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Samsung Electronics Co Ltd
Copycat or competitor? A U.S. jury’s choice of descriptor for Samsung Electronics (005930) will determine whether Apple (AAPL) defeats its Korean rival in the global patent war’s biggest battle yet. For two years, Apple has fought with other mobile device makers in courts on four continents. On July 31, the Apple litigation juggernaut went before a U.S. jury for the first time in the federal courthouse in San Jose, Calif., a short drive from Apple’s Cupertino headquarters. Seeking $2.5 billion in damages, Apple has accused Samsung of unlawfully imitating the design and software of its iPhone and iPad. “As we all know, it’s easier to copy than to innovate,” Harold McElhinny, Apple’s lead trial lawyer, told jurors in his opening argument.
Samsung’s attorney, Charles Verhoeven, fired back that while his client may have been “inspired” by Apple, such imitation is perfectly appropriate. “Being inspired by a good product and seeking to make even better products is called competition,” Verhoeven said. “Everybody does it in the commercial marketplace.” Then he foreshadowed evidence that purports to show that the iPhone, introduced in 2007, itself resembled earlier products designed by Sony (SNE) and others.
Apple filed the case as part of a much broader offensive against Samsung, Motorola Mobility, and HTC—all device makers that use Android, a mobile operating system made by Google (GOOG) that competes with Apple’s iOS. Apple says that Samsung infringed patents for the design of its devices, as well as for functions such as “rubberbanding,” the way the screen on an Apple device seems to bounce back when the user scrolls to the bottom of a file.
The animus driving the litigation runs deep, especially on Apple’s side. In the last 18 months of his life, founder Steve Jobs, who died last fall, was obsessed with crushing Android, which Google gives away to manufacturers—and which challenges Apple’s pitch that its exclusive, walled-garden offerings are different and better. According to his authorized biographer, Walter Isaacson, Jobs swore: “I’m going to destroy Android, because it’s a stolen product. I’m willing to go to thermonuclear war on this.”
The emotion on the other side was evident in the San Jose courtroom even before opening arguments. John Quinn, another Samsung lawyer, reiterated its desire to use evidence it says would show that it was developing rounded rectangular-shaped phones before Apple introduced the iPhone. Quinn told U.S. District Court Judge Lucy Koh that in 36 years of law practice he had never begged, but was “begging now.”
Koh rejected the request for what she said was at least the third time. “Don’t make me sanction you, please,” the judge said when Quinn persisted. “I want you to sit down, please.” The judge based her ruling on Samsung’s failure to disclose the evidence in a timely way.
Samsung said in an e-mailed statement that Koh’s procedural decision meant that “Samsung was not allowed to tell the jury the full story and show the pre-iPhone design for that and other phones that were being developed by Samsung in 2006, before the iPhone.” Also included in the release: Pictures of some of the evidence that Koh had disallowed.
McElhinny, the Apple lawyer, told Koh the release appeared to be “an intentional attempt to pollute this jury,” rising to “contempt of court.” In response, Samsung’s legal team said in a court filing that the company’s statement was merely intended to answer questions from the media. The trial is expected to continue through August.
The bottom line: Apple is trying to convice a jury that Samsung is copying its innovations. Samsung says its devices were “inspired” by, not a ripoff of, Apple.