Apple Wins Ruling to Force Samsung to Change Products
Bloomberg reports: Apple Inc. won an appeals court ruling that may force Samsung Electronics Co. to stop using some features in its smartphones and tablets.
A U.S. appeals court said Apple was entitled to a narrow order that prevents the Samsung from using Apple’s slide-to-unlock, autocorrect and quicklinks features. To rule otherwise would eliminate patent rights of inventors of certain features in multicomponent devices, the U.S. Court of Appeals for the Federal Circuit in Washington said in an opinion posted on its electronic docket.
The decision could have far-reaching consequences in how disputes are resolved when it comes to complex devices, and help patent owners limit copying by rivals. The ability to block use of an invention is a powerful tool that increases the price tag when negotiating settlements.
“It’s an important precedent for Apple and any company that seeks to protect product differentiation,” said Nick Rodelli, who heads CFRA Legal Edge, a New York-based forensic accounting and legal research firm. “This broadens their moat here in the U.S. and makes it more difficult for new entrants to come into the U.S. market and rip off Apple’s features.”
For Apple, it gives the iPhone maker additional firepower when it comes to resolving this four-year-old dispute with its biggest rival. A past Apple settlement with HTC Corp. included a “no cloning” provision that ensured HTC’s phones didn’t look too similar to the iPhone, and the ruling Thursday helps do the same to other mobile phone makers, like China’s Xiaomi Corp., that want to enter the U.S. market.
Apple won a $119.6 million jury verdict in May 2014 from Samsung who were found to have infringed its patents for the slide-to-unlock, autocorrect and quicklinks features. Even so, the trial judge declined to issue an order forcing Samsung to remove those features from its mobile phones, saying monetary damages would be adequate.
Apple argued that, if it weren’t able to control use of its inventions, it may lose market share and its reputation as an innovator.
“The right to exclude competitors from using one’s property rights is important,” the Federal Circuit ruled in a 2-1 decision. “And the right to maintain exclusivity — a hallmark and crucial guarantee of patent rights deriving from the Constitution itself -— is likewise important.”
Google Inc,no great surprise, HTC, LG Electronics and Rackspace Hosting Inc. were among the companies backing Samsung in its arguments. They argued in a filing with the court that a victory for Apple could allow a patent owner “to unfairly leverage its patent for competitive gain.”
The specific features had an impact on customer decisions to buy products, and that should be considered when determining whether to block use of an invention, the court said.
Samsung told the appeals court in March that none of its current models use two of the patents, and only a single product still has the autolink feature, so there’s no hardship on it, the court ruled.
“The public generally does not benefit when that competition comes at the expense of a patentee’s investment-backed property right,” Circuit Judge Kimberly Moore wrote for the majority. “This is not a case where the public would be deprived of Samsung’s products. Apple does not seek to enjoin the sale of lifesaving drugs, but to prevent Samsung from profiting from the unauthorized use of infringing features in its phones and tablets.”
Samsung is appealing the underlying infringement verdict as well; that case is pending before the Federal Circuit.
Apple won an earlier case against Samsung over the design of the iPhone which it said was copied. The Federal Circuit in May upheld $548 million worth of damages in that case. A partial trial must be held to determine the exact amount. In a Sept. 11 filing with the court in San Francisco, both sides said they were willing to work with a mediator to resolve the case, with Apple going so far as to suggest binding arbitration.
The case ruled on today is Apple Inc. v. Samsung Electronics Inc., 14-1802, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Apple v. Samsung, 12cv630, U.S. District Court for the Northern District of California (San Jose).
Reuters Reuters reports that a federal judge has thrown out a $532.9 million award against Apple Inc and ordered a new trial on damages, in a case where a jury found that the iPhone maker’s iTunes software infringed three patents owned by a Texas company.
In a decision on Tuesday, U.S. District Judge Rodney Gilstrap in Tyler, Texas, said jurors who on Feb. 24 awarded the damages to Smartflash LLC because of Apple’s willful infringement might have been confused by his instructions on how to properly calculate royalties.
