Samsung loses court battle, but winning the market war

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Samsung loses court battle, but winning the market war


Apple once again emerged as the victor against Samsung in one of the world’s most attention-grabbing patent disputes.

Although the jury once again favored the U.S. smartphone maker, some market experts say yesterday’s verdict will not make much of an impact on the Korean company’s bottom line or brand image.

“Samsung’s brand image could be hurt if this verdict continues to linger in the back of consumers’ minds when they make a purchase,” said Park Kang, analyst at Daishin Securities. “However, if Samsung continues to develop innovative products, that could completely offset such patent disputes and the damages inflicted by yesterday’s ruling won’t matter.”

The analyst added that Samsung products have moved well beyond the technologies in the patent dispute that began in April 2011.

On Thursday, a jury of six women and two men awarded Apple more than $290 million in a do-over damages trial.

According to Bloomberg, it was the largest jury award this year in a patent case and the fifth-largest overall. Adding to the $640 million from a verdict a year ago, Samsung must pay a total of $930 million.

Last year, a jury awarded Apple $1.05 billion for patent infringement by 26 Samsung products. In March, however, Judge Lucy Koh disallowed $410 million from the verdict in March, citing a miscalculation by jurors on 13 Samsung devices. Apple since then has sought to restore $380 million of the amount that was cut, while Samsung proposed paying $52 million.

After the verdict was announced , Samsung sent an e-mail saying it will appeal the decision.

“We are disappointed by today’s decision, which is based in large part on a patent that the U.S. Patent and Trademark Office recently deemed invalid,” Samsung said.

“While we move forward with our post-trial motions and appeals, we will continue to innovate with groundbreaking technologies and great products that are loved by our many customers around the world.”

In question is the “pinch-to-zoom” that allows users to enlarge or downsize text and images by spreading their fingers.

The U.S. patent office on Wednesday said it respectfully disagreed with Apple’s claim involving the pinch-to-zoom patent No. 7,844,915.

Samsung attorneys immediately moved to halt the retrial, which was dismissed, and the jury voted in favor of Apple.

However, Samsung Electronics shares hardly moved and closed 0.69 percent higher at 1.45 million won ($1,367).

“The negative sentiment was all factored in when Apple won $1.05 billion against Samsung last year,” said Lee Seung-woo, IBK Securities analyst. “The Samsung-Apple patent issue has been going on for some time, I don’t expect the verdict will have an impact on sales of Samsung products or on the company’s image.”

Market experts are near certain that a company as large as Samsung most likely has stashed away money to cover any judgment against it in court.

Even if Samsung pays Apple, the world’s largest smartphone maker is expected to post another record operating profit in the fourth quarter.

The market is looking at a 10.5 trillion won operating profit for the fourth quarter.

Samsung announced a 10.1 trillion won operating profit in the third quarter, a first for Korean companies.

Furthermore, the technologies that reportedly have been considered of infringing Apple’s patents - including pinch-to-zoom technology - are no longer used in Samsung’s latest phone.

Since the legal dispute started, Samsung has been developing technologies to differentiate its products from those of its rival.

This has resulted in creating different types of smartphones such as the smartwatch and curved models.

Samsung also has the upper hand against Apple in the global market share. As of the third quarter, Samsung has more than 31 percent of the smartphone market compared to 13 percent for Apple.

In addition, some are concerned that Apple used an emotional tactic, reaching out to patriotism rather than arguing the technology itself.

In court, Apple’s lawyers talked about how U.S. TV manufacturers are no longer in business while turning on videos of the late Steve Jobs.

“The verdict at the court in California seems to be a continuum of what seems to be a protectionist movement in the United States,” said an analyst at a local brokerage firm.

U.S. President Barack Obama earlier this year did not veto an import ban on older Samsung models, which some considered a protectionist move.

Judge Koh is expected to preside over another trial between the two companies in March that will address the companies’ latest models - the iPhone 5 and the Galaxy S3.

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