Posted on 24 Jul 2012 by Neilson
Samsung Electronics Co. recently leapfrogged Apple Inc.'s the world's largest seller of smartphones.
But whether Samsung got to the top legally or, as Apple claims, cheated its way there by ripping off the designs behind Apple's iPhone and iPad, is a question that jurors will decide in the kind of roll-the-dice trial that even the fiercest rivals typically try to avoid.
Barring a last-minute settlement, the trial is slated to start on Monday inside a concrete federal courthouse in San Jose, Calif. The case will test some of the central claims of design theft and patent infringement made in courts around the world by Apple and makers of smartphones and tablets powered by Android, the mobile software platform owned by Google Inc.
The global battle dates back to 2009, with lawsuits filed between Apple and Nokia Corp. and it has since ensnared the industry's big players in litigation all over the world, providing fodder for critics of the patent system, including members of Congress.
One common complaint: The U.S. Patent and Trademark Office and similar agencies have issued too many patents over the years, especially on software designs, and patent holders are clogging the courts with frivolous lawsuits.
Samsung, which uses Android in its most popular devices, captured 29% of the world-wide smartphone shipments in the first quarter of the year, compared with 23% for Apple, according to technology research firm IDC.
In the trial, Apple will argue that Samsung got to the top largely through a deliberate companywide strategy to copy Apple. In response, Samsung will likely argue that Apple's designs aren't as unique as the company says and that Apple is infringing on some Samsung patents, including two governing how cellphones transmit information.
Said a Samsung spokesman: "Samsung has proved many times in court that Apple's claims lack merit and are unfounded."
An Apple spokeswoman reiterated Apple's earlier statement in the case saying "this kind of blatant copying is wrong" and that Apple will fight to protect its intellectual property.
If Samsung were forced to either take its products off the shelves or "design around" Apple's patent, it could help Apple beat back competition from its rival. Patent experts say that, while a sweeping win for Samsung that costs Apple billions of dollars in licensing fees and forces its products off the shelves isn't the likeliest outcome, it is within the realm of possibility.
For companies the size of Apple and Samsung, jury trials can be highly risky. The 10 jurors in this case, most of whom will likely be lay people with little prior understanding of software design or the patent system, will have the power not only to determine liability, but to put a dollar figure on damages.
An 11th-hour settlement might be out of reach for the companies. Several rounds of talks have gone nowhere, and since the first suit was filed 15 months ago, the sides have fought on nearly everything, from procedural technicalities to the statements each side can invoke from Apple's late, iconic co-founder Steve Jobs.
Complicating matters: Apple is the largest customer for Samsung's component divisions, which make chips and displays for smartphones and tablets.
The trial's outcome could change the trajectory of other patent battles, which, so far, have yielded few sweeping victories, with companies sometimes working around any injunctions to avoid halting product sales.
"Apple has pushed a consistent narrative, that it designed the smartphone and all the Android manufacturers ripped them off," said Michael Carrier, a patent expert and law professor at Rutgers University, Camden, N.J. A jury verdict either "for or against that narrative" could cause the companies to re-examine their positions and possibly spur settlement talks in the other cases, said Mr. Carrier.
Lucy H. Koh, the 43-year-old judge overseeing the case, knows patents. Before she moved to the bench, she worked in private practice for nine years as a patent lawyer, and even worked on a patent case against Apple. Lawyers describe her as smart, hardworking, and possessing a demeanor described by one as "a bit more formal" than other federal judges in the Bay Area.
Even so, the trial will put Judge Koh to the test. One Silicon Valley lawyer called the trial "baptism by fire" for Judge Koh, who has been on the federal bench for only about two years and has yet to preside over a trial of this magnitude.
Apple has already one significant win under its belt in the case. At the request of Apple, Judge Koh issued an injunction last month banning sales of Samsung's Galaxy Tab 10.1 tablet computer pending the outcome of the trial. "Although Samsung has a right to compete," she wrote, "it does not have a right to compete unfairly, by flooding the market with infringing products."
Still, the bulk of the burden during trial will fall to Apple, which must convince jurors that "it was more likely than not" that Samsung phones and tablet computers infringed nine of Apple's intellectual property rights, including ones that dictate the look and feel of its iPhone and iPad tablet computers.
Apple will also claim that Samsung copied "rubber banding," the term used to describe the way smartphone images pull away from an edge and bounce back when a user "overscrolls" with a finger, in addition to a design covering how an iPhone or iPad screen, when touched, communicates with the underlying operating system.
Putting forth a clear story to a jury that might not have technical training will be a challenge for Apple's lawyers, led by Harold J. McElhinny at Morrison & Foerster LLP. Mr. McElhinny, 65, an affable West-Coast native, is part of an older guard of Silicon Valley's intellectual-property lawyers. He helped represent Fujitsu against IBM in a landmark software copyright case in the 1990s, and successfully represented cable-box maker Echostar Communications Corp. in a high-profile patent dispute against Gemstar-TV Guide International Inc. in the early 2000s. Leading the way for Apple on its defensive strategy: patent lawyer William Lee of Wilmer Cutler Pickering Hale & Dorr LLP.
The challenge is somewhat different for Samsung's lead lawyer, Charles Verhoeven of Quinn Emanuel Urquhart & Sullivan LLP. Mr. Verhoeven, 49, a soft-spoken Iowa native who has handled much of the work for Android-based smartphone makers against Apple, will also have to grapple with keeping things simple for a jury.
But if jurors end up baffled, it is Samsung, not Apple, that would likely benefit.
"If a jury gets confused, or can't agree, it raises the chances of a hung jury," said Florian Mueller, a patent expert and intellectual-property consultant who isn't involved in the case. "That just benefits Samsung."
In addition to pushing several patent claims of their own, Samsung's lawyers are expected to argue, as they have in court papers, that Apple's broad design patents on the iPhone and iPad are invalid because others actually developed, and documented, them first, and that copying ideas isn't illegal if doing so doesn't infringe patents.
Samsung is expected to argue that functional demands of the product lines—like that a tablet computer be flat and rectangular or that a smartphone fit in one hand—means that the devices often look alike.
"It's the microwave-oven argument," said Mr. Carrier of Rutgers. "A microwave oven, like a smartphone or a tablet computer, by its nature tends to have a certain form." Just because some resemble each other "doesn't always mean you've got patent infringement," he said.
Based on his reading of the court papers, Mr. Mueller called it "fairly clear" that Apple didn't invent the iPod and iPhone out of thin air—it relied to some degree on innovations that already existed.
"This is the way innovation typically works," he said. At the same time, said Mr. Mueller, Samsung has made a host of products that look quite similar to Apple's.
"So the question is this: where do you draw the line between what's innovation and what's theft?" he said. "And that's not going to be an easy one for anyone to answer."