NextBigWhat brings you curated insights and wisdom on product and growth from the wild web.

Over 2 million people receive our weekly curated insights.

Newsletter

Newsletter

Apple vs. Samsung: The story so far [Full Recap]

Over the last three and a half weeks two of the major giants of the tech world, Apple and Samsung, have been locked in a fierce legal brawl over whether each company had infringed on the other’s patents. The deliberations came to an end yesterday with a verdict clearly in favor of Apple, wherein the Cupertino based company was awarded damages in the amount of $1,049,393,540 whilst Samsung walked away penniless in its countersuit. Here is how it all went down:

Apple’s Case

The central theme of Apple’s case lay in their statement that it took more than 5 years of hard work to manufacture a device like the iPhone which Samsung blatantly copied in 3 months. Their first witness, industrial designer Christopher Stringer, was instrumental in painting an emotional picture of the design process involved with producing the phone. Apple also called upon Phil Schiller to highlight their marketing strategy and the expenses they incurred whilst executing it. They argued that by copying the iPhone’s trade dress, Samsung indirectly mooched off Apple’s marketing effort thus diluting it.

During their case, Apple introduced a piece of highly damning evidence in the form of a 132 page internal document, made by Samsung, that consisted of a comparative analysis of the iPhone and the Galaxy S. The document basically highlighted the features of the iPhone that Samsung deemed worth copying and was central in showing the intent to copy on their part. Another significant piece of evidence was a document detailing Samsung’s phones before and after the iPhone and how its launch had influenced the company. Most phones that Samsung released after the iPhone’s launch resembled it in some way or the other. All in all, Apple claimed to have suffered the loss of up to 2 million iPhone and iPad sales due to Samsung’s incessant copying of their products, for which they asked for an estimated $2.75 Billion in damages.

Samsung’s case

Samsung secured a minor victory right at the beginning of their half of the proceedings by making Judge Lucy Koh exclude the international versions of the Galaxy S, SII and Ace from the trial, as neither device had been sold in the United States. In fact, Samsung pleaded the Judge to declare Samsung the winner as in their opinion, Apple had not presented a strong case. An appeal that fell by the wayside.

On the other hand, Samsung argued their case by stating that prior art existed for most of Apple’s patents; rendering them invalid. For that purpose they introduced products named DiamondTouch and LaunchTile as evidence. The former was a huge touchscreen enabled surface from 2001 that included applications for manipulating images with multiple fingers as well as effects similar to the bounce-back component of Apple’s ‘381 patent. The latter was a UI paradigm for smartphones developed in 2004, which also featured a bounce-back component similar to that of Apple’s. However, none of the two devices were able to successfully replicate the exact nuances of Apple’s technology, as showing empty space behind the content being “bounced” was a major part of their patent.

Samsung argued that their designers worked just as hard while designing the Galaxy S and one of their witnesses, Jeeyuen Wang, claimed that he did not sleep nights while designing the phone and that they did not copy the iPhone. They further claimed that the iPhone and iPad designs are far too generic, hence Apple’s patents related to them were invalid and far too broad.

Samsung also went on the offensive regarding three utility patents as well as two standards-essential patents. Their utility patents included the ‘893(remembering your position in the gallery app even if you close it to shoot another picture), the ‘460(transmitting and receiving images in emails) and the ‘711(playing music in the background while doing other tasks). However, Apple’s attorney was able to discredit these claims by asking the Samsung witness in question, Dr. Woodward Yang, which of Samsung’s devices utilised these patents. A question he was not able to answer as Samsung had not listed any devices in the trial documents. As far as the standards-essential patents were concerned, Apple had been licensing their baseband processor from Intel, which already paid Samsung for utilizing them, hence Apple was able to defend against these claims. Samsung finally rested its case after making a demand for $421.8 Million as damages.apple-samsung-lawsuit

The Verdict

Apple and Samsung then rebutted each other’s arguments with their final closing testimonies and the jury went into deliberation. After a deliberation period of a mere 21 hours, the jury decided the case highly in favour of Apple. They decided to award Apple $1,051,855,000 in damages, an amount which was reduced to $1.049 Billion after an appeal by Samsung. Samsung was found guilty of willfully infringing upon all of Apple’s patents in one device or another, while Apple walked away scot-free. Still, as a small ray of hope for Samsung, the Galaxy Tab line was found innocent of breaching iPad IP.

What now?

In the short term, both companies are preparing for an injunction hearing on 20th September, which shall decide which of Samsung’s devices still being sold must be banned. In the long term, such a clear victory for Apple has the potential to completely blow up the mobile market as we know it. This is no mere win against Samsung but a resounding shot across the bow of Android as a whole. It has proven that Apple’s patents, no matter how broad the public thinks they are, hold up quite well in court and it might lead to a certain level of fear in the hearts of Android OEMs. Remember, Google has never taken responsibility for its manufacturers’ actions, but there is one software giant out there that is willing to bear legal costs: Microsoft. Not only that, but Microsoft also has an age old cross-licensing agreement with Apple, so as far as litigation goes, Microsoft seems like a veritable safe haven right now.

Microsoft themselves acknowledged the fact, as their leader for Windows Phone marketing Bill Cox tweeted right after the verdict was out*

“Windows Phone is looking gooooood right now”

Windows Phone’s rise as an Operating System has the potential to be catalysed by this verdict as does the fall of Android, if OEMs start moving away in front of the threat of Apple.

* Some discrepancies have been brought up in the process of jury decision making which may force Judge to toss the decision out and the trial may begin afresh.

On the other hand, Google can step into the fray and finally make a licensing deal with Apple. Microsoft already reaps the benefits of such a deal and earns more from Android sales than from Windows Phone itself. But that too seems to have its risks. If licensing costs for Android increase to such a huge extent, OEMs may not find it financially viable to support Android, or they might drive the cost of phones upwards.

Both scenarios seem to be detrimental for the consumers. Either competition in the marketplace suffers or the prices get driven up. All said and done, this might be a revolutionary twist in the tale as far as the mobile market is concerned. Apple has played its move and shown its cards. It is now up to Google to challenge them, or raise the stakes.

[Guest article contributed by Harishit Passi.]

Add comment