Bloomberg News

Apple Lawyer Tells Jury Samsung Chose to Copy Apple

July 31, 2012

A lawyer for Apple Inc. (AAPL:US) told a jury that Samsung Electronics Co. (005930) decided it would rather copy the iPhone maker’s technology than “beat Apple fairly in the marketplace.”

“As we all know it’s easier to copy than to innovate,” Harold McElhinny, Apple’s lawyer, said today during his opening statement at a trial in federal court in San Jose, California.

McElhinny showed jurors a slide of Samsung’s mobile phones from 2006 with physical keyboards and squared corners, and another of its phones from 2010 with rounded edges and a glass touch-screen. Samsung arrived at the newer design only after Apple founder Steve Jobs introduced the iPhone in 2007, the lawyer said.

Jurors will decide each company’s claims that its rival infringed patents covering designs and technology for mobile devices, with potential damage awards reaching billions of dollars. The case is the first U.S. jury trial of a battle being fought on four continents for dominance of a smartphone market that Bloomberg Industries said was $219.1 billion last year.

McElhinny outlined the history and risk that Apple took in developing the iPhone, including developing a new user-interface and introducing a touch-screen glass front screen. While the device was a hit, its success wasn’t a sure thing with companies like Nokia Oyj (NOK1V), Motorola Inc. and Suwon, South Korea-based Samsung dominating the market, the attorney said. If the debut had been a flop, it “could have ended the company’s future,” the attorney said.

Web Page

One patent in dispute involves how a picture or web page bounces back if a user scrolls to the end of a file. Samsung adopted a similar feature for its smartphones, Apple claims. Another patent at issue covers the use of two fingers to zoom in on a picture or document, a feature that Cupertino, California- based Apple alleges Samsung copied.

McElhinny said that Samsung in June 2010 introduced the Galaxy Si9000 smartphone, the first in the Galaxy line, which he called “a complete iPhone clone.” That led to U.S. sales of 22 million mobile phones and tablet computers infringing Apple patents, which generated $2 billion in “profit that they made using our intellectual property.”

“You will hear that Apple did not sit quietly by when Samsung started infringing Apple products,” McElhinny told jurors. “Apple met with Samsung to point out that Samsung was acting illegally and demand that Samsung come up with its own designs and user interface.” That had “no positive effect,” he said.

Rectangular Shape

Samsung’s lawyer, Charles K. Verhoeven, disputed Apple’s claims that it’s copying, pointing to patents from before the iPhone’s release by companies including LG that show a rectangular shape and a glass screen.

At the outset of his opening argument, Verhoeven showed the jury a slide showing that before the iPhone was introduced, Samsung made different types of mobile phones -- including some that he said were “rectangular in shape, with rounded corners, that had touch screens on them.” The company continues to manufacture those same types of phones, he said.

“As the guts of these phones got more sophisticated, you can do more things,” Verhoeven said. “The entire industry moved this way. Is that infringement? The evidence is going to show, no, it’s competition. It’s providing the consumer what the consumer wants.”

‘Inspiring’ Product

Samsung’s lawyer said the iPhone was an “inspiring” product that created competition.

“Being inspired by a good product and seeking to make even better products is called competition,” Verhoeven said. “It’s not copying and it’s not infringing. Everybody does it in the commercial marketplace.”

He said Apple was, in fact, inspired by Sony Corp., pointing to e-mails among members of Apple’s design team discussing how the iPhone’s original design compared to a Sony design.

Apple’s demand for $2.5 billion in damages is based on claims Samsung copied the iPhone and iPad. Apple also wants to make permanent a preliminary ban it won on U.S. sales of a Samsung tablet computer, and extend the ban to Samsung smartphones.

Samsung countersued and will present claims that Apple is infringing two patents covering mobile-technology standards and three utility patents. Samsung is demanding royalties of as much as 2.4 percent for each device sold, according to a court filing.

The case is Apple Inc. v. Samsung Electronics Co. Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net; Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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