After the phony war of last fall, the smartphone patents trials are now coming thick and fast ‘ though not yet with any real impact on the overall balance of power. One of the most critical, between Apple and Samsung in the San Jose federal court, has kicked off this week after about 18 months of arguments, with the firms playing for billion-dollar stakes and the balance of power in the smartphone business.
On Tuesday, they set out their opening arguments in the ‘trial of rectangles’, which seeks to set legal boundaries between creativity and competition. Apple sued its Korean arch-rival in April 2011, citing a long list of alleged violations of design and software features of the iPhone or iPad. Samsung countersued a few days later and the two cases have been incorporated into a single process, and also pruned back considerably, under the orders of Judge Lucy Koh.
Both firms were playing one-upmanship in the innovator stakes, Apple arguing that it had changed the norms of the mobile device business, only to see Samsung copy it; Samsung saying it invented and still supplies many of the components of those Apple offerings, such as the admired RetinaDisplay.
Apple’s lead attorney Harold McElhinny of Morrison & Foerster, said his client was ‘literally betting their company’ when it went into smartphones, while for Samsung, it was ‘easier to copy than to innovate. It’s far less risky’. Showing a series of photos of Samsung handsets from 2006 to 2010 he sought to say that their design changed radically and “Samsung decided simply to copy every element of the iPhone’.
Specifically, Apple says its frenemy copied user interface features like pinch-to-zoom, as well as the basic design of a rectangle with rounded corners, neutral border, thin bezel and flush glass surface. This look and feel is described in Apple design patents but the fairly generic qualities have led to Samsung executives complaining that this is a ‘trial about rectangles’, and that nobody could claim a “monopoly on a rectangle.”
Apple also presented documents which it claimed were evidence that Samsung set out to copy its products, including an analysis of the iPhone with a note saying: ‘HW [hardware] portion: Easy to copy.’ It went on to say that consumers confuse Samsung’s products with Apple’s because of the similarities, hitting its sales.
Samsung’s lead attorney, Charles Verhoeven of Quinn Emanuel Urquhart & Sullivan, acknowledged his client had been “inspired” by the iPhone and iPad but said that was inevitable in the consumer products sector, and that Apple had been similarly influenced by other players when creating its designs. “Being inspired by a good product and seeking to make even better products … is called competition. It’s not copying, it’s not infringement,” Verhoeven said.
Samsung will also argue that Apple’s patents are invalid, partly by showing earlier products that used features Apple is claiming as its own ‘ citing the Hewlett-Packard TC1000 tablet from a decade ago, and a rectangular tablet with rounded corners, designed by Roger Fidler in 1994.
Additionally, Samsung will pursue its own patent infringement claims against Apple, focusing on the fundamental mobile IPR in which it is far stronger than its rival. The patents include one covering the ability to email photos from a phone, and Verhoeven showed a video of the late Apple CEO Steve Jobs demonstrating that feature at the iPhone launch.
In a twist, Samsung publicly released material that Koh had barred from being shown to jurors during the trial, and which it claims shows that the iPhone was derived from earlier concept designs by Sony. Koh was said to be ‘livid’ that, while this evidence had been barred from court, it was still distributed to the media.
Samsung lawyer John Quinn further irritated the judge by filing a motion in court concerning the excluded documents, saying: ‘The Judge’s exclusion of evidence on independent creation meant that even though Apple was allowed to inaccurately argue to the jury that the F700 was an iPhone copy, Samsung was not allowed to tell the jury the full story and show the pre-iPhone design for that and other phones that were in development at Samsung in 2006, before the iPhone. The excluded evidence would have established beyond doubt that Samsung did not copy the iPhone design. Fundamental fairness requires that the jury decide the case based on all the evidence.’ Such tactics risk alienating Koh, but could lay the trail for a future appeal on the grounds of unfairness.
