Apple awarded $1 billion in Samsung patent infringement case

Jason Bartlett, center, an attorney for Apple, leaves the courthouse after the jury reached its decision. Apple said evidence in the trial “showed that Samsung’s copying went far deeper than even we knew.”

By Andrea Chang and Jessica Guynn, Los Angeles Times

Aug. 25, 2012 12 AM PT

SAN JOSE — Apple Inc. won an overwhelming victory over rival Samsung Electronics Co. in a widely watched federal patent battle, a decision that some worry could stymie competition in the fast-moving markets for smartphones and computer tablets.

The jury, after three days of deliberations in the complex U.S. District Court trial in San Jose, awarded Apple more than $1 billion after finding that Samsung had infringed on six patents by copying the look and feel of its mobile devices.

The jury found, for instance, that Samsung used Apple’s patented pinch-and-zoom technology, which allows users to make objects on the screen bigger or smaller with a flick of their fingers. It also found that Samsung infringed on Apple’s bounce-back patent, an effect that occurs when a user attempts to scroll beyond the edge of an image or text box.

Apple said after the verdict that the evidence presented during the trial “showed that Samsung’s copying went far deeper than even we knew.”

Samsung called the verdict “a loss for the American consumer” and said it was “not the final word in this case,” an indication it planned to appeal.

Apple’s suit against Samsung was at least in part a salvo in its war against Google over Google’s Android operating system, which Samsung and other companies use on their smartphones and tablets to compete with Apple’s iPhone and iPad.

Apple co-founder Steve Jobs, who died last year, accused Google of ripping off Apple’s technology to build the Android, according to a biography by Walter Isaacson.

Friday’s decision could reshape the mobile landscape in which Android has become far more popular than Apple’s iOS operating system, with Android-powered smartphones outselling iPhones by about three to one.

With Friday’s court victory, Apple picked up some leverage to protect its innovations not just against Google but other competitors as well.

Should U.S. District Judge Lucy H. Koh, who presided over the trial, decide at a Sept. 20 hearing to ban infringing Samsung phones from U.S. store shelves, the damage to the South Korean firm would hit Google as well.

The amount of the award, one of the biggest ever in a patents case, isn’t expected to be much of a financial blow to tech behemoth Samsung. But if it’s upheld, the verdict also could mean major changes in the way future gadgets are made and in the prices consumers must pay, industry analysts said.

“There’s no doubt this affects the customer the most,” said Al Hilwa, a program director at research firm IDC. “It’s about bringing technology prices down and into more users’ hands. But at the end of the day, you’re going to see higher prices, more licensing being paid and a slower pace of innovation.”

Colin Gillis, an analyst at BGC Financial, said that with so many tech companies suing one another in courts around the world, it will be difficult for newcomers to break into the industry.

“If Amazon rolls out a phone, they’re going to get whacked in court,” he said. “If you want to make a phone, you can’t … because of patents.”

The 20-page verdict form was read to a courtroom packed with teams of lawyers and media. Afterward, Apple’s lawyers were all smiles; Samsung’s sat expressionless. Both sides declined to speak with reporters, as did all nine jurors.

In siding with Apple after the four-week trial, the jury found that all of the Cupertino, Calif., company’s patents were valid and said Samsung had “willfully” infringed on most of them. It rejected Samsung’s countersuit claims that Apple had infringed on its patents.

“We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right,” Apple said.

The verdict came coincidentally on the one-year anniversary of Jobs’ resignation as chief executive of Apple.

The speed of the decision came as a surprise to technology experts, who had predicted that a verdict wouldn’t be reached for several more days at the earliest. During the deliberations, the jury never sent out a question or note through the bailiff.

“I thought it would be more of a split verdict, but it seems like a really, really big win,” Hilwa said. “I would have thought it was a weak case: Phones always look like slabs and whether it’s contoured around — I don’t even know if that makes a difference to be honest, but obviously the jury feels differently.”

But Florian Mueller, a patent expert, said he thought “the jury largely got it right.”

“We all have to be careful about intellectual property rights,” he said. “In this particular case, Samsung’s copying was so intentional and reckless that in my view the court had to draw a line somewhere.”

Still, Mueller said he expected Samsung would only need to modify the designs of some of its smartphones and wouldn’t have to implement large-scale changes to its products.

The trial was just one piece in a global patent war that has broken out among several top smartphone makers as they fight for dominance in the fast-growing market valued at more than $200 billion.

Apple and Samsung have brought more than 50 lawsuits against each other in 10 countries on four continents.

Earlier Friday, a three-judge panel in South Korea found that both companies had infringed on each other’s patents and banned the sale of some Apple and some Samsung products in the country. Both sides were ordered to pay limited damages.

Also on Friday, the U.S. International Trade Commission decided that Apple didn’t infringe on two wireless technology patents owned by Google’s Motorola Mobility unit. The commission, though, kept the case open for a judge to determine whether Apple had infringed on a third patent.

Industry watchers said the complicated legal proceedings across so many jurisdictions are creating such a web of rulings that it will be difficult for any company to know what to do. They noted that the U.S. case is still far from a final resolution.

“It’s not like the Brink’s truck drives up on Monday,” Gillis said.

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Chang reported from Los Angeles, Guynn from San Jose.