Honorable Judge Koh, it’s your call!

Dec. 6 may mark watershed in Samsung-Apple patent battle

U.S. Federal Judge Lucy Koh will hold a hearing on the patent dispute between Apple and Samsung Electronics on Dec. 6. She may rule on a $1.05 billion verdict by a jury for Apple. Her decision will most likely reflect a great deal of attention from experts to consumers including criticism for a flawed jury foreman selection, debate over whether it is appropriate to adopt a jury of ordinary people for this kind of complicated issue and a philosophical review of patents.

Samsung is seeking a new trial, while Apple wants a complete sales ban on the Korean firm’s products.

Koh confirmed she will re-examine the jury foreman’s alleged misconduct, while the U.S. patent office recently nullified Apple’s bounce-back patent. One of Apple’s clear sweeps in the August verdict was that all Samsung phones were found to infringe the bounce-back patent. ― ED.

Apple hits jackpot with Hogan

Florian Mueller, who runs patent blog of Foss Patents, said Apple hit the jackpot with jury foreman Velvin Hogan.

Mueller, a competition-focused intellectual property activist-turned-consultant with 25 years of industry expertise, stressed that the foreman was against Samsung.

“There’s no question that he’s very pro-patent in general,’’ Mueller said in a recent interview with The Korea Times.

He continued: “He holds software patents that some people in the Internet believe are of questionable validity. There was nothing that Samsung’s lawyers could do about him based on the answers he gave at the time of jury selection, but if he had fully revealed his inclinations and perspectives, and I’m sure he should have been excluded.”

The patent expert was, however, negative on the chances that Koh will overturn the verdict.

But he thinks Apple obviously has more to lose at this stage. “We may actually see adjustments in favor of both parties and I think adjustments are likely,’’ he said.

“I believe that Koh will take the damages amount below $1 billion because the jury made at least one very obvious mistake, awarding Apple a disgorgement of Galaxy Prevail profits, which is contrary to law because that particular device wasn’t held to infringe any design patent and disgorgement is available only for design patents, not for software patents.’’

Mueller advised Koh to give up hopes of a near-term settlement. “If anything can put the parties closer to a settlement, it will be rulings, rulings, and even more rulings in California and the rest of the world, the sooner or better.’’

But according to Mueller’s observation, Koh has done everything humanly possible to preside over the Samsung-Apple litigation fairly.

“This dispute has been and continues to be a major challenge for her because all the noise and the aggressive tactics of both parties’ lawyers.’’

Galaxy should cost $2 million

Brian J. Love, a patent law specialist and professor at California’s Santa Clara University School of Law, urged Koh that she should think long and hard about just how complex a smartphone really is.

“Some have estimated that smartphones are covered by about 250,000 U.S. patents. In this case, Apple has proven infringement of just six. Are those six tiny contributions really worth $48 per phone?’’ he questioned.

“If all 250,000 patents were valued at the same amount, Samsung would have to charge the ridiculous price of $2 million per phone just to break even,” Love said in a recent interview.

And Love continued in a stronger tone, “Is it really in society’s best interest to ban the sale of infringing phones simply because they incorporate the technology described in these six patents?

“Can Apple credibly claim that consumers value these six features so highly that, but for infringement, most of Samsung’s customers would have purchased Apple phones instead? Is the market share that Apple lost to Samsung really attributable to these six patents, which represent a tiny handful among thousands of others? Judge Koh must answer these questions, and I would urge her to take into consideration the sheer complexity of these devices when doing so.’’

According to his observations, patent rights only benefit society when they encourage innovation that wouldn’t otherwise have taken place.

“Can Apple credibly claim that it would not have entered the smartphone market, where it is presently enjoying 50 percent profit margins even with competition from Android manufacturers, had it not been able to obtain these broad patents? I think the answer is no.”

Love agreed with Mueller that the jury foreman Hogan misunderstood many aspects of patent law.

But the professor said Samsung’s chances of overturning the verdict on this basis are slim.

“Evidence that the jury misunderstood the law, or even failed to pay attention at trial or to the judge’s instructions, are usually insufficient to overturn a verdict as U.S. rules of evidence makes its quite difficult to throw out a verdict on the basis of what went on during the jury’s deliberations.’’

Love expects large patent damages awards to be thrown out after the trial with some regularity.

“A recent verdict against Blackberry-maker RIM that came to $8 per infringing phone was recently overturned by another federal judge in California. The verdict against Samsung is similar in size, about $8 per phone per patent found to be infringed.’’

Verticts subject to change

Samsung is also involved in legal battles with Apple in Europe.

A patent specialist from the Netherlands said the U.S. patent office’s recent decision to nullify Apple’s bounce-back patent will help the Korean firm.

“The decision gives legal weight to Samsung’s argument that some Apple patents were initially granted in error,’’ said de Wit, a former deputy judge in patent cases at the District Court of The Hague, in a recent interview.

The IPEG founder continued, “As it goes in many global patent disputes, the longer the legal worldwide battles go on, the more holes are made in a party’s patent position. Patent fights become a jigsaw, leaving both parties at odds what the final result of the patent battle brings them.’’

IPEG is Europe’s first intellectual property-related merchant banking and strategy firm located in The Hague.

He made one interesting point, though the point was quite general.

