In defense, Apple cites calm before storm

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In defense, Apple cites calm before storm

Apple introduced its iPhone in 2007 using Samsung Electronics technology that it didn’t want to pay for, a lawyer representing the Korean electronics company told a U.S. trade judge yesterday.

Samsung contends Apple’s devices, including the iPhone, iPad tablet computer and iPod touch media player, have infringed as many as four patents.

All came from two decades of work by Samsung, the attorney for the company said.

“All of these things that Samsung built up, Apple was using when it entered the market,” Samsung lawyer Charles Verhoeven of Quinn Emanuel said as a trial began yesterday, at the U.S. International Trade Commission in Washington.

“Apple, in 2007, when they decided to enter an industry they’d never been in before, didn’t even inquire if there was a license they needed to take.”

The case before ITC Judge James Gildea, and another patent case by Apple against Samsung that’s in the midst of trial before a different trade judge, are part of a global battle between the two companies for increased share of a market that Bloomberg Industries said was $312 billion last year.

Apple denies infringing the Samsung patents and is challenging their validity, just as Samsung is doing in regard to Apple’s allegations.

Four Years

Apple contends Samsung raised the patent issue in 2010 only after being confronted with claims it was introducing new products that copied the iPhone and iPad, Apple lawyer William Lee of WilmerHale said.

Two of the Samsung patents cover industry standards for the transmission of data and two others are for device features.

“In that three-to-four-year period, Samsung never suggested the patents were infringed by an Apple product,” Lee said.

“For nearly four years, no claims of infringement, and then an infringement problem arose.”

Together, Samsung and Apple made more than 49 percent of all smartphones sold worldwide in the first quarter, with Samsung edging out Apple in that period for the title of world’s biggest manufacturer of the devices, research analyst Gartner said on May 16.

In the tablet market, Apple had 68 percent of the market in the first quarter with Samsung a distant second, analyst IDC said on May 3.

Apple, in a civil suit it filed against Samsung in federal court in California, hopes halt sales of Samsung’s Galaxy Tab until a patent trial can be held.

Complicated Ties

Apple is also Samsung’s biggest customer, as the Korean company supplies chips and displays for the iPhone, iPad and iPod Touch devices.

Apple accounted for 7.64 percent of Samsung’s revenue, according to data compiled by Bloomberg.

“Apple has benefited enormously from the success of the iPhone, iPad and iPod touch, but Apple hasn’t benefited alone,” Lee said.

“Apple has paid Samsung billions of dollars for these components.”

Each is vying to have the other company’s products, which are made in Asia, blocked from entering the U.S. Gildea is scheduled to release his findings in September while Judge Thomas Pender, who is hearing Apple’s claims against Samsung, is set to issue his determination in October.

Part of Apple’s defense is that Samsung is asserting patents covering a data-transmission standard developed by numerous mobile-phone companies.

CEO Meetings

Apple infringes the patents simply by complying with the standard, Verhoeven, the Samsung lawyer, said.

He rejected Apple’s argument that Samsung breached its obligation to license standard-essential patents on fair and reasonable terms.

“My client did make an offer and what did Apple do?” he said before being cut off because the response was considered confidential.

Members of the public were told to leave the room.

The European Union is investigating a complaint by Apple that Samsung misused its patents related to industry standards.

Meetings over the past two years, most recently ones involving Apple Chief Executive Officer Tim Cook and Samsung CEO Choi Gee-sung, have failed to resolve a standoff that spans 10 countries on four continents.

Each side is looking in court for some break, such as an order blocking the rival’s products from the U.S., that would give them an advantage in settlement talks, said Paul Berghoff, a founding partner at McDonnell Boehnen Hulbert & Berghoff based in Chicago who’s been watching the cases.

“Certainly there are some bad feelings here,” Berghoff said before the trials began.

“It’s like a wrestling match. They’re going to roll around and try to choke each other in the gravel for a while and then, most likely, settle. The settlement will be driven by the first party that gets into a position where they have to cry uncle.” Bloomberg
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