Samsung mum on Apple ahead of critical rulings

It seems that Samsung Electronics is beginning to mince its words about its high-profile intellectual property fight with Apple ahead of crucial rulings in Germany.

It was just months ago that the Korean technology giant had expressed bullishness in its legal battle with Apple, which doubles as its friend in parts but foe in finished products, but a series of setbacks against the California-based juggernaut appear to have injected humility.

“I can’t talk about anything related to Apple. I will say for sure that Samsung has prepared a very sophisticated strategy to handle the litigation issues,’’ Samsung CEO Choi Gee-sung told reporters Tuesday.

Choi Gee-sung Samsung CEO

Choi sounded a lot brasher just a month ago on the sidelines of the Consumer Electronics Show (CES) in Las Vegas, when he described the two companies being on an equal footing and forecast them reaching a compromise, such as a cross-licensing deal.

“Samsung is a big firm, and Apple is also. Samsung should respect Apple, while Apple also should respect Samsung,’’ he said.
Choi shying away from bold comments now could be an indicator that Samsung is worried about Apple winning the legal dispute outright.

Since Apple accused Samsung last year of “slavishly’’ copying the feel and looks of its iPhones and iPads in its Galaxy series of smartphones and touch-screen tablets, the two companies have stockpiled 30 lawsuits in 10 countries.

The fight isn’t over, but the early rounds clearly went to Apple. Consecutive court rulings in Germany last month ruled against Samsung’s claims that Apple infringed on its patents for smartphones and third-generation (3G) communications technologies.

And to add assault to injury, European Union regulators launched an investigation of Samsung to determine whether it breached antitrust rules by using its patent rights to distort competition in European mobile device markets.

It was in April last year when Samsung filed complaints with the German court claiming that Apple was unlawfully using three of its communications technology patents.

The decision on the third front of the dispute will be made on March 2, which may prove to be the most critical outcome in the dispute yet.

Samsung’s war chest for its legal action against Apple was recently increased from $200 million to $250 million, according to company officials.

“Our legal teams are in a difficult situation as they struggle to tackle new uncertainties,” admitted one Samsung senior executive.

“Still, the company wants Apple to pay in the range of several billions of dollars for using our wireless patents, so a lot of money is on the line. Our legal experts are closely studying the possible effect of Apple’s recent legal victory against Motorola and are ready to go the distance. Still, a cross-licensing deal remains as one possible scenario.”

“The upcoming ruling in Germany is critical. If the results favor Apple, than Samsung will be forced to strengthen our action to sign a peace treaty with Apple as our other lawsuits are based on similar arguments,” he said.

Tim Cook Apple CEO

Apple’s win in a patent dispute against Motorola Mobility in a German appeals court has allowed it to keep selling iPhones and iPads online.

The ruling was influenced by new Apple CEO Tim Cook’s willingness to be more flexible with patent licensing, according to analysts.

“Motorola was hoping to gain near-term leverage against Apple and Microsoft through the aggressive pursuit of injunctive relief based on standard-essential patents,” said Germany-based patent expert Florian Mueller.

While Choi was coy about Samsung’s path of action, Shin Jong-kyun, the head of the firm’s mobile devices division, claimed that the company won’t rush to compromise with Apple.

Samsung has been closing the smartphone gap with Apple significantly in recent months. It plans to sell over 230 million of its Galaxy-branded smartphones by the end of this year, which would more than double last year’s sales.

The company plans to sell around 380 million mobile phones this year.  “In a way, I think the fight with Apple has benefited Samsung’s brand,’’ said another company source.

“Now, global consumers think that Apple sees Samsung as its biggest threat in mobile Internet devices. So it could be foolish for us to compromise quickly with Apple and risk facing other legal fights with opportunistic rivals or even ‘patent trolls.’ This fight could become lengthy,” he said.

Fitch Ratings said in an earlier interview with The Korea Times that the two companies could potentially reach a stalemate where neither sees the benefit in continuing legal action, leading to some kind of cross-licensing agreement.

“Samsung is closely monitoring the upcoming rulings from Germany. But we can’t comment on this officially at this time,” said a Samsung spokesman.

Apple Korea spokesman Steve Park offered a predictable “no comment.”

Samsung is going to supply its advanced mobile application processors and flat screens to Apple’s upcoming iPhone 5 and iPad 3 and the two companies were in detailed talks over contracts including points such as pricing and product commitment, said officials from Samsung and Korea-based parts suppliers.

Apple is a critical customer of Samsung, buying processors, LCDs and NAND flash memory chips from the Suwon-based outfit.

While Samsung wouldn’t want to lose Apple’s business, Apple would find it difficult to find other suppliers that could provide the volume it requires. <Korea Times/Kim Yoo-chul>

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