Samsung ordered to pay Apple $1B Appeal expected in bitter patent-infringment lawsuit

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Apple's iPhone 4S and Samsung's Galaxy S III -- close cousins and hated rivals. (AHN YOUNG-JOON / THE ASSOCIATED PRESS)

SAN JOSE, Calif. -- After a year of scorched-earth litigation, a jury decided Friday Samsung ripped off the innovative technology Apple uses to create its revolutionary iPhone and iPad.

The jury ordered Samsung to pay Apple $1.05 billion. An appeal is expected.

Apple Inc. filed its patent-infringement lawsuit in April 2011 and engaged legions of the country's highest-paid patent lawyers to demand $2.5 billion from its top smartphone competitor. Samsung Electronics Co. fired back with its own lawsuit seeking $399 million.

During closing arguments, Apple attorney Harold McElhinny claimed Samsung was having a "crisis of design" after the 2007 launch of the iPhone, and executives with the South Korean company were determined to illegally cash in on the success of the revolutionary device.

Samsung's lawyers countered it was simply and legally giving consumers what they want: smartphones with big screens. They said Samsung didn't violate any of Apple's patents and further alleged innovations claimed by Apple were actually created by other companies.

Samsung has emerged as one of Apple's biggest rivals and has overtaken Apple as the leading smartphone maker.

Samsung's Galaxy line of phones run on Android, a mobile operating system Google Inc. has given out for free to Samsung and other phone makers.

Samsung conceded Apple makes great products, but said it doesn't have a monopoly on the design of rectangle phones with rounded corners it claimed it created.

The trial came after each side filed a blizzard of legal motions and refused advisories by U.S. District Judge Lucy Koh to settle the dispute out of court.

Deliberations by the jury of seven men and two women began Wednesday.

Samsung has sold 22.7 million smartphones and tablets Apple claimed uses its technology. McElhinny said those devices accounted for $8.16 billion in sales since June 2010.

Apple and Samsung combined account for more than half of global smartphone sales.

As part of its lawsuit, Apple also demanded Samsung pull its most popular cellphones and computer tablets from the U.S. market.

From the beginning, legal experts and Wall Street analysts viewed Samsung as the underdog in the case. Apple's headquarters is a mere 16 kilometres from the courthouse, and jurors were picked from the heart of Silicon Valley where Apple's late founder Steve Jobs is a revered technological pioneer.

While the legal and technological issues were complex, patent expert Alexander I. Poltorak previously said the case would likely boil down to whether jurors believe Samsung's products look and feel almost identical to Apple's iPhone and iPad.

To overcome that challenge at trial, Samsung's lawyers argued many of Apple's claims of innovation were either obvious concepts or ideas stolen from Sony Corp. and others. Experts called that line of argument a high-risk strategy because of Apple's reputation as an innovator.

Apple's lawyers argued there is almost no difference between Samsung products and those of Apple, and presented internal Samsung documents they said showed it copied Apple designs. Samsung lawyers insisted several other companies and inventors had previously developed much of the Apple technology at issue.

The U.S. trial is just the latest skirmish between the two tech giants over product designs. Previous legal battles were fought in Australia, the United Kingdom and Germany.

The U.S. case is one of some 50 lawsuits among myriad telecommunications companies jockeying for position in the burgeoning $219-billion market for smartphones and computer tablets.

During closing arguments at the trial, Samsung attorney Charles Verhoeven called that demand ridiculous and asked the jury to award Samsung $399 million after claiming Apple used Samsung Electronics Co. technology without proper compensation.

-- The Associated Press

Republished from the Winnipeg Free Press print edition August 25, 2012 B17