Apple wins patent infringement case; Samsung to pay $1.05 billion in damages

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Apple won a sweeping victory in its landmark patent dispute against Samsung when a Silicon Valley jury ruled Friday that a series of popular smartphone and tablet features -- from the rounded rectangle shape to the way screens slide and bounce to the touch -- are proprietary Apple innovations.

The nine-person jury overwhelmingly sided with Apple's claims that Samsung had infringed on valid patents when it copied those and other design elements while seeking to compete against the wildly popular iPhone and iPad. The jury rejected claims that Apple had infringed on several of Samsung's patents.

Damages totaled $1.05 billion -- less than half of the $2.5 billion that Apple requested -- but the impact on Samsung's business practices and those of other electronics manufacturers stands to be more profound if the ruling survives a likely appeal.

Together, Apple and Samsung control more than half of the fast-growing smartphone market, and both are major players in tablets, as well. The ruling has no immediate effect on the sale of either company's products, but Apple has requested injunctions against the sales of products found to infringe on its patents.

"While a billion [dollars] is significant, Samsung has the balance sheet to cover it," patent lawyer Demetrios Anaipakos said. "What's more substantial is an injunction. If Samsung is required to pull devices off the market, that will be much more expensive."

The speed and decisiveness of the ruling, which came after just three days of deliberations, startled observers who had been bracing for a long wait, as the jury worked its way through an uncommonly detailed set of questions involving several features and dozens of individual devices.

The jury found infringement by Samsung in six of seven patents raised by Apple in the suit. In five cases, the infringement was willful, the jury said. Shares of Apple, already the most highly valued U.S. company, jumped in after-market trading on news of its victory.

"Today's verdict should not be viewed as a win for Apple, but as a loss for the American consumer," Samsung said Friday night after the ruling. "It will lead to fewer choices, less innovation and potentially higher prices. It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies."

Apple had no immediate comment.

The ruling could lead to higher licensing fees, which companies pay one another to use proprietary technology. Such higher costs could eventually raise consumer prices and send more profits to Apple, should it choose to license its technology.

"Clearly, Apple is the winner here in financial terms, with things coming from licensing down the road," said Al Hilwa, a technology analyst with International Data Corp. He predicted that the net effect would be price hikes for consumers. "Someone has to swallow these licensing fees," he said.

Mr. Hilwa said Apple's victory also stands to raise the value of patents held by other companies, including Microsoft and Research In Motion, maker of BlackBerry devices, whose fortunes have fallen as swiftly as the iPhone's have risen. Many companies have been buying up vast troves of patents in recent years, both to prepare for legal battles and to collect licensing fees, should the patents hold up in court.

A subtext throughout the federal case was the nature of innovation itself. Apple submitted evidence showing internal Samsung communications in which executives openly fretted about the iPhone's design advancements. Samsung countered with arguments that consumer product manufacturers routinely adopt each other's best ideas, and that some iPhone features were pioneered on devices from other manufacturers, including Samsung itself.

Analysts had predicted that a Samsung victory might have caused future generations of smartphones, tablets and other electronic products to increasingly mimic Apple products, because rival manufacturers would feel freer to appropriate popular features. Instead, Apple's victory, if upheld, will make other companies wary of hewing too closely to the look and feel of its devices.

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