Apple had argued that the damages were too high because jurors might have improperly considered the entire market value of the products, rather than distinguishing between patented and unpatented features.
Gilstrap said his jury instructions were legally correct but not applicable to the facts of the case, and “may have created a skewed damages horizon for the jury.”
He set a new trial only on the issue of damages for Sept. 14 in Tyler, where Smartflash is based.
Bradley Caldwell, a lawyer for Smartflash, did not immediately respond on Wednesday to requests for comment.
Apple declined to comment on Gilstrap’s decision, but said the case showed why Congress should try to curb litigation by Smartflash and similar companies whose business models depend in part on lawsuits to enforce their patents.
“We refused to pay off this company for the ideas our employees spent years innovating,” Apple said.
Shares of Apple were down 1.9 percent at $123.36 in afternoon Nasdaq trading.
Smartflash accused Apple in a May 2013 lawsuit of infringing patents for accessing and storing songs, videos and games, enabling the Cupertino, California-based company to sell more of its iPhone, iPad and iPod Touch products.
The lawsuit said Patrick Racz, a co-inventor of Smartflash’s patents, had discussed some of his ideas in 2000 with officials of a European company, including Augustin Farrugia, who later became a senior director at Apple.
Smartflash originally sought damages of $852 million.
The trial took place in the federal court for the Eastern District of Texas, a favorite for lawyers representing patent holders because of its reputation for high damages awards.
The case is Smartflash LLC et al v. Apple Inc et al, U.S. District Court, Eastern District of Texas, No. 13-00447.
The sale of patents owned by the Rockstar Consortium of companies could bring a windfall of $392 million in additional cash to Apple’s March quarter, estimates from one analyst predict.
Apple originally paid the lion’s share for a series of patents purchased by the companies acquired from Nortel. The iPhone maker accounted for 58 percent, or $2.6 billion, of the $4.5 billion that was spent as part of the deal.
RPX completed the purchase of Rockstar for $900 million earlier this year, shedding 4,000 patents and ending ongoing lawsuits in the wireless industry. Following the sale, consortium member BlackBerry reported a gain of $115 million, and the Canadian smartphone maker originally paid $770 million — or 17 percent — of the original purchase.
Using these figures as a baseline, analyst Maynard Um of Wells Fargo calculated that Apple could see a gain of about $392 million in the March quarter. That would equate to about 5 cents in the company’s earnings per share, he said.
Um also sees the sale of the Rockstar patents as an indication of a less litigious wireless industry, which he sees as a positive for everyone involved. Previously, mobile companies were engaged in a broad series of lawsuits that spanned across the globe.
Exactly how much Apple made from the Rockstar patent sale will likely be revealed on 27th April when the Apple is scheduled to reveal the results of its second fiscal quarter of 2015.
Hot on the heels of losing a lawsuit yesterday with a $530 million payout to Smart Flash LLC, Apple has been hit with additional lawsuits from Smart Flash and from Ericsson.
Apple has just been ordered to pay $532.9 million after a federal jury in Texas found that its iTunes software infringed three patents owned by patent licensing firm Smartflash LLC.
Though Smartflash had been asking for $852 million in damages, Tuesday night’s verdict was still a blow to Apple.
The jury, which deliberated for eight hours, determined Apple had not only used Smartflash’s patents without permission, but did so willfully.
Apple, which said it would appeal, said the outcome was another reason reform was needed in the patent system to curb litigation by companies that don’t make products themselves. These non practixing enterties are sometimes refered to as Trolls.
“We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system,” Apple said in a statement.
Smartflash sued Apple in May 2013, alleging its iTunes software infringed its patents related to accessing and storing downloaded songs, videos and games.
“Smartflash is very happy with the jury’s verdict, which recognizes Apple’s longstanding willful infringement,” Brad Caldwell, a lawyer for Smartflash, said in an email. – No surprise here as $500 big ones should make him verry happy.
