Wednesday, May 21, 2014

Apple and Samsung to resolve disputes

Are the smartphone patent wars coming to an end?

On May 2, the jury returned a mixed verdict in Apple v. Samsung, finding both companies guilty in some respects and not others. Samsung was ordered to pay Apple $119.6 million, while Apple was ordered to pay Samsung a smaller $158,400 sum. This was a smaller loss for Samsung than in 2011, when it was ordered to pay Apple $930 million. Although Samsung was ordered to pay more than Apple, Samsung is likely relieved that it has to pay much less than what Apple asked for (only 5%), and that Apple was also found to be infringing.

Joe Mullin from Ars Technica writes:

From the trial's very beginning, Apple lawyers said that the whole purpose of Samsung presenting two patents of its own and asking for the "small" sum of $6 million was a cynical one: to convince the jurors that patents aren't worth that much.

If that was Samsung's goal—today's verdict is "mission accomplished." Considering litigation at this level is something of a war of attrition; Samsung has shown that it can basically fight Apple to a standstill. Considering Apple likely spent tens of millions on this trial alone, $120 million would certainly cover their legal bill, but not much beyond that.

Then on May 14, the Samsung's suit against Apple at the ITC, was lost on appeal to the Federal Circuit.

On May 19, The Korean Times reported that Samsung and Apple have agreed to begin talks to settle their patent disputes out of court. Florian Mueller wrote:

Things should come to an end during the summer. Apple doesn't have an endgame strategy. Its agreement with Google shows that its management is looking for a face-saving exit strategy from Steve Jobs' thermonuclear ambitions that were based on a totally unrealistic assessment of the strength of Apple's patent portfolio...I believe a one-time payment from Samsung to Apple for past infringement of U.S. design patents would be reasonable.

Apple's overly aggressive stance did not give it an advantage in the market in the long run. No major sales injunctions that would have affected market share took place. Either its patents were too weak or judges simply could not stomach issuing an injunction that moved competition to the courts rather than the market.

Edit: There are now mixed reports about whether Samsung and Apple are actually holding settlement talks.

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