Apple’s Jobs Confronted Samsung Over Galaxy, Witness Says

Aug. 11 (Bloomberg) --Steve Jobs, Apple Inc. (AAPL)’s late co- founder, confronted Samsung (005930) Electronics Co. executives in 2010 after the South Korean company introduced its Galaxy smartphone, Apple’s patent licensing director testified.

Boris Teksler, director of patent licensing and strategy, was called as a witness yesterday in Apple’s multibillion-dollar intellectual property trial against Samsung in federal court in San Jose, California. He said Apple made a presentation to Samsung executives in August 2010 intended to warn the company against copying the iPhone.

“We were quite shocked,” he said. “They were a trusted partner of ours and we didn’t know how a trusted partner would build a product like that.”

Apple sued Samsung in April 2011. 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. The trial is the first before a U.S. jury in a battle being waged on four continents for dominance in a smartphone market valued by Bloomberg Industries at $219.1 billion.

While the companies are bound by lucrative commercial ties, each is trying to convince jurors that its rival infringed patents covering designs and technology.

During cross-examination, Teksler confirmed that he wasn’t at the August 2010 meeting. He also acknowledged that at least five of the seven Apple patents at issue in the trial didn’t appear on a list Apple identified to Samsung in the 2010 presentation.

Utility Patents

The 2010 presentation “doesn’t say anywhere that Apple would not license its utility patents to Samsung?” asked Samsung’s lawyer, Victoria Maroulis.

Teksler agreed. His testimony is scheduled to continue Aug. 13.

Earlier yesterday, a witness for Apple testified that 21 Samsung smartphones copy patented technology for “rubberbanding,” the way an iPad or iPhone screen seems to bounce when a user scrolls to the end of a file.

Ravin Balakrishnan, a University of Toronto professor hired as an expert witness, told the jury yesterday at the companies’ intellectual property trial that Apple’s innovation was designed to tell users “you’ve reached the edge, the system is still alive, and it’s not frozen.”

Other Apple patents covering technology that let users pinch and expand images on a screen and allow for “repositioning and rightsizing” are infringed by more than 20 Samsung products, Karan Singh, Balakrishnan’s colleague at the university, testified.

Online Newspaper

The rightsizing technology lets users re-size, enlarge and reposition articles in an online newspaper, for example, to “make that piece of information available,” he said.

Samsung’s lawyers attempted during cross-examination to cast doubt about what, exactly, Apple’s patents cover, and show that Samsung’s products don’t infringe them.

Attorney Kevin Johnson showed Balakrishnan a video of an online newspaper being scrolled on a computer tablet and the content stopping, without bouncing, at the end of the image. Balakrishnan testified that the image must not always bounce back for the device to infringe the patent at issue.

Edward DeFranco, another lawyer for Samsung, got Singh to agree that a user must scroll images with one finger, not two, to infringe a patent he testified about.

DeFranco then displayed a video of someone scrolling on a tablet computer using two fingers in an attempt to show that Samsung can’t be infringing Apple’s patent.

‘Jittering Spasmodically’

“The content is jittering spasmodically,” Singh said, adding that the result is proof, “technically,’” that Apple’s product is being infringed.

In addition to patent infringement, Cupertino, California- based Apple contends that Samsung’s copying of the look of the iPhone and iPad has diluted the values of its iconic brands.

Apple is using market survey research to try to show the jury that Samsung has copied its devices so closely that a consumer seeing products made by the South Korean company would actually believe them to be made by Apple. Samsung is trying to demonstrate that there is little actual confusion among consumers between its and Apple’s products.

A hired expert witness for Apple told the jury yesterday that a “substantial portion” of consumers that he surveyed confuse Samsung tablet computers and smartphones with Apple products.

Consumers Confused

Kent Van Liere of NERA Economic Consulting said he concluded from his surveys that 37 to 38 percent of consumers confused the Samsung Fascinate and Galaxy SII Epic 4G smartphones with Apple’s iPhone. He said a “net rate” of 12 percent of consumers confused Samsung’s tablets with Apple’s iPad.

Under cross-examination by a lawyer for Samsung, William Price, Van Liere acknowledged that the surveys he did for Apple marked the first time he examined consumer confusion in a “post-sale environment” instead of at “point of purchase.”

“You can’t use your survey to show confusion when they bought” the product? Price asked. Van Liere said he can’t.

Price elicited testimony from Van Liere that consumers surveyed about tablet computers saw videos of those products and didn’t touch them.

‘Neon Apple’

“You’ve been in cafes, where you see people with Apple computers” and see “that big neon Apple on the top of computer?” Price asked. “You can see that pretty easily?”

Van Liere said that he had seen the logo, and that his surveys didn’t include the views of Apple products Price asked about. He said he reconstructed only the “allegedly infringing” conditions outlined in Apple’s complaint.

Apple seeks as much as $2.88 billion for its claims that Samsung infringed patents and trademarks, according to a court filing this week. Apple, based in Cupertino, California, also wants to make permanent a preliminary ban it won on U.S. sales of a Samsung tablet, and extend the ban to Samsung smartphones.

Samsung, based in Suwon, South Korea, countersued and will present claims that Apple is infringing its patents.

Apple sold 8.34 million iPhones in the U.S. in its most recent quarter, fewer than the previous two periods, according to a court filing Aug. 9.

Sequential Decline

The fiscal third-quarter total for the U.S. compares with 10.7 million iPhones sold in the preceding three months and the record 15 million sold in the last three months of 2011, the filing showed. The sequential decline is in line with a slowdown seen before in iPhone sales ahead of the release of a new model.

Apple has sold 86 million iPhones in the U.S. since the product debuted in 2007. The filing showed Samsung sold 21.3 million smartphones from mid-2010 to mid-2012.

Apple plans to finish presenting its evidence and rest its case on Aug. 13, Harold McElhinny, a lawyer for the company, told U.S. District Judge Lucy Koh yesterday. It will then be Samsung’s turn to call witnesses.

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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