The long-standing patent war between two smartphone giants - Apple Inc. (AAPL) and Samsung Electronics (SSNLF) – shows no signs of letting up. In the most recent development US District Judge Lucy Koh, who has been presiding over the case for the last three years, denied Apple's request for a permanent ban on the sale of some Samsung products in the US, marking a victory for the Korean smartphone maker. However, the picture is not so rosy for Samsung since the judge also approved an award of $930 million in damages to Apple.
When Koh had denied the ban request a second time, the court had asked Apple to present substantial evidence that patented features were affecting consumers’ purchasing decisions. Last year in a November retrial, the court had allowed Apple to renew its injunction plea to ban Samsung products, which Apple renewed in December. Apple has continued to seek a ban since monetary damages were not deemed an adequate remedy.
How it started
The patent battle between the smartphone giants started back in 2011, when Apple sued Samsung for copying the iPhone’s look, design and other features in its Galaxy Products line. Apple had demanded $2.5 billion in damages but the jury had asked Samsung to pay $1.05 billion in August 2012. The court also concluded that Samsung had infringed upon six out of seven patents, excluding its tablet design which had a rectangular shape and rounded edges. On the other hand, the court ruled that Apple did not infringe any of Samsung's patents which included communication standards and wireless technologies.
This was not the first time Apple had sought a ban on Samsung's products. In December 2012, Apple’s request for a ban was denied on the grounds of an insignificant connection between Samsung’s infringements and the loss in iPhone sales.
Much to Samsung's relief, Lucy Koh reduced the amount of damages by nearly 43% in March 2013 on the pretext that the jury had made an error in calculating the penalty on patent infringement. In addition, the judge ordered a retrial for a proper assessment of the damages.
Later, in a November 2013 retrial, Samsung was slapped with $290 million in damages as 13 of its devices were found to be infringing various patents – bringing the total amount of damages to $930 million in favor of Apple.
In December 2013, Apple renewed its request for a ban on Samsung products. The court had asked Apple to present substantial evidence that alleged patent infringements by Samsung were significantly affecting consumers’ purchasing decisions. Apple claimed that the Korean smartphone maker frequently brought new products into the market which were not much different from its previous offerings and alleged that they were found to be infringing different patents.
The judge had also allowed both companies to settle the matter out of court through mediation before the retrial. Mediation between both companies took place in February 2014, eventually failing and leading to a trial that took place on March 6, 2014.
Latest Verdict
Judge Lucy Koh has now rejected the plea for a ban on sales of Samsung products on grounds that Apple has not been able to prove a connection between affected iPhone sales and copied patented features. Koh stated in a ruling that the Apple survey overstated the value consumers placed on the patented features that Apple claims Samsung has incorporated in its phones. Additionally, Koh stated that other features such as battery life, operating system and Mp3 player functionalities carried more importance but were not part of the survey.
The judge did however, approve the $930 million penalty, which Samsung plans to appeal against on grounds that the jury had miscalculated damages previously and that the methods used for calculation were erroneous.
Moving Forward
Another trial is set to take place on March 31 with a focus on Samsung's newer phones, which, Apple believes, continue to infringe patents due to inconsequential differences from its previous models.
Samsung said in a statement that consumers’ buying decisions hinge upon several features instead of a few software features. Samsung also argued in court that Apple was trying to instill fear and uncertainty among carriers and retailers who would not know which phone to offer and sell due to legal issues.
It seems unlikely that Apple will be able to gain approval for a ban on Samsung’s products after being denied twice already. Moreover, Samsung has come a long way with its products and offerings since the battle started.
While it is true that Apple relies on its patent portfolio which has been one of the smartphone makers’ driving forces, it would be better for the Cupertino-based company to continue to focus more on innovation and introducing new products.
Both the companies are still working with a mediator for an out-of-court settlement while preparing for the March 31 trial.
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