Bloomberg News

Apple-Samsung Jury Must Answer More Than 600 Questions

August 22, 2012

The jurors who will decide the outcome of the intellectual-property trial between Apple Inc. (AAPL:US) and Samsung Electronics Co. (005930) must answer more than 600 questions simply to get to the end of their verdict form.

The trial over smartphone and tablet patents, which concluded yesterday in federal court in San Jose, California, produced dozens of exhibits, 50 hours of argument and testimony over three weeks, and a multitude of calculations to arrive at estimated potential damages of billions of dollars.

That was before U.S. District Judge Lucy Koh started reading 109 pages of instructions to guide the nine-member jury through the labyrinthine 20-page verdict form. The exercise, done yesterday before lawyers gave closing arguments, required more than two hours, including court-ordered “stand up” breaks to make sure everyone stayed alert.

The verdict form is a “whopper,” Stanford Law School professor Mark Lemley said in an interview. Asking jurors to parse three different sets of legal rules for the claims at issue -- utility patents, design patents and trade dress, or how a product looks -- “will be particularly hard,” he said.

“The jury needs to figure out what category to put each patent in, and then remember to apply some of the rules” contained in the judge’s instructions “to some of the patents, and other rules to other patents,” he said.

The jury started deliberating today. Federal rules require that for either side to win, the jury verdict must be unanimous.

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.

Preliminary Ban

Apple alleges infringement of seven of its patents and seeks $2.5 billion to $2.75 billion in damages. The world’s most valuable company also 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.

At least 28 Samsung products are accused of infringement, and the verdict form requires jurors to specify which corporate entity -- the Samsung parent company and two U.S. units -- is responsible for copying and how much in damages, if any, Samsung owes for each infringing device.

Samsung claims infringement of five of its patents and seeks as much as $421.8 million in royalties.

The trial, which began July 30, wrapped up yesterday with two hours of closing arguments by each side.

A lawyer for Apple, Harold McElhinny, said Samsung was so desperate to catch up with Apple’s smartphones and tablets in February 2010 that the South Korean company began “three intense months of copying” the iPhone maker.

‘Revolutionary’ Designs

He 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.

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.

‘Important Decision’

“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.”

Rather than copy the iPhone’s rectangular shape and rounded corners, 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 damages claim is unfounded.

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

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 reporter on this story: Peter Blumberg in San Francisco at pblumberg1@bloomberg.net

To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net; Tom Giles at tgiles5@bloomberg.net


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