August 24, 2012 4:18pm PT by Eriq Gardner
Apple Wins $1 Billion Jury Verdict in Samsung Patent War
A California jury has sided with Apple after a high-stakes trial to determine whether Samsung infringed iPhone and iPad patents and trademarks in creating and marketing its Galaxy devices. Deciding that Samsung stole intellectual property to create its popular smartphones, the jury rendered a stunning $1.05 billion verdict.
Apple originally estimated that Samsung should pay some $2.5 billion in damages for violating its intellectual property and diluting its marks. The trial has been closely watched because the outcome could impact the future of the all-important smartphone market.
In a verdict announced Friday afternoon, a San Jose jury found that Apple infringed patents on many features of smartphones, including the graphical interface, the bounce back, the tap and zoom and the design of the iPhone contours. The jury spared Samsung over a patent on Apple's design of the iPad.
But Samsung's infringements were declared by the jury to be "willful" on most of its patents, and Samsung "knew or should have known" it was causing its electronics divisions to infringe. The jury also agreed with Apple's contention that Samsung diluted its trade dress.
Samsung is likely to appeal.
At trial, Apple presented evidence of Samsung internal reports and e-mails showing that Apple products were clearly on the minds of those who had designed the Android-based Galaxy devices. Apple executives testified about confusion in the marketplace and wanted to punish Samsung by making the company hand over its Galaxy profits.
"Samsung was able to copy and incorporate the result of Apple's four-year investment in hard work and ingenuity -- without taking any of the risks," Apple attorney Harold McElhinny said in his closing arguments.
In response, Samsung brought forth its own employees responsible for designing the Galaxy. These witnesses testified that the company already was at work on many of the product features when Apple's popular line first came out. Samsung also cited so-called "prior art" and presented the evolution of many smartphone and tablet features as being natural.
"Rather than compete in the marketplace, Apple is seeking a competitive edge through the courtroom," Samsung attorney Charles Verhoeven said during his closing arguments. "It’s seeking to block its biggest and most serious competitor from even attending the game."
Samsung counterattacked Apple by alleging that its rival had violated Samsung's patents relating to high-speed data and sought nearly $400 million in damages, or about 2.4 percent of iPhone sales. A jury disagreed and declined to award any damages to Samsung.
The trial, which lasted about three weeks in a federal courtroom, was marked by heavy fighting on a number of procedural issues, from what evidence could be shown to the nine-person jury to the type of form that jurors were given to decide guilt and calculate damages. The situation got so contentious at one point that U.S. District Court Judge Lucy Koh exclaimed, "I don't trust what any lawyer tells me in this courtroom."
The judge's many rulings along the way in what some have called the "tech trial of the century" likely will be fussed over during an appeal.
The verdict marks the latest in a case that has surprised many by getting this far. Litigation with billions of dollars at stake rarely reaches a dramatic conclusion at trial. But Apple's late founder Steve Jobs apparently was "shocked" at the introduction of the Galaxy smartphone and confronted Samsung executives in 2010, according one Apple witness testifying in the case.
The development of smartphones and tablets has begun to revolutionize Hollywood, impacting the nature of content and the types of deals that govern the distribution movies and television shows. Apple executives testified that they knew the iPhone would be a huge success five years ago when it was developed as "Project Purple" because when work began, phones weren't functioning as good entertainment devices. When its products came out, Hollywood was so enraptured that it gave the company hundreds of millions of dollars in free product placement.
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