Apple, Samsung Square Off in Federal Court
Apple (NASDAQ: AAPL) and Samsung finally are going nose-to-nose in federal court in San Jose, Calif., following bitter clashes in courts in the United Kingdom and Germany over intellectual property, specifically ownership of technology and designs for mobile devices.
The lawsuit carries the usual big questions common to patent disputes — who copied whose design, who helped themselves to technology and designs not rightfully theirs, who was unjustly enriched — but this clash is more than that.
What’s at stake? Oh, only the competitive landscape of the global mobile device market, give or take a few billions of dollars in damages. Samsung, led by its hot-selling Galaxy S III, has taken clear leadership of the smartphone market, but with Apple’s iPhone 5 due in September, positions could change. Together, the two accounted for about half of all smartphones shipped worldwide in Q2 2012.
With Apple demanding some $2.5 billion in damages and Samsung looking for 2.4 percent of every iPhone sold — Apple moved 26 million iPhones in Q2 alone adding up to $375 million in damages just for those three months, according to one estimate — the financial wreckage to either company could be substantial.
Given the current wave at Samsung’s back, the spoils for Apple should it prevail at trial may transcend the immediate financial aspect of the dispute. An Apple win could halt, or at the very least, slow down the Korean maker’s product sales, a hint of which emerged last month when U.S. District Court Judge Lucy Koh ordered Samsung to stop selling the Galaxy 10.1 tablet pending the trial outcome.
In a wider sense, a verdict in Apple’s favor might swell the market for its products if buyers of Android-based devices become uncertain of the platform’s future. After all, who wants to buy a car that may be recalled? On the other hand, should the jury deny Apple, a Samsung win might open the market to an ever greater flood of Android-based products offered with a dizzying variety of features and prices.
In the past few days, some details emerged from court filings that may make the legal maneuverings in court even more interesting, such as a disclosure that Apple earns about half as much on iPads as it does on iPhones. No one knew that tidy little fact before. And, late last week, Apple won permission to tell the jury that Samsung deleted email that Apple wanted to use in trial.
In one way this legal combat is like a prize fight — true, there may be one victor and one loser and it could end in a draw — but there are other possibilities, too, including an ending in which the jury finds both companies guilty of patent infringement among other irregularities. Now that would be interesting. One thing is for sure, we’re going to learn a lot over the next four weeks.