The trial was held in Tyler, which over the past decade has become a focus for patent litigation and which happens to be the home of Smart Flash’s office.
It was also in Tyler federal court that a jury in 2012 ordered Apple to pay $368 million to VirnetX Inc for patent infringement. A federal appeals court later threw out that damages figure, saying it was wrongly calculated.
Apple tried to avoid a trial by having the lawsuit thrown out. But U.S. District Judge Rodney Gilstrap, who presided over the case, ruled earlier this month that Smartflash’s technology was not too basic to deserve the patents.
Apple had asked the jury to find Smartflash’s patents invalid because previously patented inventions covered the same technology.
Ericsson on Friday announced that it will sue Apple in the U.S., claiming Apple infringed 41 of its patents including both standards essential and other non standards essential but critical implementation patents such as the design of semiconductor components, user interface software, location services and applications, as well as the iOS operating system.
In a report published today, JP Morgan analyst Rod Hall discussed Apple latest lawsuit initiated by Ericsson for patent infringement.
Hall noted that Ericsson filed a suit in January to let the court determine if its patents licensing offer to Apple complied with the fair, reasonable and non-discriminatory (FRAND) licensing terms. Apple refused the offer to let the courts decide, resulting in Ericsson now suing Apple and requesting an exclusion order against Apple’s products for infringing on its patents.
Hall further explained that “Apple had also filed a lawsuit in the US to seek judgments that few LTE patents declared essential by Ericsson are, in fact, not essential and not infringed by Apple; and ii) if these LTE patents are infringed by Apple to determine an appropriate royalty base and royalty rate.”
What happens now?
Despite the filing of mutual lawsuits, Hall wrote that Ericsson and Apple were negotiating with each other, but talks have broken down.
Hall speculated that Apple’s filed suit was intended to invalidate some 4G patents held by Ericsson and that Apple chose the “weakest patents” to get some negotiating leverage over Ericsson. On the other hand, Ericsson used its “strongest patents” to make sure it receives an exclusion order which would force Apple to negotiate.
“Ericsson has a very strong wireless patent portfolio and we believe it is impossible for Apple to overturn the validity of their key patents,” Hall argued. “Apple’s strategy would be to seek to reduce the royalty Ericsson is demanding which is likely a difficult task because Ericsson likely does not use Apple innovations which could have resulted in a lower royalty fee if both companies signed a cross licensing agreement.”
Hall concluded there is a potential upside to Ericsson’s IPR licensing revenue if it prevails in the lawsuit. Under a “worst case” scenario, the analyst stated that Ericsson will get the same royalties from Apple that it got in its expired licensing deal.
The latest court battle between Apple and Samsung continues, with Samsung appealing against the $930M it was ordered to pay Apple for patent infringement. Samsung is arguing that the amount awarded was “excessive and unwarranted.”
It’s of course not the first time that the sum awarded has been disputed. Apple was initially awarded $1B in damages, with $450M of that later cut and a retrial required to determine a revised sum. The retrial awarded Apple $290M instead for that element of the case, giving Apple a revised total award of $930M … Confused?
An appeals court is due Thursday to hear arguments from both sides in Samsung’s appeal of the verdict from the first Apple-Samsung case. Samsung argues that much, if not all, of that amount should be thrown out, saying the verdict was excessive and unwarranted.
Apple, for its part, says most of the issues Samsung raises are factual matters for the trial courts rather than legal questions worthy of appellate review.
“Samsung seeks to belittle Apple’s intellectual property rights and particularly Apple’s design patents, though it tellingly does not challenge the design patents’ validity,” Apple writes in its brief in the case. “Samsung also tries to downplay the extent of its mimicry, but overwhelming evidence demonstrated that Samsung faced a ‘crisis of design’ and addressed it with shameless copying.”
Both sides have also lined up “friend of the court” filings from various third parties that agree with their position.
A brief was filed by 27 law professors on Samsung’s behalf, while Apple’s position has the backing of companies such as Oakley, Kohler and Novo Nordisk — which endorse strong design patent protections — as well as various designers and design educators.
