Bloomberg News

Samsung Copying Was ‘Intense,’ Apple Says in Close

August 21, 2012

Photographing the Apple logo at an Apple store in Germany.

File photo of men using cell phones to photogaph the Apple Logo at a store in Germany in 2011. Photograph: Philipp Guelland/dapd/AP

Samsung Electronics Co. (005930) was so desperate to catch up with Apple Inc. (AAPL:US)’s smartphones and tablet computers in February 2010 that the South Korean company began “three intense months of copying” the iPhone maker, a lawyer for Apple said.

Attorney Harold McElhinny, in closing arguments at a multibillion-dollar intellectual property trial in federal court in San Jose, California, told jurors documents prove better than witness testimony how Samsung went about changing its mobile devices to mimic Apple’s “revolutionary” designs.

McElhinny said internal e-mail at Samsung revealed that the company was experiencing a “crisis of design” due to competition from the iPhone even as another e-mail sent just two weeks later showed Samsung was facing pressure from Google Inc. (GOOG:US) to make its devices look less like Apple’s.

“Samsung realized how far it was falling behind the iPhone,” McElhinny said. “In those critical three months Samsung was able to copy and incorporate” Apple’s four years of research and development “without taking any of the risk,” he said.

Apple, based in Cupertino, California, sued Samsung in April 2011, and Suwon, South Korea-based Samsung countersued. The case is the first to go before a federal jury in a battle being waged on four continents for dominance in a smartphone market valued by Bloomberg Industries at $219.1 billion.

Big Conglomerates

Samsung’s lawyer, Charles Verhoeven, framed the jury’s decision as one that could shape the future of the technology industry. If the jury rules in Apple’s favor, he said, big conglomerates with large patent portfolios would stifle innovation by blocking out competitors.

“It’s a very important decision you have to make,” he said. The decision “could change the way competition works in this country,” he said. “Rather than compete in the marketplace, Apple is seeking to gain an edge in the courtroom. It’s seeking to block its biggest and most serious competitor from even attending the game.”

Instead of copying the iPhone, Samsung seized on technological advances to design its devices with full glass screens for the best view of e-mail, an Internet browser and video, he said.

Verhoeven said Apple’s estimate of more than $2 billion in damages is unfounded.

“There was no confusion, deception, consumer harm,” he said. “Apple is here asking for what it’s not entitled to.”

Damages Sought

In addition to damages, Apple seeks 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 seeks as much as $421.8 million in royalties that the company claims it’s owed for Apple’s infringement of two patents covering mobile-technology standards and three utility patents.

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: Andrew Dunn at adunn8@bloomberg.net


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