U.S. judge slashes award in Samsung-Apple suit

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U.S. judge slashes award in Samsung-Apple suit

The two biggest and most bitter rivals in the smartphone market are headed for another trial after a United States federal judge threw out nearly half of the $1.05 billion in damages a jury awarded Apple for patent infringement by Samsung.

Although the judge lopped 45 percent off the damages, the remaining $550 million is still the largest award ever in a patent infringement dispute, and the ruling does not alter the jury decision that Samsung illegally used Apple technology.

The United States District Judge Lucy Koh issued her verdict Friday and ordered a new trial to reconsider damages related to 14 Samsung products, including some in the hot-selling Galaxy line.

Koh said jurors in the three-week trial last August had not followed her instructions in calculating the amount of damages.

She also concluded that mistakes were made in determining when Apple had first notified Samsung of the alleged violations of patents for its iPhone and iPad.

“We are pleased the court decided to strike $450.5 million from the jury’s award,’’ said Samsung spokeswoman Lauren Restuccia.

Apple declined to comment on Koh’s ruling, which leaves Samsung with a bill of just under $599 million. The judge said the tab will probably increase when the appeals of both companies are resolved.

The jury’s verdict was based on Apple’s estimate of the damages it incurred. Koh, however, said the estimate should have been calculated from time the legal complaint was filed and not when the products were launched, as claimed by Apple.

“There are eight phones for which the jury awarded 40 percent of Samsung’s profits for the entire period, but, for which, during some of the damages period, infringer’s profits were not an authorized remedy,” Koh said in her ruling. The ruling was the second significant victory for the Korean company in Koh’s courtroom since the headline grabbing verdict was announced.

In December, Koh refused to order a sales ban on the products the jury decided had violated Apple’s patents.

She said Apple failed to prove the technology in question is what drove consumers to buy Samsung products instead of iPhones or iPads.

Samsung says only three of the two dozen products found to have infringed on Apple’s patents are still being sold.

Apple filed another lawsuit last year accusing Samsung’s newer line of products of continuing to use Apple-patented technology. Koh has scheduled a trial in that case for early next year and implored both companies on several occasions to settle their differences.

Apple filed its patent infringement lawsuit in April 2011 and engaged legions of the country’s highest-paid patent lawyers to demand $2.5 billion in damages. Samsung Electronics fired back with its own lawsuit seeking $399 million. The jury found that several Samsung products illegally used such Apple creations as the “bounce-back’’ feature when a user scrolls to the end of an image and the ability to zoom text with the tap of a finger.

Samsung has mounted an aggressive post-trial attack on the verdict, raising a number of legal issues that allege the Korean company was treated unfairly in a federal courtroom located only a dozen miles from Apple’s Cupertino headquarters. Samsung also claims some of Apple’s patents shouldn’t have been awarded in the first place.

Although the downsized damage payment is a relief for Samsung, it is still a record amount for a patent dispute would adversely affect the company’s profitability if included in its first-quarter performance.

The remaining damage award is equivalent to nearly a tenth of the operating profit of Samsung Electronics’ mobile and IT business, which amounted to 5.4 trillion won ($5 billion) in the fourth quarter last year.

Furthermore, Apple is seeking more damages and Samsung a complete dismissal of the case in the U.S. Court of Appeals for the Federal Circuit, the Washington-based court that handles all patent appeals.

The new trial to recalculate damages could also increase the award.

Additionally the Korean tech giant still has to clear its reputation as a copycat especially since Koh didn’t toss out the jurors’ underlying finding that two dozen Samsung products infringed patents Apple used to develop its iPads and iPhones.

Samsung has emerged as one of Apple’s biggest rivals and has overtaken it as the leading smartphone maker.

According to Strategy Analytics, Samsung Electronics’ smartphone global market share exceeded 30 percent for the first time. Its global market share expanded 10.5 percentage points from 19.9 percent in 2011 to 30.4 percent last year. The Korean company widened its lead over the world’s second-largest smartphone manufacturer Apple, whose market share last year amounted to 19.4 percent, which grew slightly from 19 percent the previous year.

Yet the company’s products are often criticized for slavishly copying Apple designs and technology. Even the jurors last year accused the company of “willfully” infringing on Apple’s patents.

Additionally, Apple turned out to be regaining its past glory at an alarming rate. Apple has the top spot in sales of smartphones that offer LTE services. Strategy Analytics reported in the fourth quarter last year that Apple led the market by selling 27.4 million smartphones with LTE service; outnumbering Samsung, which sold 11.6 million. Apple accounted for 54 percent of the global market. This is particularly alarming since Apple’s iPhone 5 is the only smartphone that offers LTE; Samsung offers several models.

Currently, Apple and Samsung have similar lawsuits in Korea, Germany, Japan, Italy, the Netherlands, Britain, France and Australia.

By Lee Ho-jeong, AP [ojlee82@joongang.co.kr]
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