Jury Awards Apple $1.05 Billion In California Patent Dispute

Jury Awards Apple $1.05 Billion In California Patent Dispute

SAN FRANCISCO - (Mealeys) After three days of deliberations, a California federal jury on Friday awarded Apple Inc. $1,049,343,540 in its high-stakes lawsuit with Samsung Electronics Co. Ltd., deeming the software giant's patents both valid and infringed (Apple Inc. v. Samsung Electronics Co. Ltd., No. 11-1846, N.D. Calif.; See 8/20/12, Page 12).

(Amended verdict available.  Document #16-120904-007V.)

Jurors empanelled before U.S. Judge Lucy H. Koh of the Northern District of California also sided with Apple on the question of the plaintiff's registered trade dress, finding that Samsung copied and ultimately diluted the look and feel of Apple's popular iPhone with Samsung products like the Galaxy Prevail and Nexus S 4G. 

By contrast, Samsung's counterclaims of patent infringement failed to sway the nine-member jury, which rejected each count levied at Apple by its South Korean competitor.

User Interface

Although Apple emerged from the three-week trial the clear victor, it indicated in filings before Judge Koh that it would seek $2.5 billion in damages from Samsung, which it had called "one of the principal imitators" of "innovative technology" in an April 2011 complaint.  According to Apple, Samsung and two of its American subsidiaries (Samsung, collectively) infringed eight utility patents and seven design patents.  Apple additionally claimed that Samsung is liable for trade dress infringement in connection with its product packaging and trademark infringement related to various icons "used in the user interface in the iPhone, iPod touch and iPad products."

Samsung filed counterclaims alleging that Apple infringed 12 of its patents, including some related to the Universal Mobile Telecommunications Standard (UMTS).  Apple filed answering counterclaims alleging that Samsung violated both federal and California antitrust laws and California Business and Professions Code Section 17200, which is the state's unfair competition law.  Apple alleges that Samsung defrauded the European Telecommunications Standards Institute, one of the standard-setting organizations that set the UMTS standards, by inducing it to adopt Samsung's "declared-essential patents" and then later refusing to license them under "fair, reasonable, and non-discriminatory terms" (FRAND terms).

Following various pretrial rulings, the case presented to the jury was whittled down to seven Apple patents and five Samsung patents, along with Apple's allegations of trade dress infringement and antitrust violations.  Trial began July 31 and ended with closing arguments Aug. 21; jurors began their deliberations Aug. 22.

Zoom, Bounce Features

According to the verdict, all 19 Samsung products accused of infringing claim 19 of Apple's U.S. patent No. 7,469,381 do, in fact, infringe.  The claim relates to a "bounce-back" or "rubber-banding" feature, whereby a user scrolling through a series of images will bounce back upon reaching the last image.  Regarding claim 8 of Apple's U.S. patent No. 7,844,915 - which relates to a pinch-to-zoom feature - jurors found that although Samsung's Galaxy Ace, Intercept and Replenish devices do not infringe, 21 other Samsung products do. 

Furthermore, the Droid Charge, Galaxy S 4G, Mesmerize and 16 other Samsung devices infringe the "double tap" feature embodied in claim 50 of Apple's U.S. patent No. 7,864,163, jurors held.  Additionally, the jury concluded that Samsung should have known it was inducing infringement by others with regard to all accused products and the '381, '915 and '163 patents and that Samsung's infringement of the same three utility patents was willful.

The jury reached similar findings of liability with regard to Apple's asserted design patents D'677, D'087 and D'305 and D'889, which relate to the front face of an electronic device, the ornamental design of a smartphone and the use of rounded square icons.

All seven Apple patents at issue in the case were upheld as valid. 

Sherman, Lanham Acts

Turning to Apple's Lanham Act claims, jurors deemed Apple's registered trade dress valid, famous and diluted by Samsung products like the Galaxy S, Fascinate and Vibrant.  Furthermore, Samsung's infringement of Apple's registered trade dress was willful, the jury later found. 

Samsung prevailed with regard to Apple's unregistered trade dress for the iPad and "combination" iPhone designs, however, with jurors finding that the claimed features are not entitled to protection.  In other success for Samsung, a fourth Apple design patent - D'889 - was deemed noninfringed by accused Samsung products Galaxy Tab 10.1 WiFi and Galaxy Tab 10.1 4G Lite.  Additionally, while the jury rejected Samsung's claim of infringement by Apple, it upheld the validity of Samsung's patents while also rejecting Apple's claim that the defendant violated Section 2 of the Sherman Act by monopolizing certain technology markets related to the UMTS standard.

In assessing damages, the jury's award ranged from a high of $143,539,179 for Samsung's Fascinate product to a low of $833,076 for Samsung's Galaxy Tab 10.1.  Just five of 28 total accused products did not result in an award for Apple, according to an amended verdict.

Law 'Manipulated'

In a statement, Samsung called the jury's findings a "loss for the American consumer" and warned that "this is not the final word in this case."

"It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies.  Consumers have the right to choices, and they know what they are buying when they purchase Samsung products.  . . .  Samsung will continue to innovate and offer choices for the consumer," Samsung maintains.

Counsel

Apple is represented by Harold J. McElhinny, Michael A. Jacobs and Richard S.J. Hung of Morrison & Foerster in San Francisco, William F. Lee of Wilmer Cutler Pickering Hale and Dorr in Boston and Mark D. Selwyn of Wilmer Cutler in Palo Alto, Calif.

Charles K. Verhoeven of Quinn Emanuel Urquhart Oliver & Sullivan in San Francisco, Kevin P.B. Johnson and Victoria F. Maroulis of Quinn Emanuel in Redwood Shores, Calif., and Michael T. Zeller of Quinn Emanuel in Los Angeles represent Samsung.

[Editor's Note:  Lexis subscribers may download the document using the link above. The document(s) are also available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.]

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