Because consumers are familiar with that format, phones from various makers tended to look and behave similarly.

Those similarities might be the first things to change. “Companies in the future are going to have to consider how much they want their product to look and feel like their competitors’ products in terms of shape, size, the way it feels, the way it looks, how the icons are similar, or will the icons be quite dissimilar” said Robert W. Dickerson Jr., a lawyer who is the head of the West Coast intellectual property practice for Dickstein Shapiro, a patent law firm not involved in the Samsung-Apple case.

Microsoft and its main hardware partner Nokia, at the very least, should have an easier time of it. Robert Barr, executive director of the University of California Berkeley’s Center for Law and Technology, said that the user interface — the icons and other features that users see and touch — of the Nokia Windows phones look distinctly different from the iPhone. Nokia, a longtime maker of phones, also has a thick portfolio of patents to protect itself. For Microsoft and Nokia, which are trying to make a comeback in smartphones, this design distinction is a clear advantage in the internecine patent wars sweeping the industry as much as it is a marketing advantage.

Things could get tougher, however, for Google, or any phone maker using its Android software. Android phones are the most common smartphones on the market today. Samsung is the world’s largest maker of smartphones and it has been quickly gaining market share. Collectively, the various Android phones from Samsung and other makers easily outsell Apple’s iPhones.

While Google is not involved in this case, Apple was clearly going after Android all along, said Robert P. Merges, professor of law and technology at University of California Berkeley School of Law. If other handset makers using Android fear that Apple will take them on and win, might they shy away from Android? “There are a lot more players in the Android world who could be involved in the future in litigation,” he said. “And it’s going to raise the cost of everyone in the Android system if the damages stick.”

Nor, as WSJ‘s Jessica Vascellaro reports (“Apple Wins Big in Patent Case“) is this the end of it:

Among other findings, the jury at the U.S. District Court found that many of the Apple patents were willfully infringed by Samsung. That means that Judge Lucy Koh now has the discretion to triple Apple’s damages award, said Brian Love, an assistant professor at Santa Clara University School of Law, who has been tracking the case. “This is a huge, crushing win for Apple,” he said.

On Friday, Apple filed a motion seeking a preliminary injunction against Samsung’s products. Judge Koh asked Apple to submit data on what products Apple wants covered by an injunction and how each is covered by the jury verdict.

While the ruling won’t affect the companies’ latest products, it could shape how smartphones and tablets are designed and the fortunes of companies that make them.

Apple’s legal campaign is partly aimed at trying to beat back the gangbuster growth of Android, the operating system created by Google Inc. GOOG +0.27% that is used by Samsung and other device makers. In the second quarter, Android phones—which are made by many phone makers—represented 68% of smartphone shipments, while Apple’s represented 17%, according to market research firm IDC.

Google had no immediate comment.

Friday’s jury decision that the six infringed Apple patents—including three covering the shape of the iPhone and on-screen icons—are valid may make it harder for handset makers to enter markets with gadgets that look and work too much like a market leader’s.

I’m an expert in neither patent law nor software coding, so don’t have much additional insight to share here. But, based solely on the reporting here, the outcome doesn’t pass the common sense test.

While I strongly support the notion that people and firms ought have strong protections for its intellectual property and be allowed to profit handsomely from innovations that catch on, it seems on the face of it here that the concepts being protected here are so obvious that they shouldn’t be patentable. The use of icons to depict software applications has been industry standard for decades now, so it’s not at all clear why Apple’s buttons should be protected. For that matter, the idea that, on a smartphone or other small device, it would be easiest to manipulate said icons with one’s fingers rather than an external interface like a keyboard or mouse, isn’t exactly a stunning insight.  So, if all Samsung was doing is also making a phone that had apps represented by icons that were accessed by tapping with the fingers, I’m baffled that the case wasn’t thrown out pre-trial.

If, on the other hand, Samsung was reverse-engineering Apple’s manufacturing process, coding, or whathaveyou and simply copying them—or even making slight improvements—then I’d agree they should be liable for damages. Or, for that matter, if the industry had for years been stumped as to how to build a touch-based interface and Apple solved the problem, I’d agree that they ought to be able to patent that process, forcing other companies to either pay royalties for using said process or elsewise figuring out a unique way of doing it on their own.

But, from the reporting, it sure sounds like it’s the first situation rather than the second.

FILED UNDER: Law and the Courts, Science & Technology, , , ,
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. JKB says:

    I’m an expert in neither patent law nor software coding, so don’t have much additional insight to share here. But, based solely on the reporting here, the outcome doesn’t pass the common sense test.

    I believe you left out a “not” in the first sentence.

    However, your application of common sense is misplaced. Laws and regulations are made by lawyers, politicians and bureaucrats. Common sense is the one thing they have in short supply and rarely employ it in the law.

    the notion that people and firms ought have strong protections for its intellectual property and be allowed to profit handsomely from innovations that catch on,

    This notion is what powered the industrial revolution and brought forth our modern world. It has brought billions out of subsistence poverty and permits the poor person with a good idea to transform the world even in the face of the statists and government men. I can’t recommend William Rosen’s ‘The Most Powerful Idea in the World’ enough.

