Get ready for “rubberbanding.” That’s the way the screen on an iPad or iPhone seems to bounce when you scroll to the bottom of a file -- and it’s among the terms jurors must understand as Apple Inc. (AAPL:US) and Samsung Electronics Co. face off in a patent trial this week.
Apple has become the most valuable company by creating products that stand out for design and ease of use, stemming from scores of smaller innovations, such as rubberbanding, rather than epic underlying technology breakthroughs.
In the trial in federal court in San Jose, California, Apple will try to prove to jurors that its brand of innovation is not only effective in the marketplace, but also defensible in a courtroom.
“Everyone has a sense that Apple does something different,” said Cheryl Milone, chief executive officer at Article One Partners, which makes software used to prove or disprove intellectual property claims. “Whether those differences can be protected in court is the question.”
As consumers move en masse from older, limited-feature handsets to computer-like smartphones, the trial could have a big impact on one of the largest, fastest-growing areas of technology, said Chris Jones, an analyst at Canalys. If Apple were to win, Samsung could be forced to scale back features in its handsets, making them less attractive to consumers.
A victory could also help Apple hobble another important foe: Android, the operating system that Google Inc. gives away to manufacturers and Samsung uses on key products. Google’s approach threatens Apple’s pitch to consumers that its exclusive offerings are different and better.
Courts historically have given greater protection to engineering-based innovations that create an entirely new way of accomplishing a task, said Milone, who practiced as a patent attorney before founding Article One. If granted, these so- called utility patents protect the inventor from copying for 20 years after the first filing.
Apple alleges that Samsung has infringed three such patents. One is for rubberbanding, and another relates to how users can double-tap a Web page or photo to zoom in.
What sets Apple’s case apart is the company’s focus on protecting design patents, which relate to the look and feel of its mobile products. The four in the San Jose trial cover such things as the placement of the on-off button on the iPad and iPhone and the devices’ flat, edge-to-edge glass fronts. One of the patent documents consists of little more than nine drawings of a rectangular tablet, with no dimensions.
Design patents carry a term of 14 years and are often harder to defend than engineering patents because cases often hinge on more subjective opinions. Also, companies can often make relatively easy cosmetic changes to their products to avoid infringement.
In a countersuit being heard in the same case, Samsung claims that Apple is infringing five patents, including two that involve basic telecommunications technology that let mobile phones talk to each other.
Apple’s patent portfolio shows the weight the company puts on design-based innovations. While just 2.7 percent of patents granted to technology companies are design patents, 13.4 percent of Apple’s 5,452 patents fall into this category, according to MDB Capital Group LLC, which maintains a patent database. Of the 359 patents listing Apple’s late co-Founder Steve Jobs as an inventor, 86 percent are for design.
“Apple patents the things that they think make Apple special,” said Bob Borchers, a venture capitalist who used to work at Apple. “They focus on the consumer’s experience.”
The company’s previous efforts to win protection for such advances has been mixed. In 1992, Apple lost a copyright- infringement suit aimed at preventing Microsoft Corp. (MSFT:US) from using graphical features of the Macintosh in Windows. The setback opened the market to Windows machines from companies such as Dell Inc. (DELL:US) and Hewlett-Packard Co. (HPQ:US)
When Apple introduced the iPhone in 2007, Jobs said his company filed for 200 patents to protect the invention. Apple has been aggressive in asserting those, and has won bans on sales of versions of Samsung’s Galaxy tablet in Australia and the European Union. In the current trial, U.S. District Judge Lucy Koh granted an injunction preventing sale of the tablet in the U.S.
Apple is setting a high price for its patents in court. It’s asking for $2.5 billion, or as much as $7.5 billion if jurors believe punitive damages are warranted.
Even $2.5 billion works out to about $31 for each device sold by Samsung. Apple ascribes $24 of that $31 to Samsung’s misuse of its design patents. In its countersuit, Samsung is asking Apple to pay $14 for each infringing device.
As complicated as the case may be, Apple will try to convince jurors of one essential idea: Its Korean rival is a copycat. Samsung will contend that none of Apple’s design flourishes are totally novel, and that offering patent protection to the rectangular shape and flat front surface of its products would unfairly limit competition.
“Samsung is on trial because it made a deliberate decision to copy Apple’s iPhone and iPad,” Apple said in the opening line of its key pretrial filing with the court. “Try as it might,” Apple said, “Samsung cannot deflect attention from its own copying by the patents it has asserted against Apple.”
In its filing, Samsung answered that a lot of competing products appear similar.
“In this lawsuit,” the company said, “Apple seeks to stifle legitimate competition and limit consumer choice to maintain its historically exorbitant profits.”
Apple may have an advantage in that Koh is a former intellectual property lawyer who has been willing to consider the company’s argument. She granted the preliminary injunction on Samsung’s tablet, and hasn’t referred to a recent ruling by Richard Posner, the federal judge who in June dismissed a suit between Apple and Google’s Motorola Mobility because neither could prove that it had been damaged economically.
To prevail in San Jose, Apple will need to persuade jurors -- and that won’t be easy, even in a case being heard just a few miles from its headquarters, said Kevin Rivette, managing partner at 3LP Advisors LLC and a former vice president of intellectual-property strategy for International Business Machines Corp.
“Design patents are supposed to be hard to defend,” Rivette said. “If you could stop everyone by patenting a rectangular phone, then Motorola could have done it years ago and none of this ever would have happened.”
The case is Apple Inc. v. Samsung Electronics Co. Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).
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