Apple's big win over Samsung: what does it mean?

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If it stands, a jury's one-sided decision will impact consumers, vendors and the entire tech industry. But for now, it's a wait-and-see game.

Samsung Galaxy S III and Apple iPhone 4S
(Credit: Samsung/Apple)

History buffs will note that Apple scored one of the most lopsided victories since Agincourt on Tim Cook's one-year anniversary as the company's CEO. Late on Friday, the jury in a San Jose, California, courtroom decided overwhelmingly in favour of Apple's patent claims against Samsung, awarding the company US$1.05 billion in damages.

The verdict is likely to reverberate throughout the tech world and beyond, but it won't have much immediate effect on consumers. The next steps will more legal action, with Samsung expected to file an appeal and Apple filing for injunctions on Samsung products that violate its patents.

In a statement released shortly after the verdict, Samsung called the decision "a loss for the American consumer" that would reduce choice and innovation, and possibly result in consumers paying higher prices:

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. 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. Samsung will continue to innovate and offer choices for the consumer.

"We applaud the court for finding Samsung's behaviour wilful and for sending a loud and clear message that stealing isn't right," an Apple spokesperson said following the verdict.

Little surprise there. Right now, nobody actually knows for certain how this is going to play out. But consumers could be affected in very real ways, depending on potentially different scenarios.

See you back in court?

While the victory is important for Apple, it shouldn't count its money just yet. The company still faces a federal circuit that reverses at least something in about half the cases it reviews. In addition, large patent verdicts have been frequently reversed or lowered. "It feels like it's over but it's got a long way to go yet," noted Brian Love, a law professor at Santa Clara University.

The first thing that now happens is a "post-trial motions practice". This is where we will learn whether US District Judge Lucy Koh intends to modify the damages award against Samsung and issue a permanent injunction against the company's products that were found to be infringing. All of Samsung's handsets were found to infringe at least one of Apple's patents. Love said that Koh could also triple the damages award. Before doing any of this, it's possible that she will allow the parties to file motions on this issue.

"It's not at all clear whether Samsung's products have to come off the market right away if the judge issues an injunction," Love said. "Will the [appellate court] stay the order pending the outcome of the appeal? In all likelihood, it will be months, maybe years, before any money changes hand between Samsung and Apple."

Samsung is expected to appeal, although its post-verdict statement didn't give any hint of its next move. Apple might file for an appeal over the trade dress issues that the jury found for Samsung, and go after other handset makers that it believes violate its patents and copycats its designs, emboldened by its court victory.

Android phone makers will scramble, if they haven't already, to avoid Apple patents and come up with their own imitations or innovations. And Google will have to determine how it can better protect its partners beyond Samsung, which are already in court battles with Apple, or soon will be.

Innovation

In coming days and weeks, count on hearing Samsung turning its "threat to industry innovation" warning into a talking point. In essence, its argument will be that Apple has now used the courts to shut down competitors who dared to advance upon functional designs that result in more competition and better products.

The flip side of this argument is that the court decision will force Samsung — as well as all other smartphone and tablet computer manufacturers — to think harder and better about design. After all, Apple's Jony Ive is not the only resident design genius in techdom. If he is, then the technology industry ought to make it official and just concede the game to Apple.

Get ready to pay up

If the decision stands, Samsung and a lot of other Android developers will have to pay extra royalties to Apple. Unless they decide to eat those expenses, count on the affected vendors to pass any extra costs along to consumers.

Google: a big loser

No matter how it may spin today's verdict, this was a big loss for Google. And don't expect Apple to stop here. By pursuing a harder legal tack against its rivals, Apple's gambit worked out to perfection. And if this puts any stumbling blocks in Android's path or raises any questions in the minds of potential smartphone makers and buyers, so much the better for Apple.

Still think a US$1000 Apple share price is a pipedream?

Given Wall Street's endemic volatility, predicting stock prices is a fool's game. But Apple, now the most valuable company in the US as measured by market capitalisation, is likely to become that much more valuable. Already, some analysts had put a US$1000 price tag on the stock, which closed Friday at US$663.22 (in after-hours trading, investors responded by sending the stock up nearly US$12). If today's decision stands, US$1000 may not be so outlandish after all.

Via CNET.com



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JoshA1 posted a comment   

Many people have claimed for years about these so called "better products". Yet each new generation iPhone dwarfs the sales of all of these devices, and generates higher consumer satisfaction. So who's making the better products?Apple did not get to where it is because of hype.

 

MarkM3 posted a comment   

All Samsung did was take existing products and make them more functional. Does this story sound familiar to anyone?

 

KamK posted a comment   
Australia

copyright is copy right. the fact is samsung saw it was way behind the 8 ball and scrambled to catch up to apple, in the process pretty blatantly ripping off the iphone when they released the first galaxy. no one can deny the similarities when it first came out.

they rolled the dice and lost. what has apple done wrong?
you think if it was the other way round, samsung wouldn't have sued the pants off apple?

get real people. this is the real world.

 

tabboo posted a reply   
Australia

HOW can rounded edges on a phone be copyright? so many phones do it these days. the UI looked nothing like the apple iOS UI. this entire case makes absolutely no sense, and is simply apple trying to eliminate its largest competitors to try and get a larger market share.

they know they are falling behind android. instead of suing google directly, apple knows they can get much more money by suing individual mobile phone companies.

loo at Televisions for example; one company started using 3D technology in their TV's. does that mean they can sue every other company now making 3D television? NO.

 

MarkM3 posted a reply   

I completely agree tabboo. Apple most likely won't sue Google directly because they know it's a battle that they really won't be able to win easily. I think it's kind of like when the MPAA went after iiNet for piracy because they knew they couldn't take on the bigger players like BigPond.

 

JoshA1 posted a reply   

You clearly have been brainwashed by Samsung. The whole point of business is to develop a point of difference.Th Galaxy S does not merely look like the 3GS, they copied the icons, rubber banding, etc - even the damn box is designed the same. Wtf??That is not fair and should be punished. Imagine how much more choice we would have as consumers if Samsung put those resources into developing new technologies rather than copying?

 

tabboo posted a reply   
Australia

HOW can rounded edges on a phone be copyright? so many phones do it these days. the UI looked nothing like the apple iOS UI. this entire case makes absolutely no sense, and is simply apple trying to eliminate its largest competitors to try and get a larger market share.

they know they are falling behind android. instead of suing google directly, apple knows they can get much more money by suing individual mobile phone companies.

loo at Televisions for example; one company started using 3D technology in their TV's. does that mean they can sue every other company now making 3D television? NO.

 

JasonE posted a reply   

Apple has refused to pay any licence fees for Samsung's 3G patents. What would an iPhone be if it couldn't operate wirelessly? There's one thing apple has clearly done wrong.

 

Chandler posted a reply   
Australia

From my understanding, Apple didn't have to pay any licensing fees to Samsung as the hardware that infringes on those patents was purchased from Intel, and Intel has a license to manufacture hardware using those patents.


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