  2. Dave Schuler says:

    Apple’s code should be protected by copyright; other aspects of its products by trade secret. It should never have been issued patents on what it’s claiming as its intellectual property for reasons of obviousness and prior art.

    I have no idea whether this verdict is likely to be set aside on appeal. My guess is that for relief we’re going to need to appeal to the Congress which, unfortunately, has sided with those claiming ideas in the public domain as their exclusive property.

  3. JKB says:

    @JKB:

    I should add, that doesn’t mean we shouldn’t clean up what is patentable and sort out this patenting of rather obvious ideas. Better to patent the mechanism that permits the icons to function since that is where we need to protect the innovations.

  4. mattb says:

    based solely on the reporting here, the outcome doesn’t pass the common sense test.

    Bingo… As someone else already tweeted, if Xerox had patented or enforced the patent on displaying content within an onscreen window Steve Jobs (and Bill Gates) would have been screwed.

    The entire idea that pinch to zoom is worthy of patent protection makes me wonder if “turning a page to advance in a book” or “pressing a button to turn on a TV” could have been patented as well.

    This will hopefully go all the way to the Supreme Court and *perhaps* finally start a process to fix our very broken patent system (which needs to exist but has gone really into the weeds).

  5. mattb says:

    @Dave Schuler:

    It should never have been issued patents on what it’s claiming as its intellectual property for reasons of obviousness and prior art.

    Repeated because it’s true.
    @JKB:

    This notion is what powered the industrial revolution and brought forth our modern world. It has brought billions out of subsistence poverty and permits the poor person with a good idea to transform the world even in the face of the statists and government men.

    There’s another side to that story — I suggest reading the works of Lawrence Lessig for a collection of stories about how patents and copyrights have also been used to suppress “good ideas to transform the world” by larger commercial entites through patent litigation.

    The fact is that the current patent system is totally broken (though not as bad as copyright) and needs to be completely reworked.

    Unfortunately as Dave states there is far too much collusion between those ” statists and government men” and the large companies that resulted from those “poor men who transformed the world” to hope for anything in the near future.

  6. Tsar Nicholas says:

    Apple is based in Cupertino and is a Silicon Valley cash cow. Samsung is a Korean company. The trial was in San Jose. You could see this jury verdict coming from a billion miles away.

    Juries shouldn’t be allowed in the first instance to decide patent infringement cases and our patent laws themselves are and for decades have been in need of some very serious reforms. Not only in connection with technology. Our patent laws also are FUBAR in connection with Rx drugs, medical devices, biotech and energy. It also would be helpful if Congress for once and for all cleared up the crucial dichotomy between patent protection and copyright protection.

  7. grumpy realist says:

    @Tsar Nicholas: I can’t believe that Samsung didn’t try to invalidate Apple’s patents in light of the recent SCOTUS decisions on obviousness.

    This was a decision at the DC level, right? We’re going to see it appealed to the Federal Circuit, who may or may not uphold it, depending on who’s sitting on the bench that week. (I kid you not.) If this did manage to get to SCOTUS (which it probably won’t), they’d probably claim the appellee has invalid patents, considering how they’re trying to tighten up on patent eligibility.

    And don’t bitch about the triple damages; they were written into the statute.

    Remember, we’ve just passed the America Invents Act, which hasn’t even gone into effect. Wait and see what happens……oh, and if you want good commentary on the Apple-Samsung decision, read IPWatchdog and PatentlyO, both excellent IP blogs. (Ignore the commentators; most of the time it’s not worth wading through the peanut gallery.)

  8. My perspective, as a computer user since the TRS-80, is that computers have trended toward being “display only” for years. Make everything else as small as possible, you end up with a tablet. To do touch-screen only was audacious, but touch-screens had long existed, and the idea to NOT use a keyboard or stylus should not be protected.

    @mattb:

    Remember, Xerox sold a bunch of tech to Apple on the cheap. And Apple licensed a batch of tech to Microsoft for Windows 1.0. There was later contention on how much MS could expand that windowing system of course, and etc.

  9. rudderpedals says:

    I’m outsourcing my response to David Schuler and note that the madness will continue until the software patent zombie is banished back down the rabbit hole it was conjured from.

  10. JKB says:

    @mattb: There’s another side to that story — I suggest reading the works of Lawrence Lessig for a collection of stories about how patents and copyrights have also been used to suppress “good ideas to transform the world” by larger commercial entites through patent litigation.

    Patents, or the right to profit from your ideas is good, our particular implementation could use some work. On the upside, once the patent expires these broad patents cover a lot of area that then becomes public domain. That doesn’t mean we should continue allowing patents for obvious, broad or simple to implement ideas. The purpose of the patent was to provide protection to the person with the idea while it was brought to market in exchange for sharing that idea with the world. I will leave it to the experts such as Lessig to work out where the protection is needed and where it is achieves the opposite of its goal.

