Jury Awards $1 Billion to Apple in Samsung Patent Case

By Nick Wingfield, The New York Times

25 August 12

pple won a decisive victory on Friday in a lawsuit against Samsung, a verdict that will give Apple ammunition in a far-flung patent war with its global competitors in the smartphone business.

The nine jurors in the case, who faced the daunting task of answering more than 700 questions on sometimes highly technical matters, returned a verdict after just three days of deliberations at a federal courthouse in San Jose, Calif. They found that Samsung infringed on a series of Apple's patents on mobile devices, awarding Apple more than $1 billion in damages.

That is not a big financial blow to Samsung, one of the world's largest electronics companies. But the decision could essentially force it and other smartphone makers to redesign their products to be less Apple-like, or risk further legal defeats.

Consumers could end up with some welcome diversity in phone and tablet design - or they may be stuck with devices that manufacturers have clumsily revamped to avoid crossing Apple.

Samsung said it would ask the court to overturn the verdict and, if that is unsuccessful, appeal to a higher court.

The jury found that various Samsung products violated Apple patents covering things like the "bounce back" effect when a user scrolls to the end of a list on the iPhone and iPad, and the pinch-to-zoom gesture that users make when they want to magnify an image. Samsung was also found to have infringed Apple patents covering the physical design of the iPhone.

In its decision on a countersuit by Samsung, the jury added some sting by finding in favor of Apple across the board. Samsung had asked for more than $422 million from Apple, contending it had violated Samsung's patents, but got nothing.

Because Samsung was found to have willfully infringed Apple patents, the judge in the case could grant an Apple request to triple the damages Samsung is required to pay, though lawyers said the size of the initial award made this less likely.

Despite the eye-popping award, one of the largest ever in a patent case, the more important effect of the jury's decision could be the impact it has on Android, the Google operating system used by Samsung and a broad array of other companies in their devices. For every iPhone sold worldwide, more than three smartphones running Android are sold, reflecting the meteoric rise of Google's software.

Apple's suit against Samsung, the world's largest maker of smartphones, has partly been viewed as a proxy war against Google, which Apple executives have derided as a copycat, swiping Apple's innovations. Steven P. Jobs, the late chief executive of Apple, told his biographer that Android was a "stolen product."

Apple is expected to ask the judge in the Samsung case for an injunction preventing Samsung from shipping products that infringe on Apple's patents. The verdict could also bolster Apple's legal attacks on Android devices from other companies.

"It's going to make it very difficult for not only Samsung, but for other companies to mimic the Apple products," said Robert Barr, executive director of the Berkeley Center for Law and Technology at the University of California, Berkeley.

Charles Golvin, an analyst at Forrester Research, said consumers could experience some discomfort in their use of smartphones if Samsung and other manufacturers are forced to design around certain basic functions to avoid violating Apple's patents, though he believes the decision will prod them to innovate. "Consumers will adapt, but there will be some bumps in the road as they make that adaptation," Mr. Golvin said.

The trial provided a rare window into the inner workings of the two companies, especially the highly secretive Apple, forcing them to divulge sales figures, business negotiations and internal memos. Apple executives offered colorful detail, like the way its designers cook up new products around a kitchen table at the company's headquarters.

The evidence Apple presented, including internal Samsung memos and strategy documents, left little doubt that the iPhone inspired a major effort by the Korean manufacturer to overhaul its mobile phones. But a key question throughout the trial was whether the jury would decide that Samsung had stepped over the line by improperly copying Apple's technologies. The members of the jury did not explain their decision before stealthily heading out a side exit.

The verdict in the trial hardly concludes the legal battles over patents among companies in the mobile business. There are dozens of such cases winding their way through the courts; Samsung and Apple have also been battling in Germany, Australia and elsewhere. Even so, Samsung remains a major supplier of components for Apple products.

While the decision is likely to weigh on Samsung shares, it sent Apple's stock up 1.8 percent in after-hours trading. In a statement, Katie Cotton, an Apple spokeswoman, applauded the court for sending a "clear message that stealing isn't right."

"We make these products to delight our customers, not for our competitors to flagrantly copy," she said.

Samsung said in a statement that the decision was a "loss for the American consumer."

"It will lead to fewer choices, less innovation, and potentially higher prices," the company said. "This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple's claims."