Of course, this is just one of the many legal battles between the two companies. Apple V Samsung / Android continues.
More news on the smart phone patent wars.
Nvidia the graphics company just attacked Samsung and Qualcomm over GPU patents. It also wants Galaxy sales blocked.
Nvidia has sued Samsung and Qualcomm for allegedly infringing seven of its patents related to GPUs, and is trying to block the sale of some Samsung products in the U.S.
The lawsuits open a new and unexpected front in the smartphone patent wars, which have already led to numerous court battles. In a blog post Thursday, Nvidia called it an “important day” for the company and said they are the first patent lawsuits it has initiated in its 21-year history.
Nvidia filed the complaints with the U.S. International Trade Commission (ITC) and at the U.S. District Court in Delaware. It has asked the ITC to block shipments of Galaxy phones and tablets that contain Qualcomm’s Adreno, ARM’s Mali and Imagination’s PowerVR graphics architectures.
It has also asked the Delaware court to award it unspecified monetary damages.
“Without licensing Nvidia’s patented GPU technology, Samsung and Qualcomm have chosen to deploy our IP without proper compensation to us,” Nvidia said in the blog post.
Samsung declined to comment on the lawsuits, said spokeswoman Lauren Restuccia, and Qualcomm did not immediately reply to a request for comment.
“Instead of developing its own graphics processing technology, Samsung purchases and uses Qualcomm’s infringing processors and GPUs, as well as other processors and GPUs that infringe the claims of the asserted patents,” Nvidia said in its Delaware complaint.
Nvidia said it tried to negotiate a license for its patents with Samsung, and that Samsung “repeatedly said that this was mostly their suppliers’ problem.”
The GPU maker claims seven of its patents have been infringed.
“Those patents include our foundational invention, the GPU, which puts onto a single chip all the functions necessary to process graphics and light up screens; our invention of programmable shading, which allows non-experts to program sophisticated graphics; our invention of unified shaders, which allow every processing unit in the GPU to be used for different purposes; and our invention of multithreaded parallel processing in GPUs, which enables processing to occur concurrently on separate threads while accessing the same memory and other resources.”
In the ITU complaint, Nvidia says the accused Samsung products use processors that incorporate three GPU architectures—Qualcomm’s Adreno, ARM’s Mali and Imagination’s PowerVR.
“Adreno GPUs are used in Qualcomm’s processors and chipsets. Other processors and chipsets used in Samsung’s accused products, including Samsung’s Exynos processors, use Mali GPUs or PowerVR GPUs,” Nvidia says in its complaint.
“Products using any one of these three types of GPUs infringe the asserted patents,” it says.
Samsung has had plenty of patent battles with Apple related to unlicensed technology in the Galaxy Smart Phone and other products. In August 2012 a California jury awarded Apple close to $1 billion in damages after they fond Samsung guilty of infringing Apple designs and software.
A U.S. judge rejected Apple Inc’s latest bid for a permanent injunction against Samsung in another sign of the diminishing impact of the smartphone patent wars.
Apple won a $120 million jury verdict against Samsung earlier this year over three Apple patents. However, U.S. District Judge Lucy Koh in San Jose, California, on Wednesday denied Apple’s request to stop Samsung from selling infringing features on its smartphones related to those patents.
An Apple spokeswoman declined to comment. In a statement, Samsung said it welcomed the ruling. “We remain committed to providing American consumers with a wide choice of innovative products,” Samsung said.
Until this year, the two leaders in mobile technology had been engaged in global patent litigation over Samsung’s phones that use Google’s Android operating system. However, Apple and Samsung agreed earlier this month to drop all patent lawsuits outside the United States.
In her ruling on Monday, Koh ruled that Apple’s reputation as an innovator “has proved extremely robust” despite Samsung’s patent infringement.
“Apple has not demonstrated that it will suffer irreparable harm to its reputation or goodwill as an innovator without an injunction,” Koh wrote.