  11. Armando says:

    It is aludicrous ruling.

  12. bill says:

    off topic but i always wondered if the “anti big business” crowd that seems to despise the largest companies in the world will turn on apple anytime soon? just a thought but probably not, the “warm/fuzzy” image that apple has seems to atone for any amount of off shore labor they abuse but aren’t help accountable for. i’m sure there were a few on the jury as well.

  13. @bill:

    It’s always fun to watch someone assault their own stereotype.

  14. TastyBits says:

    Windows 8 and Nokia just won big, really big.

    This is one of the reasons tech companies sit on cash.

  15. PJ says:

    @James Joyner:

    If, on the other hand, Samsung was reverse-engineering Apple’s manufacturing process, coding, or whathaveyou and simply copying them—or even making slight improvements—then I’d agree they should be liable for damages.

    Reverse engineering and creating the same kind of process, whatever is perfectly legal as long as you do it right, that is by keeping the people who reversed engineered it away from creating the your version of what was reversed engineered.

  16. neil hudelson says:

    @TastyBits:

    My thoughts too. While Microsoft still will run into problems with the ludicrous touch interface/icon protection, they’re UI is completely different than Apple’s. Androids on the other hand was remarkably similar

    On a related note, if you haven’t tried a windows phone you should. As soon as my contract is up I’m switching away from android.

  17. Gustopher says:

    Friday’s jury decision that the six infringed Apple patents—including three covering the shape of the iPhone and on-screen icons

    The share of the phone is a rounded rectangle. the icons are square.

    There’s lots of innovative things in the iPhone that they should be able to protect — antenna running along the outside for instance — but basic shapes should not be.

    However, Apple should get the hide of the graphic designer who made the Android “telephone” icon to brandish as a trophy. It’s even the same shade of green.

  18. mattb says:

    @JKB:

    The purpose of the patent was to provide protection to the person with the idea while it was brought to market in exchange for sharing that idea with the world. I will leave it to the experts such as Lessig to work out where the protection is needed and where it is achieves the opposite of its goal.

    The issue I took with your posts — just to be clear — is that your general level of praise for the patent system and what it provides, suggests that you’re really not aware of how badly broken it is (and has been for quite sometime). My suggestion that you do some research is to appreciate it’s problems (NPR/PRI/Planet Money/This America Life have also done some terrific introductory journalism around the topic, in particular patent trolling).

    The reason that this is important to understand, as Tsar Nick points out (good posts on this subject BTW) is that people really need to understand how badly awry the system has gone so that they might begin to agitate for real change.

    Again, IP needs to be protected, but right now things have swung so far to the favor of large corporations that the very system that was set up to create innovation is largely stiffing it in may cases in order to protect existing industry not new ideas.

  19. mattb says:

    @neil hudelson:

    While Microsoft still will run into problems with the ludicrous touch interface/icon protection, they’re UI is completely different than Apple’s.

    I’ve played a bit with Windows phones, and last I checked there is still a lot of overlap on things like “pinch to zoom” and “slide to unlock” — both things that, according to this finding are protected inventions (even though you can find analogs in movies and concept videos going back to the early 80’s at the very least).

  20. grumpy realist says:

    Guys, if you really think the patent process is broken, then write letters to your congresscritters and complain. SCOTUS seems to flip-flop back and forth between trying to define patent law via its decisions and leaving the interpretation up to Congress. There are quite a few 5-4 decisions where one side is saying they have to solve a problem and the other side is saying that it’s not SCOTUS’s job to fix stuff and if there were a problem, it’s up to Congress to write new law.

    Also remember that patent law is one of the few areas where SCOTUS will come out with a decision which then gets ignored by all the lower courts. If you look at recent SCOTUS decisions (KSR, Bilski, Prometheus) you will see that SCOTUS is doing its best to get rid of a lot of the types of patents that everyone is complaining about.
    Also don’t forget that under the AIA it’s become much easier for third parties to bring challenges against newly issued patents. So if you think a patent is stupid, track down the prior art and speak up!

  21. grumpy realist says:

    @Gustopher: Was the shape protected under a utility patent or a design patent?

    Much easier to get a design patent, but it’s also much easier to design around it.

  22. JKB says:

    @mattb:

    Okay the system needs work but I’m not going to condemn the innovation that transformed the world and brought health, wealth and quality of life to 7 billion people, not counting those who’ve gone before in the last 220 years.

    “From the time of Pericles until the end of the 18th century in London—2,300 years,” notes Harvard Prof. Lawrence Summers, “standards of living on Earth increased perhaps 100%.” In the U.S. since 1790, by contrast, real per capita gross domestic product has increased nearly 4,000%. Quality of life, in other words, increased 40 times more in 220 years of American history than it had globally over two millennia. In 2012, a typical American in the bottom fifth of the income distribution has a far higher quality of life—and life expectancy—than the average member of the top 1% in 1790. source