Samsung nailed for $1 billion vs. Apple

Article by: NICK WINGFIELD , New York Times
Updated: August 25, 2012 - 6:55 AM

The verdict gives Apple a new advantage against Android rivals.

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FILE - In this Aug. 25, 2011 file photo, an attorney holds an Apple iPad, left, and a Samsung Galaxy Tab 10.1

Photo: Sascha Schuermann, Associated Press - Ap

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Apple won a decisive victory Friday in a lawsuit against Samsung, a verdict that will give Apple ammunition in a far-flung patent war with its global competitors in the smartphone business.

The nine jurors in the case, who faced the daunting task of answering more than 700 questions on sometimes highly technical matters, returned a verdict after just three days of deliberations at a federal courthouse in San Jose, Calif. They found that Samsung infringed on a series of Apple's patents on mobile devices, awarding Apple more than $1 billion in damages.

That is not a big financial blow to Samsung, one of the world's largest electronics companies. But the decision was closely watched because it could help shape the balance of power in the growing smartphone and tablet computer business. It could also give Apple a tool it can use to more aggressively protect its innovations from a fleet of rivals flooding the market with competing devices.

While Apple received far less than the $2.5 billion it had asked for in the trial, lawyers said there was little question which side won. "This is a huge victory for Apple," said Mark Lemley, a law professor at Stanford University.

The jury found that various Samsung products violated Apple patents covering things like the "bounce back" effect when a user scrolls to the end of a list on the iPhone and iPad, and the pinch-to-zoom gesture that users make when they want to magnify an image. Samsung was also found to have infringed Apple patents covering the physical design of the iPhone.

In its decision on a countersuit by Samsung, the jury added some sting by finding in favor of Apple across the board. Samsung had asked for more than $422 million from Apple, contending it had violated Samsung's patents, but got nothing.

Trouble for Android?

Despite the eye-popping award, the more important long-term effect of the jury's decision could be the impact it has on Android, the Google operating system used by Samsung and a broad array of other companies in their devices. For every iPhone sold worldwide, more than three smartphones running Android are sold, reflecting the meteoric rise of Google's software.

Apple's suit against Samsung, the largest maker of smartphones in the world, has partly been viewed as a proxy war against Google, which Apple executives have derided as a copycat, swiping Apple's innovations. Steve Jobs, the late chief executive of Apple, told his biographer that Android was a "stolen product."

Jobs vowed that Apple would resort to "thermonuclear war" to destroy Android and its allies.

Android is becoming even more important to Google's mobile aspirations because Apple is starting to phase out some of Google's services, such as mapping and YouTube, as built-in features on the iPhone and iPad.

Possibility of injunction

The judge in the Samsung case could issue an injunction preventing Samsung from shipping products that infringe on Apple's patents. The verdict could also bolster Apple's legal attacks on Android devices from other companies and deter them from incorporating iPhone-like features in their products.

"It's going to make it very difficult for not only Samsung, but for other companies to mimic the Apple products," said Robert Barr, executive director of the Berkeley Center for Law and Technology at the University of California, Berkeley.

The stakes in the case were enormous, in large part because Apple has become the most valuable public company ever through the success of its mobile products.

The evidence Apple presented during the trial, including internal Samsung memos and strategy documents, left little doubt that the iPhone inspired a major effort by the Korean manufacturer to overhaul its mobile phone efforts.

But a key question throughout the trial was whether the jury would decide that Samsung had stepped over the line by improperly copying Apple's technologies.

The verdict in the trial hardly concludes the legal battles over patents among companies in the mobile business. There are dozens of legal cases between Apple and Samsung winding their way through courts in other countries. And Samsung could challenge the decision.

In a statement, Katie Cotton, an Apple spokeswoman, applauded the court for sending a "clear message that stealing isn't right."

"We make these products to delight our customers, not for our competitors to flagrantly copy," she said.

In a statement, Mira Jang, a spokeswoman for Samsung, said the decision was a "loss for the American consumer."

"It will lead to fewer choices, less innovation, and potentially higher prices," she said. "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."

The Associated Press contributed to this report.