Apple Jury Will Be First in U.S. to Weigh Samsung Fight

Apple Inc. (AAPL)’s $2.5 billion patent- infringement lawsuit against Samsung Electronics Co. (005930) began today in federal court in California with selection of the first U.S. jury to consider the global smartphone dispute.

U.S. District Judge Lucy Koh in San Jose, who practiced as an intellectual-property litigator in Silicon Valley for eight years, is presiding over the trial. Jurors will decide each company’s claims that its rival infringed patents covering designs and technology for mobile devices, with potential damage awards reaching billions of dollars.

Koh interviewed potential jurors to determine whether they harbored any bias that would prevent them being impartial in the case. No jurors were selected or questioned by lawyers for the companies by the time Koh dismissed them for lunch. Both sides told Koh they planned to use almost 1.5 hours for opening statements, increasing the chance they won’t begin until tomorrow.

The case is the first U.S. jury trial of a battle being fought on four continents for dominance of a mobile-device market that Bloomberg Industries said was $312 billion last year. Apple, the iPhone maker based in Cupertino, California, just 11 miles from the courthouse, won’t benefit from any bias from a jury drawn from Silicon Valley, said Stanford Law School Professor Mark Lemley.

Valley People

“Just as many people in the valley work for Android companies like Google as work for Apple,” Lemley said in an e- mail, referring to Google Inc. (GOOG)’s Android operating system that some Samsung products use. “I expect that a Silicon Valley jury will be more technologically sophisticated than most, and that may work in Samsung’s favor.”

Four jurors have been dismissed. Koh said she would reject a request by William Lee, a lawyer for Apple, to dismiss for “for cause” another juror who said he owns shares in Google.

“His credibility, as far as I’m concerned, I believe it when he says he can be fair and impartial,” Koh said, noting that the juror said his family owns many Apple products. “For right now he’s been solid that he can be fair and impartial, so he’s staying on,” Koh said.

Samsung, based in Suwon, South Korea, has countersued and will present claims that Apple is infringing two patents covering mobile-technology standards and three utility patents. Samsung is demanding royalties of as much as 2.4 percent for each device sold, according to a court filing.

‘Rectangular Body’

Samsung said in a court filing that it plans to show jurors evidence that in 2006, before Apple’s January 2007 introduction of the iPhone, Samsung was developing the next generation of mobile phones, envisioning “a simple, rounded rectangular body dominated by a display screen with a single physical button on the face.”

Apple’s $2.5 billion in damages is based on claims Samsung copied the iPhone and iPad. Apple also wants to make permanent a preliminary ban it won on U.S. sales of a Samsung tablet computer, and extend the ban to Samsung smartphones.

Koh, in a pre-trial ruling yesterday, refused to let Samsung show the jury pictures that Apple created for its internal use to demonstrate what a smartphone might look like if it were designed by Sony Corp. The decision upheld a federal magistrate’s prior ruling.

Steve Jobs

In a separate order, Koh said she would let Apple show the jury five images of the company’s founder, Steve Jobs, who died last year.

Overuling objections by Samsung, the judge said the photos are relevant to Apple’s iPhone and iPad design-patent and trade- dress claims. Their display wouldn’t cause undue jury bias, she said.

Apple is trying to deflect Samsung’s infringement claims in part by arguing that Samsung deceived the European Telecommunications Standards Institute, according to a court filing. Samsung was pushing the organization to adopt certain standards without disclosing that it had applied for patents covering the same technology, Apple claims.

In the second quarter of this year, consumers worldwide bought 406 million mobile phones compared with 401.8 million in the same period last year, according to IDC, a Framingham, Massachusetts-based information service covering consumer technology markets. Samsung and Apple shipped almost half of those phones, IDC said.

Samsung Lead

Samsung extended its lead over Apple during the second quarter, shipping 50.2 million mobile phones, representing 32.6 percent of the market, compared with 26 million units, or 16.9 percent of the market, for Apple, according to IDC.

Samsung Chief Executive Officer Choi Gee Sung and Apple CEO Tim Cook failed to settle the San Jose case at a court-ordered May 21 meeting in San Francisco. Previously, company officials met in September and December and on May 4 to discuss resolving a related dispute before the U.S. International Trade Commission.

The case is Apple Inc. v. Samsung Electronics Co. Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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