Will Judge Koh tackle flaw in jury system?

US expert says her ruling on Dec. 6 will answer this question

U.S. federal judge Rucy Koh

There is more than a simple interpretation of law at stake when U.S. Federal Judge Lucy Koh rules next month on a $1.05 billion verdict in favor of Apple in its patent dispute with Samsung.

“Koh now has some very important decisions to make. She understands the weaknesses of the jury system and should use her authority to review the California verdict in a wise and reasonable manner,’’ said Jorge L. Contreras, co-chairman of the National Conference of Lawyers and Scientists (NCLS), in an interview with The Korea Times, Thursday.

Contreras stressed Koh can draw conclusions that the jury couldn’t.

Jorge L. Contreras, cochairman of the U.S. National Conference of Lawyers and Scientists.

“Where the verdict doesn’t make sense, she can seek to reform it. Where the jury seems to have failed to consider important issues like patent validity, she can consider them.’’

In August, nine U.S. jurors ordered Samsung Electronics to pay $1.05 billion for Samsung’s “willful infringement” of Apple patents. But the Korean technology giant is seeking a new trial over alleged misconduct by the jury foreman Velvin Hogan.

“The jurors didn’t really analyze data in sufficient detail and they ignored some important questions like the validity of Apple’s patents, Apple’s potential use of Samsung’s standard-essential patents (SEPs),’’ added Contreras, also co-chairman of the American Bar Association Section of Science and Technology Law’s Committee on Technical Standardization..

“Jurors are not economists and they seldom appreciate the nuances of the economic damages evidence that they hear. When jury verdicts are seen to be excessive, the judge can lower them, and this often happens,’’ Contreras added.

While doubtful that Koh will throw out the California verdict he said adjustment is possible.

“Legally, juror misconduct is cause for declaring a mistrial, which can result in a new trial. But given the judge’s comments about the administrative burden of the original trial, I suspect that she will do everything possible to avoid declaring an outright mistrial. Instead, she could modify the jury damages award or verdict in some way that would help Samsung, but avoid the cost and administrative burden of a new trial.’’

Contreras, a graduate of Harvard Law School, was a partner at international law firm Wilmer Cutler Pickering Hale and Dorr. His research focuses on the effects of intellectual property structures on the dissemination and production of technological innovation.

Despite the analysis, Contreras defended the jurors as they were ordinary citizens who were prevented from working their jobs while spending weeks listening to a trial between multibillion dollar companies.

“That’s why one can’t really blame the jurors. Jurors earn just a few dollars a day and often suffer consequences at work and home during such extended trials. So overall, the system is not fair to them or to the litigants,’’ he said.

Samsung and Apple will meet on Dec. 6 for a hearing in front of Koh. The federal judge will discuss a wide array of post-trial issues between the two companies. Apple is seeking a complete sales ban on some Samsung products in the United States, while the Korean firm wants a fresh trial.

Contreras, now a professor at the American University’s Washington College of Law, made an interesting point on the ongoing fight between the two consumer electronics giants.

According to him, Apple wants to inflict a financial burden on its rival. “At first I think Apple simply wanted to keep Android phones off the market. But I think that goal is no longer realistic and Apple seems to have accepted that fact as evidenced by the settlement with Taiwan’s HTC.’’

HTC settlement good news for Samsung

Despite HTC’s settlement with Apple, Contreras said it’s not clear whether Samsung will negotiate with Apple because the $1.05 billion damages award is too big.

“The verdict against Samsung probably represents a major obstacle to a settlement, however, in the end I would see a settlement as the most beneficial outcome for the market and the parties,’’ he said.

He stressed that HTC’s settlement with Apple is good news for Samsung as he believes that it is evidence that the iPhone maker is ready to talk with the Google Android alliance.

“Apple’s intention is not to use its patents to attempt to monopolize the smartphone market. This is good news for Samsung. But because we don’t know the terms of the HTC settlement, therefore it is hard to say whether there is a commercially-reasonable settlement in the future for Samsung,’’ the NCLS chairman said.

In a related note, Apple recently agreed to limit the term of one of the patents it used to win the verdict against Samsung.

The U.S. consumer electronics giant has filed a “terminal disclaimer’’ with the patent office, meaning Apple agreed to limit the term of patent D’677, a patent that 12 different Samsung phones were found to infringe.

The global technology industry is seeing more patent litigation with more appeals and Contreras agreed the trend is prevalent and according to his observations, it has reached a peak.

“Apple-HTC has settled. Apple-Motorola is more or less dead. Microsoft-Motorola is in trial now. So, within a couple of years, the dust may settle on the current patent wars and we’ll see what has really happened,’’ he said.

Some critics say Apple is an “innovation killer.’’ But Contreras disagrees as he believes the litigation issue between the two companies really is due to the patent system not the companies.

“Consumers love both Apple and Samsung products. The problem really lies in the patent system. The system allowed Apple to obtain patents that, in truth, are too broad. Apple’s patents in the case cover some broad functions that, in my view, don’t necessarily reflect a true ‘invention’ by Apple, but merely a technical function that could be accomplished in many different ways,’’ he said.

“I don’t believe that the patent system was intended to allow protection of these broad concepts without reference to a true technological advancement. Apple is clearly a technology innovator, but the patents that it was granted extend beyond its technological innovation to cover broad product features that anyone should be able to implement in their own way.

“Forcing competitors to find new ways to implement desirable features results in innovation and improvement but blocking competitors from implementing those features in any manner whatsoever is not good for the market or technical innovation.’’

Korean firms should obtain U.S. patents

In advice to Korean companies seeking to prevent pricey patent litigation, Contreras simply said they should obtain U.S. patents for increased leverage.

Citing Samsung’s strengths in related patents in the United States, the NCLS co-chairman said: “In addition to challenging the broad patents that have been issued already, Korean firms should participate in and take advantage of the U.S. patent system themselves. Obviously, firms such as Samsung are already major patent holders in the U.S. But smaller Korean firms should consider this strategy as well. Obtaining U.S. patents gives a firm bargaining leverage when it is time to negotiate a license agreement with a large player such as Apple.’’

According to the professor, the Samsung-Apple patent war is teaching lessons to the entire technology sector and more importantly, companies need to be very cautious and clever about patent rights.

“While some of Apple’s utility patents may be overly broad, Apple’s design patents are pretty clear. Samsung could have avoided these without too much difficulty, and other firms can as well. Thus, making products that are slightly different in shape, size and color are all that’s needed to avoid most of the design patents, trademark and trade dress claims that Apple successfully asserted against Samsung,’’ he said.

Regardless of the court decision, Apple said the surface design of its devices is unique and patented.

But Contreras doubts its claim. “ Apple’s vaunted designs don’t even seem very important to consumers, as most people immediately buy a cover for their iPhones that looks nothing like the original, sleek Apple design.’’

Samsung spokesman Park Han-yong declined to comment on the ongoing court battle. <The Korea Times/Kim Yoo-chul>