Samsung: Apple victory to hurt competition

By Kristin Bent on Aug 28, 2012 8:11 AM
Filed under Mobility

Consumers will suffer.

Apple's U.S. victory in its global patent war against Samsung will deal a blow to American consumers and stifle fair competition in the mobile market, according to Samsung, which has been ordered to pay Apple $US1.05 billion in damages for allegedly copying the iPhone and iPad.

The South Korean smartphone giant is seeking to overturn Friday's verdict, which was issued after three days of deliberation by a Northern California District Court jury. Samsung has dubbed the verdict an overall loss for U.S. consumers, and one that will trump innovation in the lucrative smartphone and tablet markets.

"Today's verdict should not be viewed as a win for Apple, but as a loss for the American consumer," Samsung said Friday in an official statement.

"It will lead to fewer choices, less innovation, and potentially higher prices. It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies."

Samsung was found to infringe on five of the seven Apple patents called into question, including one for Apple's "Bounce-Back" scrolling feature and one for the general design of its home screen icons.

If the jury's decision is not overturned, Samsung will likely pursue an appeal.

"This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple's claims," Samsung said in an internal memo, released publicly Monday. "Samsung will continue to innovate and offer choices for the consumer."

Samsung's Galaxy Tab 10.1 tablet, which has been banned in the U.S. since Apple won a preliminary injunction against the device in June, was not found to infringe on any Apple designs. Samsung has filed a motion requesting the ban be lifted, and it is seeking damages from Apple to compensate for lost Galaxy Tab sales during the injunction.

Apple, for its part, said it was grateful that the Northern California jury sent "a loud and clear message that stealing isn't right," according to an internal memo released by 9to5Mac. Apple was originally seeking $US2.5 billion in damages from its rival.

How Apple's win affects U.S mobile market

According to industry analysts, there could be some truth to Samsung's argument that Apple's victory will cause a spike in U.S. smartphone and tablet prices.

Gartner analyst Tuong Nguyen speculated that because traces of many Apple-owned patents can be found in other devices beside Samsung's, some handset makers may have to start paying royalty fees to Apple for continued use of these patents. In turn, this could prompt OEMs to raise the price of their products, as a means to offset these payments.

"If we are really talking about how far this might reach, if Apple ... wins on all the points for patents and IPR [intellectual property rights], I imagine it would increase costs for consumers," Nguyen told CRN. "There are a lot of patents that Apple brings up that seem -- from a market perspective, not a legal perspective -- like many vendors are using. So, the ramifications there seem pretty widespread."

But Apple's win isn't necessarily all bad news for the market, Nguyen continued. In fear of suffering the same legal consequences as Samsung, Apple rivals could start exploring totally unique design techniques, further driving innovation and ushering in an entirely new generation of mobile devices.

"It will force some further competitive differentiation," said Nguyen. "In the long term, everyone could innovate more."

Of course, these broader market implications could shift as Samsung presses to overturn the decision. "This is just part one," Nguyen said. "I think they are still going to go back and revisit some of the evidence."

Samsung and Apple have been waging a worldwide patent battle for over a year, since Apple first accused Samsung in April 2011 of churning out smartphones and tablets that were "slavish copies" of its own.

Courts in the U.K., the Netherlands and Germany have already ruled in Samsung's favor that it did not copy Apple's designs.T hey instead ruled that most of the patents in question were standards-essential patents, or patents required to meet industry standards, Samsung said.

This article originally appeared at

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