Apple vs. Samsung: Legal fight heats up over iPhones, iPads
Apple and Samsung, bitter adversaries in the smartphone and tablet market, face off in federal court this week in a high-money, high-stakes battle.
SAN FRANCISCO — Two tech titans will square off in federal court Monday in a closely watched trial over control of the U.S. smartphone and computer-tablet markets.
Apple filed a lawsuit against Samsung Electronics last year alleging the world's largest technology company's smartphones and computer tablets are illegal knockoffs of its popular iPhone and iPad products. The Cupertino-based company is demanding $2.5 billion in damages, an award that would dwarf the largest patent-related verdict to date.
Samsung counters that Apple is doing the stealing and that some of the technology at issue — such as the rounded rectangular designs of smartphones and tablets — has been industry standards for years.
U.S. District Judge Lucy Koh in San Jose, who practiced as an intellectual-property litigator in Silicon Valley for eight years, is scheduled to start jury selection Monday.
The companies have sued each other in Britain, Australia and South Korea, among other countries, in a bid for dominance of a mobile-device market with an estimated worth of $312 billion last year.
The trial is the latest phase in a global campaign of smartphone patent litigation that began more than two years ago. The legal clashes mainly pit Apple against rival smartphone makers whose handsets are powered by Google's Android software, notably Samsung, HTC and Motorola Mobility, which Google bought last year. Dozens of lawsuits and countersuits have been filed in courtrooms around the world.
Will Stofega, a technology-industry analyst with IDC in Framingham, Mass., said this case is "much more cutthroat and nasty" than most lawsuits between technology companies, which usually settle.
Stofega said he expects the dispute to drag on in courtrooms around the world even as it strains an important relationship between the two companies — Samsung being one of Apple's biggest component suppliers.
A few significant rulings in favor of one side or the other, industry and patent experts say, could shape the competitive landscape in smartphones and a sister industry, tablet computers. Court decisions, they say, can provide the basis for negotiating the terms and cost of licensing and cross-licensing of patents — or for keeping certain patented features exclusive to one company.
"Once you determine who is the genuine innovator, and in what technologies on the product, you reset the playing field," said Kevin Rivette, a Silicon Valley patent consultant and former vice president of intellectual property strategy for IBM.
Claiming Apple is infringing two patents covering mobile-technology standards and three utility patents, Samsung is demanding royalties of as much as 2.4 percent for each device sold.
Samsung, based in Suwon, South Korea, said in a court filing it plans to show jurors evidence that in 2006, before Apple's January 2007 introduction of the iPhone, Samsung was developing the next generation of mobile phones, envisioning "a simple, rounded rectangular body dominated by a display screen with a single physical button on the face."
Apple is trying to deflect Samsung's infringement claims in part by arguing that Samsung deceived the European Telecommunications Standards Institute, according to a court filing. Samsung was pushing the organization to adopt certain standards without disclosing that it had applied for patents covering the same technology, Apple claims.
Samsung denies the allegation and countercharges that Apple copied its iconic iPhone from Sony. Samsung lawyers noted that the company has been developing mobile phones since 1991 and that Apple jumped into the market only in 2007.
"In this lawsuit, Apple seeks to stifle legitimate competition and limit consumer choice to maintain its historically exorbitant profits," Samsung lawyers wrote in their trial brief filed Wednesday. "Android phones manufactured by Samsung and other companies — all of which Apple has also serially sued in numerous forums worldwide — offer consumers a more flexible, open operating system with greater product choices at a variety of price points as an alternative to Apple's single, expensive and closed-system devices."
Mark Lemley, a Stanford Law School professor, says it also appears that Apple was motivated to file the lawsuit, at least in part, by its late founder's public avowals that companies using Android to create smartphones and other products were brazenly stealing from Apple. To that end, Samsung's attorneys made an unsuccessful pitch to have the jury hear excerpts from Steve Jobs' authorized biography.
"I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong, I'm going to destroy Android, because it's a stolen product," Jobs is quoted as saying in Walter Isaacson's book "Steve Jobs" published in November. "I'm willing to go thermonuclear war on this."
But the judge barred those statements in a ruling earlier this month. "I really don't think this is a trial about Steve Jobs," Koh said.
Samsung may be unwilling to negotiate due to its ability to profit from selling devices at a wide range of prices. During the first quarter, Samsung sold more than 40 percent of all mobile phones that run on Android. Android was installed on 56 percent of new smartphones, more than twice Apple's share.
Moreover, Lemley said, Koh's order last month barring sales of the Galaxy Tab 10.1 tablet would be lifted at the end of trial if Samsung wins. Samsung may be willing to take whatever risks a trial presents rather than pay what Apple requires to lift the injunction, he said.
With so much at stake for both companies globally, Apple and Samsung eventually will have to resolve their differences out of court, Lemley said, citing pending patent litigation over mobile devices also involving HTC and Google's Motorola Mobility unit.
"Smartphone patents are like nuclear weapons in the Cold War — there are just so darn many of them," Lemley said. "Apple is riding high right now, but a year from now it may be Apple's products being enjoined on the basis of a Motorola or HTC or Samsung patent. Taken to their logical conclusion, everyone in this market could shut down everyone else."
"It shows you how interlocked these companies are," he said.
Compiled from Bloomberg News, The Associated Press and The New York Times