Apple Inc. (AAPL) and Samsung Electronics Co. (005930) made initial pitches to a U.S. jury in their global battle over smartphone patents, with the iPhone maker alleging its designs were copied and the South Korean company countering that Apple can’t claim a “monopoly on a rectangle.”
Apple’s lawyer alleged in opening arguments yesterday at a trial in federal court in San Jose, California, that Samsung infringed the touch-screen characteristics of the iPhone after it was released in 2007. Samsung’s attorney downplayed the significance of Apple’s iPhone innovations by saying other companies had received patents for similarly minimalist designs.
“As we all know it’s easier to copy than to innovate,” Harold McElhinny, Apple’s lawyer, told the jury.
The jury trial is the first U.S. in a battle being waged on four continents for dominance in a smartphone market valued by Bloomberg Industries at $219.1 billion. Apple and Samsung are the world’s largest makers of the high-end handheld devices that blend the functionality of a phone and a computer.
Each company is trying to convince jurors that its rival infringed patents covering designs and technology for mobile devices, with potential damages awards reaching billions of dollars.
Samsung’s attorney, Charles K. Verhoeven, said that while the company was “inspired” by the iPhone, he said that’s a natural part of business competition, just as each company performs a detailed analysis whenever a rival product is released.
“Being inspired by a good product and seeking to make even better products is called competition,” Verhoeven said. “It’s not copying and it’s not infringing. Everybody does it in the commercial marketplace.”
Apple’s lawyer said the similarities between its iPhone and iPad and Samsung’s smartphones and tablets go beyond that accepted practice. McElhinny showed the jury a slide depicting internal Samsung discussions about making changes to its devices to match those of the iPhone and iPad.
He also displayed photos of Samsung’s mobile phones from 2006 with physical keyboards and squared corners, and another of its phones from 2010 with rounded edges and a glass touch- screen. Samsung arrived at the newer design only after Apple founder Steve Jobs introduced the iPhone in 2007, the lawyer said.
McElhinny outlined the history and risk that Apple took in developing the iPhone, including developing a new user-interface and introducing a touch-screen glass front screen. While the device was a hit, its success wasn’t a sure thing with companies like Nokia Oyj (NOK1V), Motorola Inc. (MSI) and Suwon, South Korea-based Samsung dominating the market, the attorney said. If the debut had been a flop, it “could have ended the company’s future,” the attorney said.
One patent in dispute involves how the screen bounces back when a user scrolls to the end of a Web page or picture. Samsung adopted a similar feature for its smartphones, Apple claims. Another patent at issue covers the use of two fingers to zoom in on a picture or document, a feature that Cupertino, California- based Apple alleges Samsung copied.
McElhinny said that Samsung in June 2010 introduced the Galaxy Si9000 smartphone, the first in the Galaxy line, which he called “a complete iPhone clone.” That led to U.S. sales of 22 million mobile phones and tablet computers which generated $2 billion in “profit that they made using our intellectual property.”
In addition to being rivals, Apple and Samsung also are close partners. Samsung supplies components to Apple for semiconductors and high-definition screens. McElhinny said that business relationship led Apple to confront Samsung about the alleged infringements before filing a lawsuit.
“Apple did not sit quietly by when Samsung started infringing Apple products,” McElhinny told jurors. “Apple met with Samsung to point out that Samsung was acting illegally and demand that Samsung come up with its own designs and user interface.” That had “no positive effect,” he said.
Verhoeven disputed Apple’s claims that it’s copying, pointing to patents from before the iPhone’s release by companies including LG Electronics Inc. that show a rectangular shape and a glass screen. He also said Samsung provides 20 percent of the component technology inside the iPhone.
At the outset of his opening argument, Verhoeven showed the jury a slide showing that before the iPhone was introduced, Samsung made different types of mobile phones -- including some that he said were “rectangular in shape, with rounded corners, that had touch screens on them.” The company continues to manufacture those same types of phones, he said.
“As the guts of these phones got more sophisticated, you can do more things,” Verhoeven said. “The entire industry moved this way. Is that infringement? The evidence is going to show, no, it’s competition. It’s providing the consumer what the consumer wants.”
He argued that Apple was inspired by Sony Corp. (6758), pointing to e-mails among members of Apple’s design team discussing how the iPhone’s original design compared to a Sony design.
Apple’s demand for $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.
Samsung also is alleging in a countersuit that Apple is infringing two patents covering mobile-technology standards and three utility patents. Samsung says the patents related to data transition and other technology and contends they are essential for making any mobile phone work. The company is demanding royalties of as much as 2.4 percent for each device sold, according to a court filing.
Verhoeven said that in contrast to Apple’s design-focused claims, Samsung’s patents are more sophisticated than “little neat things you can do on a touch-screen.”
Apple’s first witness was Christopher Stringer, a designer at the company for 17 years, who said he typically works with a group of 15 or 16 designers around a kitchen table having a “brutally honest circle of debate” until they are comfortable with a product.
McElhinny asked Stringer about the inspiration for the iPhone.
“We were looking for a new original and beautiful object, something that would really wow the world,” Stringer testified. “We wanted to create something that seemed so wonderful you can’t imagine how you’d follow it.”
Apple designers spent “years” trying to create the “most simple, purest manifestation of what that can be -- something that people can love.”
One of 10 jurors in the case was granted her request to be dismissed yesterday after telling the judge her employer wouldn’t pay her while she was away from work. That juror, an insurance agent, was one of the three women serving on the panel.
The trial is scheduled to run through late August.
The case is Apple Inc. v. Samsung Electronics Co. Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).
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