Samsung Grudgingly Agrees to Write Apple a $548M Check

Samsung and Apple last week filed a court document indicating the companies had come to an agreement under which Samsung will pay Apple US$548 million toward partial resolution of an epic legal dispute. At the heart of the conflict were Apple’s allegations that Samsung effectively had stolen the technology behind certain key iPhone features for its own competing devices.

The companies filed a joint case management statement in U.S. District Court in Northern California outlining the agreement, in which Samsung said it would pay Apple within 10 days of receiving an invoice for the damages.

However, Samsung made it clear in the filing, and reiterated to the E-Commerce Times, that it reserves the right to take a second bite at the proverbial Apple in the dispute, as it considers itself eligible for a partial refund and ultimately may appeal to the U.S. Supreme court.

Apple Protects the Shield

In a $2.5 billion lawsuit filed in 2011, Apple alleged that Samsung copied certain design elements and features from the iPhone and IPad and used them in its line of Galaxy phones and tablets.

A jury awarded Apple $1 billion in 2012, finding that Samsung had used Apple’s patented tap-to-zoom technology, but the court subsequently reduced the damages.

Further, “the U.S. Patent and Trademark Office found some of Apple’s patents to be invalid,” noted Samsung spokesperson Danielle Meister Cohen.

“We are disappointed that the court has agreed to proceed with Apple’s grossly exaggerated claims regardless of whether the patents are valid,” she added.

“While we’ve agreed to pay Apple, we remain confident that our products do not infringe on Apple’s design patents,” Cohen maintained, “and we will continue to take all appropriate measures within the legal system to protect our products and intellectual property.”

Samsung has a deadline to meet in mid-December over whether to take the part of the case that dealt with design patents to the U.S. Supreme Court, according to patent expert Florian Mueller.

“That one will raise an issue that stands a reasonably good chance of being heard by the Supreme Court,” he told the E-Commerce Times, “and further down the road, if Apple’s pinch-to-zoom related patent is declared invalid after all the appeals have been exhausted, Samsung might seek a refund as well.”

A Legal Mess

The case has dragged on way too long, with the legal melodrama beginning to overtake the essential facts being argued, suggested William Stofega, mobile analyst at IDG.

“For all the time and money [Apple] has put forth, they haven’t gotten a lot back,” he said. “It’s starting to look like a pyrrhic victory.”

On the other hand is the argument that the dispute cuts to the heart of U.S. patent law.

The framers of the Constitution afforded inventors exclusive rights to their inventions, observed Alexander Poltorak, CEO of General Patent.

Apple contended all along that Samsung stole patented design elements and features of the iPhone, and the court initially issued a permanent injunction, he pointed out.

However, an appellate court overturned it.

“This raised the question about the very nature of our patent system,” Poltorak told the E-Commerce Times. “If a patent is no longer the right to exclude, what is it? Are we moving away from the traditional U.S. patent regime with strong exclusionary right, as mandated by our Constitution, to the European-style compulsory license regime?”

Evidence in the case clearly showed that Samsung violated Apple’s patent, so the appeal essentially will deal with the fairness of the damages, said Peter Vogel, a patent attorney with Gardere Wynne Sewell.

“I think Samsung realizes the likelihood that they will lose the current case on appeal,” he told the E-Commerce Times, “since the only real debate is that the damages Apple won are too high.”

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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