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August 27, 2012

Samsung Has Many Options after Historic Verdict Reached over Patent Dispute with Apple

By Ed Silverstein, TMCnet Contributor

Even though Samsung may have to pay at least a billion dollars to Apple (News - Alert) after a California jury ruled against the South Korean company for patent infringement, Samsung may be in better shape than first appears. 

Samsung (News - Alert) has many options to minimize the impact of the historic jury verdict.

First, Samsung plans to appeal Friday’s verdict, according to TechZone360. It is possible that all or part of the damages could be rejected by the judge who presided at the trial, or a federal appeals court – or even the U.S. Supreme Court, if this case makes it that far.

In fact, the case could be a tempting one for the U.S. Supreme Court to review given that it could set guidelines on what defines patent infringement – a new and evolving part of the law. The large amount of damages may also raise the interest of the highest court in the United States.

According to the Wall Street Journal, an appeal could focus on one of several tracks. The judge hearing the case could reject the verdict because it was “unreasonable or unsupported by the evidence.” The method used by the jury to calculate damages – which compares lost profits suffered by Apple versus sales of products made by Samsung with the infringing technology, is another grounds for appeal.

"I would say there are quite a few problems with the way Apple calculated damages," Brian Love, who teaches at Santa Clara University School of Law, told WSJ.

If the verdict is not overturned by the lower court judge, the case may make it to the U.S. Court of Appeals for the Federal Circuit, which focuses on patents. It reverses about half of the jury verdicts it hears, Love told The Journal.

One of the key grounds for appeal at that level could relate to the judge in California preventing the jury from hearing evidence that “designs similar to Apple's iPhone (News - Alert) and iPad existed before Apple got certain patents on those products,” The Journal said.

Apple also wants a U.S. sales ban of Samsung’s offending technology, but Samsung could introduce new products with slightly altered technology. They could avoid coming under a future court decision about a sales ban because they do not include the offending technology.

Related to this matter is how two other sales injunctions have been issued globally on Samsung’s Galaxy Tab 1.

TMCnet reported that a court in Düsseldorf, Germany issued a permanent injunction against the Galaxy Tab 10.1 from being sold in Germany. But Samsung released the slightly different Galaxy 10.1N after the injunction was released in Germany. In addition, an injunction against the Galaxy Tab 10.1 in Australia was issued and later lifted.

Samsung may not get hurt too badly from the verdict – when it comes to its profit, analysts said. There has been some speculation that Samsung could pay Apple a licensing fee for each Android (News - Alert)-based smartphone and tablet sold as part of a post-verdict settlement, according to Market Watch. The fee could be $5 a device, which is about what Samsung is paying Microsoft (News - Alert) for licensing.

“The financial impact would be relatively small…the annual royalties would amount to about 3 percent of Samsung’s annual operating profits from smartphones,” the source added.

Yet some industry watchers note that the recent case focused on Samsung’s older devices.

A new lawsuit has been filed by Apple against Samsung on some of its newer devices, which Samsung may want to settle out of court, depending on what happens with the California verdict.

The case involving the newer technology, expected to be tried in 2014, may relate to the Galaxy S II, Skyrocket, Epic 4G Touch, Galaxy Nexus, Illusion, Captivate Glide, Exhibit II 4G, Stratosphere, Transform Ultra, Admire, Conquer 4G, Dart, the Galaxy Tab 7.0 Plus and Galaxy Tab 8.9, according to a report from Extreme Tech.

Want to learn more about patents in the telecom industry? Then be sure to attend Synopsis Under IP/Patents Telecom Sourcing Conference (SUITS), collocated with ITEXPO West 2012 taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at SUITS. Follow us on Twitter.

Edited by Braden Becker
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