“It’s my impressions that most jury awarded damages are later overturned or dramatically lowered by judges or courts in the United States. In this highly-visible and hugely public patent battle, big numbers like the jury award of over a billion dollar bodes well for the generally laymen pubic that follows this titanic struggle.”

“In general, I cannot believe that a technology giant like Samsung who has done so remarkably well in the market for consumer electronics where other companies like Sony and Philips, Nokia and others have failed to maintain market momentum should ever be called a copycat.’’

When asked why Apple is fighting with its top supplier and on the possibility of a settlement, de Wit said, “Settlement is unlikely as the price would simply be too high.

“There is a risk for Apple though. The initial drive behind the fierce global intellectual property fight was for Apple to draw a line in the sand, to show that it would not accept any party to go beyond sound competition by `copying’ its main features and what they believed to be their hard fought innovation. The more the battle starts to resemble an Emmentaler cheese, the less effective Apple’s efforts to draw a public image of Samsung as the copier and Apple to be the innovator, will stick in the public mind.’’

Jury not supposed to send message to Samsung

American Antitrust Institute advisor (AAI) Michael A. Carrier literally blamed the jurors saying, “It seemed that the jury wanted to send a message to Samsung. But it is not supposed to do that. It’s only supposed to compensate Apple for damages it suffered from infringement.’’

Carrier, also a patent professor at at Rutgers Law School-Camden in the United States, believes it is possible for the August verdict to be thrown out completely but only if it is proved the jury applied the law incorrectly.

The AAI executive isn’t too different from Mueller, Brian Love and Severin de Wit in his view that the jury foreman’s unprofessional and one-sided prejudice influenced other jurors.

“The jury foreman Hogan didn’t apply the law, correctly,’’ Carrier said in a recent interview with The Korea Times

“He apparently explained to the jury that the issue of prior art depended on interchangeability, but it actually doesn’t ― the law asks if the invention was new and not preceded by sources such as earlier patents, publications, uses, and sales.’’

According to his observations, Samsung is too powerful a competitor to settle right now, though Taiwan’s HTC came to an agreement with Apple to end their patent war.

“Apple and Samsung probably feel that there have too much at stake now to settle and aren’t willing to give up much until more courts weigh in on those issues.’’

When asked about the leadership of Apple’s new CEO Tim Cook, the Rutgers professor said he may not wish to continue the smartphone patent war if Apple is blocked from certain markets.

“I would say Judge Koh should very carefully evaluate the jury’s verdict and statements of the foreman to decide if the verdict should be allowed to stand.’’

Apple feels betrayed by Samsung

Horace Dediu, a business analyst and founder of the influential Asymco blog, insists Apple feels betrayed by Samsung Electronics ― the main reason why the Cupertino-based firm initiated the court battle.

Dediu, a Romanian-American independent analyst who has a track record in breaking Apple-related news, said the U.S. firm’s large parts orders woth Samsung allowed the Korean company to build its capacity to produce and generate a plan for new product development with a clear years-ahead view of where the opportunity in smartphones lies.

Concerning controversy surrounding the jury system in the United States after Judge Koh’s confirmation she would re-examine jury foreman Hogan’s alleged misconduct, the analyst said, “I consider litigation to be arbitrary and unpredictable and not something that should be used in formulating strategy.’’

The Harvard-educated Dediu stressed there’s no way to judge the use of litigation.

“As someone said, war is negotiation by other means. Litigation is negotiation by other means,” he said in a recent interview.

According to his analysis, the iPhone maker wants to deter its partners from competing with it and stressed innovation varies infinitely in scale and scope.

“Litigation doesn’t impede innovation but may cause innovation to change form or direction.

“The outcome affected only who makes the profits,’’ he said simply.

The analyst praised Samsung for its faster shift to smartphones from feature and budget phones.

“They went from having 3 percent of their handsets being smartphones to 50 percent in two years. This switch was very impressive and was a commitment that even Nokia could not make. Samsung also has the capacity to produce these phones while it spent $11 billion on advertising.’’

Reform of jury system may be useful in US

Jorge L. Contreras, co-chairman of the National Conference of Lawyers and Scientists (NCLS), said the ongoing court battle between the two companies is certainly an example in which a reform of the jury system in the United States might be useful.

Contreras, also co-chairman of the American Bar Association Section of Science and Technology Law’s Committee on Technical Standardization, stressed that Koh understands the weakness of the jury system and added she has some very important decisions to make.

“She has heard about the allegedly improper behavior in the jury chamber. Thus, she should use her authority to review the jury verdict in a wise and reasonable manner. Where the verdict doesn’t make sense, she can seek to reform it. Where the jury seems to have failed to consider important issues such as patent validity, she can consider them,’’ according to the law professor from American University’s Washington College of Law.

But he was also pessimistic on Koh completely rejecting the August verdict.

“Given Koh’s comments about the administrative burden of the original trial, I suspect that she will do everything possible to avoid declaring an outright mistrial, though she could modify the jury damages award or verdict in some way that would help Samsung,” Contreras said in a recent interview.

The NCLS executive said Samsung could have avoided Apple’s design patents without too much difficulty as some of its utility patents may be overly broad.

“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. 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,’’ Contreras said. <The Korea Times/Kim Yoo-chul>