Full Impact of Apple's Legal Victory Against Samsung Starting to Show

By Ed Silverstein August 27, 2012

The full impact of Friday’s verdict – which will force Samsung to pay over a billion dollars to Apple for patent infringement – is starting to surface.

Apple was awarded $1.05 billion by the California jury, and Samsung could be ordered to pay damages up to an additional $3 billion, according to news reports.

In addition, Samsung could be forced to pull many of its cell phones and tablets from the U.S. market. Armed with this verdict, Apple could also seek import bans on Samsung devices in other nations.

Friday’s verdict could cause a worry for Google, too, which makes the Android operation system. Other makers of tablets and smartphones may steer away from using the Android OS, which Samsung used in the products that led to the lawsuit.

Meanwhile, Samsung plans to appeal the verdict.

The jury reached the verdict after less than three full days of deliberations. It found that Samsung infringed on six of the seven Apple patents that were the subject of the historic and complex lawsuit.

On the other hand, Samsung did not get any of the damages it sought from Apple, with its counter-claims that Apple had infringed on several of its patents.

A confident Apple appeared elated over the verdict.

“The mountain of evidence presented during the trial showed that Samsung’s copying went far deeper than even we knew,” Apple said in a statement reported by The Verge. “The lawsuits between Apple and Samsung were about much more than patents or money. They were about values. At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy. We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right.”

On the other hand, Samsung said the verdict should be seen “as a loss for the American consumer” – not a “win for Apple.”

“It will lead to fewer choices, less innovation, and potentially higher prices,” Samsung stated following the verdict. “It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies. Consumers have the right to choices, and they know what they are buying when they purchase Samsung products. 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.”

Samsung says it “will continue to innovate and offer choices for the consumer.”

Samsung also released an internal memo, according to Wall Street Pit, which said how Samsung “initially proposed to negotiate with Apple instead of going to court, as they had been one of our most important customers. However, Apple pressed on with a lawsuit, and we have had little choice but to counter-sue, so that we can protect our company.”

“Certainly, we are very disappointed by the verdict at the US District Court for the Northern District of California (NDCA), and it is regrettable that the verdict has caused concern amongst our employees, as well as our loyal customers," the memo continued. "However, the judge’s final ruling remains, along with a number of other procedures. We will continue to do our utmost until our arguments have been accepted.”

“The NDCA verdict starkly contrasts decisions made by courts in a number of other countries, such as the United Kingdom, the Netherlands, Germany and Korea, which have previously ruled that we did not copy Apple’s designs,” the source added. “These courts also recognized our arguments concerning our standards patents.”

Google also released a statement in response to the case, according to The Verge: “The court of appeals will review both infringement and the validity of the patent claims. Most of these don't relate to the core Android operating system, and several are being re-examined by the US Patent Office. The mobile industry is moving fast and all players – including newcomers – are building upon ideas that have been around for decades. We work with our partners to give consumers innovative and affordable products, and we don't want anything to limit that.”

During closing arguments made by both sides last Tuesday, Samsung’s lawyer claimed Apple chose to sue Samsung “rather than competing in the marketplace,” TechZone360 reported. Samsung’s Attorney Charles Verhoeven told the jurors, "It's not against the law in this country to be inspired by your competition."

In response, Apple’s attorney Bill Lee said the company was not attempting to keep Samsung out of the smartphone market. "All we're saying is, 'Make your own,'" Lee told the jurors.

There were some three weeks of testimony presented during the trial including numerous internal company e-mails, statements from designers, and product demonstrations.

Apple sought $2.5 billion from Samsung for the alleged infringement.

Apple and Samsung represent more than half of smartphone sales worldwide.

The verdict did appear to impact the stock of both Samsung and Apple, according to a report from Forbes. Samsung shares were trading 7 percent lower on Monday in South Korea. In late trading on Friday, Apple shares increased $11.73, or 1.8 percent, to $674.95.  And Google shares in late trading on Friday dropped $5.63 to $673.

Reuters estimated that Samsung’s shares dropping 7.5 percent on Monday, led to a loss of over $12 billion from the company’s market value.

But, overall, the verdict may not severely affect Samsung.

"Samsung should be OK; it means a 4-5 percent hit to the bottom line," one Hong Kong-based hedge fund manager told Reuters. “At the end of the day, as Forbes reported recently, Samsung has 65,000 patents versus 9,000 for Apple. Furthermore, Apple relies on Samsung for the processing brains of their phones."




Edited by Braden Becker

TechZone360 Contributor

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