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Samsung to Pay Apple $1 Billion for Patent Infringement

A jury rules Samsung smartphones and tablets violate patents held by Apple

The first round of the Apple v. Samsung lawsuit is over and Apple has emerged victorious. In case you haven’t been following it, Apple sued Samsung for $2.5 billion for infringing on seven of its patents. Samsung countersued for $400 million because it needed to save face. It took the jury less than three days to find in favor of Apple for just over $1 billion in damages and, just to stick it to Samsung, they threw out Samsung’s countersuit.

I’m calling this the first round because Samsung will most likely file an appeal. From Samsung’s point of view, this is a fight to the death, and Samsung is unlikely to give up any time soon. There are several interesting things going on here, so let’s have a look at the good, the bad and the sad.

Apple’s victory is a victory for every inventor and innovator. Patent protection is a very complicated blood sport and, when the system works, it promotes investment and risk taking, and it protects the associated rewards. As a patented inventor, I am thrilled that Apple went after a copycat and successfully defended its intellectual property. While it’s true that most patents are only as powerful as the entity that owns them, the jury found that this patent infringement was blatant, if not obvious. If Apple didn’t win, it would have been a huge blow to the notion of patent protection.

Several of my learned colleagues have admonished that Apple is a huge company and its overt use of lawsuits as a competitive tool is unwarranted, unsportsmanlike and unnecessary. I disagree. If I were Apple, I would defend my intellectual property to the full extend of the law — it is the only path that makes sense. This is an important victory for everyone who has ever gone through the remarkably painful process of writing a patent claim. Congratulations to Apple’s legal team for a big win!

Samsung offers some extraordinary alternatives to iDevices. Most run Google’s Android operating system and, at the moment, most of the products (like the Samsung Galaxy S III) are technologically superior (from a features point of view) to their Apple counterparts. There is a very good chance that the judge will rule that Samsung must stop selling some of the products that were the subject of the lawsuit. Two bad things will occur:

  1. Samsung engineers will have to scramble to remove the infringing intellectual property, so they won’t have time to innovate; and
  2. Substandard products from other manufacturers will probably fill the gap.

Don’t get me wrong. I applaud Apple’s victory, but depending upon how the Judge rules, this could be very messy for consumers.

The sad news (if you’re not Apple) is that every smartphone and tablet that has a full glass screen looks like an iPad or an iPhone. Apple’s design patent portfolio is pretty complete and, if you’re smart device looks like an iDevice, you’re going to be in trouble. What’s worse is that Apple obviously has defensible patents around finger gestures and Apple is very unlikely to license any of its IP. Why should it?

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The fact is that Apple has innovated, pioneered and succeeded where dozens of others have failed. It created the modern concepts of a smartphone and a tablet and has the law on its side. Every consumer electronics company has just been put on notice — innovate or die! If you don’t invent your own, new, unique, patentable smartphone and tablet, Apple will wait until exactly the right moment, sue you, and win.

Actually, I’m not sad about this at all, but I am wondering… did Samsung lose this case because it created products that were inspired by Apple’s? Or did it lose because, during the discovery phase of the trial, Apple was able to show that Samsung executives documented their desire to copy Apple product features?

This may sound like a trivial issue, but it isn’t. Steve Jobs allegedly called Android a stolen product — but this case wasn’t against Google. What was stolen? What did Apple products actually inspire? And, what was just the result of a smoking gun? Food for thought as the battle for control of our connected lives continues.

About the Author: Shelly Palmer is the host of “Digital Life with Shelly Palmer,” a weekly half-hour television show about living and working in a digital world which can be seen on WNBC-TV’s NY Nonstop Tuesdays at 10p Eastern and online, and the host of “MediaBytes,” a daily news show that features insightful commentary and a unique insiders take on the biggest stories in technology, media, and entertainment. He is Managing Director of Advanced Media Ventures Group, LLC an industry-leading advisory and business development firm and the President of the National Academy of Television Arts & Sciences, NY (the organization that bestows the coveted Emmy® Awards). Mr. Palmer is the author of Television Disrupted: The Transition from Network to Networked TV (2008, York House Press) and the upcoming, Get Digital: Reinventing Yourself and Your Career for the 21st Century Economy (2009, Lake House Press). You can join the MediaBytes mailing list here. Shelly can be reached at shelly@palmer.net For information visit www.shellypalmer.com

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