Samsung is still appealing the result of a blockbuster 2012 trial over a separate batch of patents, with Samsung seeking to undo $930 million in damages. And while Apple says those damages should stand, the iPhone maker is no longer asking an appeals court to revive its bid for a permanent sales ban against several older Samsung phones.
The legal battles drone on in the US while for the moment non US battles are in a truce. The real results will be found in the sales volumes of iPhone and Galaxy products. With an iPhone 6 announcement pending this could impact global volumes.
Apple Inc and Samsung Electronics Co Ltd have been litigating around the world for three years. Jurors awarded the iPhone maker about $930 million after a 2012 trial in San Jose, California, but Apple failed to persuade U.S. District Judge Lucy Koh to issue a permanent injunction against the sale of Samsung phones.
The current case involves five Apple patents that were not in the 2012 trial and which cover iPhone features like slide to unlock and search technology. Apple is again seeking to ban sales of several Samsung phones, including the Galaxy S III, as well as roughly $2 billion in damages.
Apple has vastly exaggerated the importance of its patented iPhone features, a Samsung attorney said on Tuesday as the two companies delivered closing arguments to jurors after a month-long trial over mobile technology.
Apple, however, argued that the South Korean company could not have competed in the smartphone market without unfairly copying its flagship product. The two tech leaders also sparred over how Google’s work on the software used in Samsung phones affects Apple’s patent claims.
Samsung also claims Apple violated two patents on streaming video. It is seeking to ban the iPhone 5, and asserted a $6 million damages claim.
In court on Tuesday, Samsung attorney William Price said some of Apple’s patented technology in the case was never even incorporated into the iPhone. That undermines Cupertino, California-based Apple’s claim for billions in damages.
Another Samsung attorney, John Quinn, suggested that Apple devised its $2 billion request to artificially inflate the value of the technology in the case and confuse the jury.
“They’ll be dancing in the streets in Cupertino if you give them 100 million,” Quinn said.
But Apple attorney Harold McElhinny said Samsung’s copying of Apple technology has greatly harmed the iPhone maker and turned the smartphone market into a two horse race.
“Unlike in fairly tales, we know that Samsung’s illegal strategy has been wildly successful,” McElhinny said.
Additionally, Apple attorney William Lee said Samsung’s low damages request on its own patents was meant to cheapen intellectual property in general. Samsung paid its expert witnesses about $5 million in fees in order to seek $6 million in damages, Lee said.
“Does that make sense?” Lee said. “Only in one circumstance: if you’re trying to devalue patents, all patents.”
Samsung’s phones run on the Android mobile operating system developed by Google Inc. Google is not a defendant in the case, but during the trial Samsung pointed out that some of the features Apple claims to own were actually invented by Google. Samsung called a handful of Google executives to testify on its behalf.
McElhinny said the fact that Google developed Android is irrelevant to Apple’s ability to collect damages from Samsung. Google agreed to reimburse Samsung for some of those costs, he said.
“At the end of the day Google will not be an issue for you,” McElhinny said.
However, Samsung’s Quinn said Apple sued Samsung because the iPhone maker did not want to fight Google, another iconic Silicon Valley company, “in our backyard.”
The jury began deliberating on Tuesday and a verdict could be reached at any time. If either company proves patent infringement, they could then ask Koh to order a sales ban.
The case in U.S. District Court, Northern District of California is Apple Inc vs. Samsung Electronics Co Ltd, 12-630.
Update – From San Jose Wednesday 30th April
SAN JOSE — A federal jury did not reach a verdict Wednesday in the multibillion-dollar patent feud between Apple and Samsung, but it sent several cryptic notes seeking more evidence, including what late Apple CEO Steve Jobs may have said about suing his rivals.
The eight-member jury will resume deliberating Thursday morning as it weighs Apple’s claims that Samsung violated five patents in iPhone and iPad technology and should pay $2.2 billion in damages.
