Apple Inc. v Samsung Electronics Co. Ltd.

Breach of Intellectual Property Rights

The Complaint The case began when Apple issued an official complaint on April 15, 2011, stating: "Instead of pursuing independent product development, Samsung has chosen to slavishly copy Apple's innovative technology, distinctive user interfaces, and elegant and distinctive product and packaging design, in violation of Apple's valuable intellectual property rights." The interesting thing about the complaint brought forth by Apple is its wording. Apple took as much issue with Samsung lifting design elements from their brand, as they do with the core design of its operating system Android. Notably this greatly increased the significance of this case, potentially making this case as much about Google as it is about Samsung. Trade Dress Infringement: Apple introduces a number of trade dress infringement claims under 15 U.S.C.1125 and 15 U.S.C.1114. Trade dress is a form of intellectual property that basically refers to the visual aesthetics of a product or packaging, including design elements, that signify the source of the product with consumers. Basically meaning any iconic visuals that spur brand recognition with the consumer, such as Apple's use of the prefix 'i' in their products (i.e. iPhone, iPod). Namely this law is in place to protect the consumer from being confused into thinking that a product has affiliation with another brand or company. If you take a look at the case, which can be found here, it's apparent that some of these individual claims are bizarre. For example, it's unlikely that Apple will try to sue everyone who uses a tray that cradles their product so that it's visible when opening the packaging. However, the important thing to understand is that the court will be

looking at these claims collectively; deciding if the overall appearances of Samsung's products (hardware, software, and packaging) are intended to create a connection between Apple products. Additionally it's worthwhile to note that Apple has a stronger claim with their second and third trade dress claims than their first, due to the fact that they have already established patents for the elements that are addressed in the claims. This means that Apple has already convinced the US Patent and Trademark office that these elements are distinctive and protectable. Again, it all comes back to whether or not the design of Samsung's products could confuse the average consumer into thinking that they are Apple products.

Infringement of design patents In addition to the three prior trade dress claims, Apple also makes a number of design patent claims that act somewhat similar to the previous claims made. The major difference between the trade dress claims and patent claims is how they are legitimized, but regardless, both claims ultimately raise the same question: is the protected device similar enough to the product in question that it could potentially trick the consumer into thinking that there is a connection between the two? This question while grossly oversimplified is what the majority of the case will revolve around, especially the portions that specifically target Samsung's designs. Additional Patent Claims While the majority of the case revolves around Samsung's designs, Apple has issued a number of claims that deal with more technical claims revolving around Android-related content. Most of these claims are related to small technical applications, but the major claim of course is the one

concerning patent concerning user interface: "the universal interface for retrieval of information in a computer system". Damages On July 24, Apple released information that outlined the proposed damages of Samsung's alleged patent infringement at $2.5 billion. This would cover what Apple estimates are $500 million in lost profits, about $2 million form Samsung's unjust enrichment, and $25 million for other reasonable royalty damages. These damages are also apt to grow if Samsung is found to have willfully infringed the patents, and Apple argues that Samsung chose to compete by copying Apple. If Samsung is found guilty of infringing patents, one of two things could happen. Either Samsung would be forced to stop selling the products that use the infringing elements or Samsung would have to license these patents from Apple. If the latter is the case, Apple is asking anywhere from $2.02 per unit of "over scroll bounce" techniques to $24 for more in-depth patents. There is also a great deal of risk involved for Apple as well. If Samsung is to win its counterclaim it could potentially cost Apple billions of dollars in licensing fees and force them to remove products off their shelves. While this is unlikely, it certainly is not out of the realm of possibility. Here is a look at the good, the bad, and the sad related to this case.

Apple's victory is a victory for every inventor and innovator. Patent protection is a very complicated blood sport and, when the system works, it promotes investment and risk taking, and it protects the associated rewards. Many patented inventors were thrilled that Apple went after a copycat and successfully defended its intellectual property. While it's true that most patents are only as powerful as the entity that owns them, the jury found that this patent

infringement was conspicuous, if not obvious. If Apple did not win, it would have been a huge blow to the belief of patent protection.

Several of technology experts have cautioned that Apple is a huge company and its open use of lawsuits as a competitive tool is unwarranted, unsportsmanlike and unnecessary. But we disagree with that. If we were Apple, we would defend our intellectual property to the full extent of the law. It is the only path that makes sense. This is an important victory for everyone who has ever gone through the remarkably painful process of writing a patent claim. Everyone should congratulate Apples legal team for a big win against Samsung.

Samsung offers some extraordinary alternatives to internet and electronic devices. Most run Google's Android operating system and, at the moment, most of the products like the Samsung Galaxy S III are technologically superior from a features point of view to their Apple counterparts. There was a very good chance that the judge would have ruled that Samsung must stop selling some of the products that were the subject of the lawsuit. Two bad things would occur. Samsung engineers would have to scramble to remove the infringing intellectual property, so they would not have time to innovate; and substandard products from other manufacturers would probably fill the gap. But thankfully the ruling was not too hard on Samsung and they did not suffer these consequences.

This point of view should not be taken the wrong way. We should applaud Apple's victory, but depending upon how the judge could have ruled, this could have been very messy for consumers.

The sad news is that every smart phone and tablet that has a full glass screen looks like an iPad or an iPhone. Apple's design patent portfolio is pretty complete and, if a smart device looks like an iDevice, the company going to be in trouble. What is worse is that Apple obviously has

defensible patents around finger gestures and Apple is very unlikely to license any of its IP. We will look at the reasons of why should it be.

The fact is that Apple has innovated, pioneered and succeeded where dozens of others have failed. It created the modern concepts of a smart phone and a tablet and has the law on its side. Every consumer electronics company has just been put on notice. They should either innovate or die. If they do not invent their own, new, unique, patentable smart phone and tablet, Apple will wait until exactly the right moment, sue them, and win.

Actually, we should not be sad about this at all, but all must be wondering if Samsung lost this case because it created products that were inspired by Apple's. All must also be wondering if it lost because, during the discovery phase of the trial, Apple was able to show that Samsung executives documented their desire to copy Apple product features.

This may sound like a trivial issue, but it is not actually. Steve Jobs allegedly called Android a stolen product but this case was not against Google. All are intrigued what was stolen, and what did Apple products actually inspire. This is a food for thought as the battle for control of our connected lives continues among various big companies in the market.

The conclusion according to us is it is all around alert for Samsung, Google and all the other device makers whose products are powered by the Android operating system. A warning shot has been fired, and Apple's competitors will be extremely wary of creating any device that even vaguely resembles an Apple product. So we can expect to see more fighting between Apple and Samsung ahead in future.

And Apple fans aside, the verdict is a bad news for smart phone buying public who could see fewer smart phone choices on the shelves and higher prices for the ones still there, as Apple and

smart-phone makers start signing licensing agreements to use patents. Samsung could be forced to pull products that were found to step on Apple's intellectual property.