Decision in SK Apple-Samsung Case Could Mold the Shape of Verdicts to Come
As a jury mulls the outcome of Apple's and Samsung's patent case in California, a South Korean court has issued a split decision in a similar case. While jury trials like the one going on in the U.S. tend to favor one party over the other, "I have little doubt if [jurors] figure out they have the option of doing what Korea did, that would be an easy out for them and they'd likely take it," said analyst Rob Enderle.
08/24/12 11:14 AM PT
While a verdict has yet to be reached in the Apple vs. Samsung court case going on in California, across the world a similar trial resulted in a split decision. A court in South Korea on Friday ruled that Apple and Samsung both infringed on each others' patents.
Judges noted that Samsung did not copy the look and feel of the iPhone, and in fact the court in Seoul ordered a partial ban on sales of iPads and some smartphones from both companies. The ruling further found that Apple infringed on Samsung's wireless technology, while the panel found that Samsung violated Apple technology -- notably the "bounce-back" feature when scrolling on touchscreen devices.
Both sides were ordered to pay limited damages ranging in the tens of thousands of dollar -- paltry sums for the two tech behemoths.
And while South Korea is not a big market for Apple -- and is a large one for Samsung, which is based in that country -- the verdict is being closely watched as a possible preview of case unfolding in San Jose, Calif.
"Whether South Korea will be similar to California is the question everyone is asking. That verdict was telling," said telecommunications analyst Jeff Kagan. "Both sides infringed on the other's patents."
Apple and Samsung did not respond to our request for further details.
Home Field Advantage?
How does the fact that South Korea isn't much of an Apple market play into this? And could the same sort of "home town" favoritism be repaid in San Jose?
"There should be no home town favoritism with regards to the law," added Kagan. "The law should prevail. What actually happens, we'll just have to wait and see. My guess is California will be similar to South Korea. If they cannot settle this on their own, then both will win and both will lose.
"When it's all done things will not really affect the customer," said Kagan. "It's just moving chairs around on the deck of the world's biggest cruise ships."
The case in South Korea could just as likely be seen as a sideshow rather than a portent of the bigger show in California. But it also suggests that those in the court are upset that the parties have been unable to find a way of resolving these matters other than bringing them to trial.
"In this case the split decision suggests frustration in that court, which is shared by the ITC and California courts," said Rob Enderle, principal analyst at the Enderle Group. "The Korean court showcased a likely out because if the other courts find against both parties, they will have to negotiate a settlement or effectively go out of business in the U.S., which neither of them can afford."
"This is much more risky for Apple, though, as Samsung really doesn't do many tablets, and it sells TVs and appliances, which would remain untouched," he added.
However, the trial in the U.S. could be different, as it isn't left entirely up to judges to decide.
"Jury trials tend to favor one company over another, though, so unless they get wind of the Korean move, this jury is more likely to find for one company, and I think Apple is favored here," emphasized Enderle. "But I have little doubt if they figure out they have the option of doing what Korea did, that would be an easy out for them and they'd likely take it."
Another question is whether any middle ground can be found by the two companies. At present it doesn't appear likely, as both sides dig in for what promises to be a lengthy war.
"The grandiose scorched earth strategies of embargoes and other tactics brought about by these suits seem unlikely to be upheld," said Chris Silva, industry analyst for mobile at the Altimeter Group. "(This) is an outcome that allows progress to resume in mobile technology and customers to get the best possible product. Anything short of that is a step backward for mobile tech that will have effects on technology for some time."
Innovation at Risk
Moreover, given that these two parties are going for an all-or-nothing strategy, could they be willing to risk a so-called nuclear option? And what does this mean for the future of mobile phone and tablet development?
"The legal actions in question are a sideshow distracting players from how they'll build the next mobile experience," Silva told MacNewsWorld. "As more resources get caught up in legal battles, other competitors would be smart to fill the innovation void it leaves."
"This is reminiscent of the resource-intensive battles pitched by RIM, Suse and countless others in the past," he added. "Those cases were predicated on protecting existing technology, while others focused on business models and solutions that ultimately usurped these firms. When companies choose a courtroom over the free market to protect leadership, I'm forced to ask whether the plaintiff's better days of innovation aren't behind them."