During the course of Wednesday’s deliberations, the jury delivered five notes seeking clarification from U.S. District Judge Lucy Koh. Among other questions, the jury wanted to know if there was more evidence about what Jobs said “at the moment” Apple decided to sue Samsung or about suing Google, whose Android technology runs the Samsung phones at issue in the trial.
On the seemingly never ending global patent wars a US court ruled the Apple didn’t infringe a patent owned by Google’s Motorola Mobility unit over mobile-phone technology reports Reuters.
The ruling, posted on the website of the U.S. Court of Appeals for the Federal Circuit in Washington, affirms a victory Apple won that ensured there would be no disruption to U.S. imports of its iPhone.
Motorola Mobility had unsuccessfully claimed Apple infringed six patents in a case before the U.S. International Trade Commission. The sole patent on appeal involves a way to control the delivery of data to applications on a wireless device. The three-judge panel of the Federal Circuit said the commission was correct to rule that Cupertino, California-based Apple used a different technique.
Google, based in Mountain View, California, inherited the case when it bought Motorola Mobility in 2012 for $12.4 billion. The purchase was made in part to get Motorola Mobility’s trove of more than 17,000 patents, which Google hoped would be used to counter attacks that its Android operating system was infringing Apple and Microsoft Corp. patents. Thus far, the strategy hasn’t resulted in a significant legal victory against either company.
The patent in this case also has been asserted against Redmond, Washington-based Microsoft.
Google is disappointed and is “evaluating our options,” said Matt Kallman, a Motorola spokesman. The company can ask that the case be reviewed by all active judges of the court, and can ask that the Supreme Court hear it. Kristin Huguet, an Apple spokeswoman, said the company had no comment.
The case is Motorola Mobility LLC. V. U.S. International Trade Commission, 13-1666, U.S. Court of Appeals for the Federal Circuit (Washington). The ITC case is In the Matter of Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, 337-745, U.S. International Trade Commission (Washington).
Another nod to Apple.
After a week long trial in a San Jose, California federal court. the jury deliberated for nearly two days before reaching a decision yesterday. Apple had requested $379.8 million, while Samsung argued that it should have to pay $52.7 million.
Apple and Samsung have been fighting in the courts for over two years. Apple was awarded over $1 billion last year after it convinced a jury that Samsung copied various iPhone features – like using fingers to pinch and zoom on the screen – along with design touches like the phone’s flat, black glass screen.
Earlier this year U.S. District Judge Lucy Koh upheld nearly $640 million of that verdict but ordered a retrial on the rest, ruling that the previous jury had made some errors in its calculations. Combined with the retrial verdict of $290.5 million on Thursday, Apple has now been awarded $929.8 million in the case. Not quite the billion but getting close.
What’s of interest is that Samsung have pretty much said – yes it’s a fair cop, we copied the iPhone and iOS. So the real question is not guilt but how much the lack of invention should cost Samsung. What’s fair? All Samsung profits from the technology they stole. Or how about the profits that Apple would have made if consumers purchase iPhones and not Samsung devices? There has been talk of a ban on Samsung products with the US imposing import restrictions on current products rather than obsolete phones. There is little in facet zero point in banning imports of obsolete products.
The two exhibits below tell pretty much the whole story.
The $290 million verdict is nearly $100 million less than the $380 million Apple sought in the retrial, but far above the $53 million Samsung said it owed. In a series of seemingly desperate last-minute attempts to delay the verdict, Samsung first moved for a mistrial on racial grounds, and then asked Judge Koh to stay the case pending a possibly years-long reexamination of a key Apple patent. Judge Koh denied both motions.
The retrial involved testimony from Apple’s marketing chief Phil Schiller, who revealed that the original iPhone was a massive “bet-the-company” gamble that ultimately paid off. Following the iPhone’s success, Samsung began manufacturing devices that copied the look and feel of it, as well as the iPad.
“There were huge risks,” Schiller said about the original iPhone. “We had a saying inside the company that it was a ‘bet-the-company’ product. We were starting to do well again in iPod. Then here we’re going to invest all these resources, financial as well as people, in creating this product.”