Apple’s Legal Wins Show No Clear Victor in Patent War

Apple Inc. (AAPL) scored three legal victories in a week that still leaves unclear whether the iPhone maker will be the victor in global patent battles over technology that’s transformed everyday lives.

A U.S. trade agency on Aug. 9 issued an import ban that prevents Apple’s chief competitor, Samsung Electronics Co. (005930), from selling devices in the U.S. that infringe two Apple patents. A week earlier, President Barack Obama’s administration overturned a similar ban won by Samsung against some of Apple’s older iPhone 4s. In between, a U.S. appeals court revived Apple’s patent case against Google Inc. (GOOG)’s Motorola Mobility.

“It is a worldwide fight, and I don’t think any one company can declare international victory,” said Jeff Lewis, a patent lawyer with Patterson Belknap Webb & Tyler in New York. “We’ve seen a lot of split decisions.”

All of the companies are vying for a bigger share of the $293.9 billion market, which increased 34 percent last year, according to data compiled by Bloomberg. Suwon, South Korea-based Samsung is the world’s biggest manufacturer, while it vies with Apple for the title of No. 1 in the U.S.

Some Samsung devices infringe two Apple patents for multitouch features and headphone jack detection, while newer devices work around those patents, the U.S. International Trade Commission said in a notice posted on its website Aug. 9. The trade agency cleared Samsung of infringing patents for the design of the iPhone, and both sides declared they were the bigger winner.

Photographer: SeongJoon Cho/Bloomberg

Apple Inc. and Samsung Electronics Co. together make almost half of all smartphones sold, with Samsung holding the title of world’s biggest and the two companies vying to be No. 1 in the U.S. Close

Apple Inc. and Samsung Electronics Co. together make almost half of all smartphones... Read More

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Photographer: SeongJoon Cho/Bloomberg

Apple Inc. and Samsung Electronics Co. together make almost half of all smartphones sold, with Samsung holding the title of world’s biggest and the two companies vying to be No. 1 in the U.S.

‘Blatant Copying’

“The ITC has joined courts around the world in Japan, Korea, Germany, Netherlands and California by standing up for innovation and rejecting Samsung’s blatant copying of Apple’s products,” Kristin Huguet, an Apple spokeswoman, said in an interview. “Protecting real innovation is what the patent system should be about.”

The six-member trade commission found that Samsung had infringed the feature patent for a multitouch screen that names the late Apple co-founder Steve Jobs as one of the inventors, and another for detecting when headphone jacks are plugged in.

While saying it was disappointed with the exclusion order, Samsung applauded being cleared of infringing Apple’s design patents, which would have been harder to work around.

“Apple has been stopped from trying to use its overbroad design patents to achieve a monopoly on rectangles and rounded corners,” Adam Yates, a Samsung spokesman, said.

Marketplace Competition

“The proper focus for the smartphone industry is not a global war in the courts, but fair competition in the marketplace,” Yates said. “Samsung will continue to launch many innovative products, and we have already taken measures to ensure that all of our products will continue to be available in the United States.”

The commission overturned ITC Judge Thomas Pender’s findings of infringement on two other patents, including a design patent for the iPhone’s flat front face with wider borders at the top and one covering translucent images for applications displayed on a phone or computer screen. The commission agreed with Pender that some of Samsung’s models had successfully worked around the infringed patents.

The ruling is unclear how many of Samsung’s phones would be affected by the import ban, which is subject to review by the Obama administration.

Samsung can import all of its phones during that review period, while Apple can argue to U.S. customs officials that Samsung’s new models copy the inventions.

Model Switch?

During arguments before a U.S. appeals court Aug. 9, Apple lawyer William Lee of WilmerHale in Boston said that, in some instances, Samsung has pulled specific model names from the market while selling essentially the same product under a different name.

The patents considered by the trade commission are different than those a California jury said last year were infringed by Samsung. Hours before the trade agency’s decision, Apple asked the U.S. Court of Appeals for the Federal Circuit in Washington to block sales of the products named in the California case.

In both proceedings, the Apple patents are for the design or features of the smartphones. In filings with the trade commission, Apple contrasted that with some of the patents asserted by Samsung against Apple, which covered inventions that are part of industrywide technology standards.

Apple Veto

U.S. Trade Representative Michael Froman, who is designated by Obama to review import bans imposed by the commission, on Aug. 3 overturned one against some of Apple’s older iPhone 4s and iPads 2 3Gs. The administration said it wanted to ensure patents on widely used technology standards are available at low prices to anyone that wants to use them.

The legal standard considered at the trade agency is different from that used by courts.

At issue in the appeals court arguments was a trial judge’s decision to let Samsung continue selling products because Apple hadn’t proven that its patented features and designs drove sales of the devices, and that Apple could be made whole with money.

A decision in the Federal Circuit case, which isn’t expected for several months, could have broad ramifications for any complex product like a smartphone or computer with multiple components and features.

The legal disputes have been going on for more than three years, and it hasn’t stopped progress when it comes to innovations in smartphone technology, Patterson Belknap’s Lewis said.

“The consumer has won and the system has won because what you have is the original innovation and additional innovations that go beyond the original,” he said. “That’s what the patent system is designed to do -- to spur companies on.”

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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