Samsung has been ordered to pay Apple about US$1bn in damages for infringing patents, highlighting the enormous value of intellectual property protection laws. A US jury found a number of patents that are owned by Apple and that relate to the technology used in the iPod and iPad products and their appearances were valid. It held that Samsung had infringed these patents in its Galaxy smartphones and its Galaxy 10 tablet, and that Samsung's infringement had been "wilful".
And it dismissed Samsung's counterclaim that Apple had infringed various patents Samsung owns.
The patents that had been infringed covered various features of Apple's products, including the so-called "bounce-back response", which makes lists jump back; the "pinch-to-zoom" feature, which the user uses to magnify images; the feature that allows users to zoom into text by tapping a finger; and the appearance of the iPhone (including the system of displaying text and icons), which is protected by design patents.
The two companies reacted predictably. Samsung said the judgment would lead to "fewer choices, less innovation and potentially higher prices", adding that it was "unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners".
Apple, on the other hand, praised the court "for finding Samsung's behaviour wilful and for sending a loud and clear message that stealing isn't right".
From a legal point of view, the ruling is significant. On September 20, the judge will decide whether to issue a sales injunction or an order requiring Samsung to pay licence fees to Apple.
At this hearing, the judge will also decide whether to confirm the damages award or increase it. Samsung has already made it clear that, whatever happens, an appeal will be lodged.
The US case is part of litigation that has been going on around the world. Interestingly, a short while back a court in South Korea dismissed Apple's patent infringement claims against Samsung, with the exception of the claim relating to the "bounce-back" feature. It also held that a number of Apple's patents were invalid, having been anticipated by earlier patents.
Lastly, it held that Apple had in fact infringed two of Samsung's patents.
The commercial implications of the US judgment are equally significant. The market for smartphones and tablets is huge, and Apple and Samsung account for more than half of all sales. Samsung sold 50m smartphones in the quarter to June 2012, while Apple sold just 26m units over the same period. So if Samsung is barred from selling its products in the US, it will be an enormous boon to Apple and a very large blow to Samsung. To complicate matters further, Apple is a major customer of Samsung's, buying a large number of its chips from the South Koreans.
It's also worth noting that Samsung's products are powered by Google's Android, a system that is used by other smartphone manufacturers, too.
Some commentators have described Apple's attack on Samsung as a "proxy war" against Google, and predicted that Apple will go after Google next.
This case highlights the importance of patent and other intellectual property rights when bringing new products to market. For many technology companies, intellectual property rights and especially patentsform the basis of the business, and these companies often have huge patent portfolios that are in themselves worth vast sums.
Patenting has become big business and one ignores it at one's peril.
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