The issues are similar in spats round the world between the two giants, but the San Jose case is seen as the most decisive because of the importance of the US market to both the iPhone and Samsung Galaxy families. “It’s the most important trial between these players, so far,” IPR specialist Florian Mueller of Foss Patents said. “Apple is hoping for a breakthrough that would have important implications for other lawsuits.”
Judge Koh recently upheld an injunction on US imports of the Galaxy Tab 10.1 tablet, and ordered a pre-trial ban on the Galaxy Nexus smartphone. Samsung has appealed both of these rulings but some believe they show the latest trial could go Apple’s way, especially as the iPhone maker is a huge employer in Silicon Valley, the location for the process.
The stakes get higher all the time as Samsung gains mobile power ‘ it sold twice as many smartphones as Apple in the second quarter. Apple will be keen to make its point that the Korean giant could not have got to that position without copying the iDevices, while Samsung will make the even more fundamental argument that, without its essential patents, the iPhone and iPad could not exist at all. It also plans to make the collateral case that, if Apple wins, that outcome would “stifle legitimate competition’ from all smartphone makers.
Most of these opinions have already been rehearsed in pre-trial filings but now the trial will hear them fleshed out by 20 witnesses per side, including executives, engineers, designers and patents experts.
While the California trial unfolds, Microsoft is in a more conciliatory mode, in its own fight with Motorola Mobility. The Windows giant said it was open to a comprehensive settlement with the Google unit, ending disputes which have already seen injunctions on Motorola products in the US and Germany.
‘This particular litigation now stands at a crossroads,’ wrote Microsoft general counsel Brad Smith and IPR chief Horacio Gutierrez on a corporate blog posting. ‘Google can take one of two paths: it can choose either to engage in serious discussions to search for patent peace or persevere in its diversionary tactics. We hope it will choose the first course, and we stand ready to engage in good faith if it does.’
Microsoft may sound generous, when it has won bans on US imports of certain Motorola handsets, which were found to infringe a syncing patent. It has also win limits on sales of some Motorola offerings in Germany based on other patents. But it has its own sales losses at stake too. Motorola also has patent cases against its rival in the US and Germany, and these concern video encoding patents which could hit Xbox and the Windows OS itself.
Some of that Motorola IPR is essential to the H.264 and Wi-Fi standards, which has embroiled the firm in further disputes, and an EU probe, over whether it is supporting the ‘Frand’ (fair reasonable and non-discriminatory) guidelines for standards-essential patents. Motorola has submitted offers to license these patents, and says it has offered to take a license for Microsoft’s ActiveSync, but its antagonist says the terms on offer are unreasonable and go against Frand principles. On that basis, it has also filed a breach of contract suit against Motorola which should be heard in Seattle in November.
Smith and Gutierrez said any agreement must cover all Microsoft patents, including some which it says are involved in Google’s Android. Motorola Mobility is one of the few Android majors which has not signed a licensing deal for that IPR, but has chosen to go to court instead. Samsung, LG and HTC are among those which have signed agreements with Microsoft.
Another big patent battle revolves around the digital imaging IPR mountain owned by Kodak, which it hopes to sell as part of its plan to exit bankruptcy protection. The former camera giant recently suffered its own setback when a key patent was declared invalid, but it still has huge assets to sell.
Google and Apple are rumoured to be the lead contenders and there is even speculation that arch-rivals Apple and Microsoft could team up to bid. There is a precedent ‘ they were both part of the consortium which acquired Nortel’s massive patent pile from under Google’s nose. In the Kodak case, they could face rival bids for the 1,100 patents from another group, consisting of various Android majors – Google, Samsung, HTC, and LG, according to The Wall Street Journal, along with San Francisco-based patent buyer and licensor RPX. So an Apple-Microsoft alliance would be a way to keep Kodak’s holdings out of Android hands.
Kodak will sell its patents in two major sections – 700 items covering digital capture technology, and another 400 for document imaging. Those patents went up for sale last year, though bidding collapsed amid legal challenges to some of them, and the emergence of news about Kodak’s precarious financial position.