Apple, Samsung Blame Each Other for Lack of Settlement

Apple Inc. and Samsung Electronics Co. (005930) blamed each other for blocking progress toward a settlement of their patent disputes in a report to the judge who has presided over their two U.S. trials.

While both companies vowed to continue pursuing an accord to end their three-year legal fight over smartphone technology, each said its adversary has taken positions that make out-of-court resolution more difficult, according to a filing yesterday in federal court in San Jose, California.

The report came three days after Apple and Google Inc. announced they are dropping all patent lawsuits against each other and will work together to reform patent law. That agreement signals a de-escalation in hostilities between two companies that have filed about 20 lawsuits against each other in the U.S. and Europe and compete fiercely on many technology fronts.

Apple and Samsung, the world’s top two smartphone makers, have tried and failed before to reach a settlement while spending hundreds of millions of dollars in legal fees on battles across four continents to dominate a market that was valued at $338.2 billion last year, according to data compiled by Bloomberg.

Market Share

Samsung’s share of global smartphone shipments in the first quarter of 2014 fell to about 31 percent from 32 percent a year earlier, according to Strategy Analytics. Apple’s share fell to about 15 percent from 17.5 percent in the same period, while Chinese producers such as Huawei Technologies Co. and Xiaomi Corp. gained in emerging markets with cheaper, feature-packed devices.

Photographer: Brent Lewin/Bloomberg

Samsung’s share of global smartphone shipments in the first quarter of 2014 fell to about 31 percent from 32 percent a year earlier, according to Strategy Analytics. Apple’s share fell to about 15 percent from 17.5 percent in the same period. Close

Samsung’s share of global smartphone shipments in the first quarter of 2014 fell to... Read More

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Photographer: Brent Lewin/Bloomberg

Samsung’s share of global smartphone shipments in the first quarter of 2014 fell to about 31 percent from 32 percent a year earlier, according to Strategy Analytics. Apple’s share fell to about 15 percent from 17.5 percent in the same period.

Reaching a settlement is “impossible” as long as Samsung refuses to agree that Apple’s participation in talks can’t be used in any proceedings over royalties or possible sales bans, Apple lawyer Mark Selwyn said in yesterday’s filing with U.S. District Judge Lucy Koh, who has repeatedly urged the companies to make peace.

Selwyn also said that remarks in the press attributed to Samsung’s lead lawyer, John Quinn, suggest “Samsung has no interest in stopping its use of Apple’s patents or compensating Apple for past infringement.” In one story, Quinn was quoted saying, “It’s kind of hard to talk settlement with a jihadist,” according to the filing.

Michael Fazio, a lawyer for Suwon, South Korea-based Samsung, said Quinn’s published comments don’t undermine Samsung’s willingness to discuss a settlement. While Samsung doesn’t have pre-conditions for the settlement process, it’s improper for Apple to insist that participation in negotiations can’t be cited in future court proceedings, Fazio said.

“Simply put, though both parties contend that they are committed to resolution, only Apple seeks to impose an obstacle to this resolution through a unilateral condition,” Fazio said in the filing.

Mediation Session

Apple Chief Executive Officer Tim Cook, Samsung mobile chief Shin Jong-Kyun and other executives from both companies attended a full-day session with a mediator in the first week of February, and representatives from both sides had several follow-up phone calls with the mediator, according to a report the companies filed that month.

Apple and Samsung previously tried and failed to reach an agreement in court-ordered settlement negotiations. In 2012, in their first patent-infringement case in San Jose, U.S. Magistrate Judge Joseph C. Spero handled negotiations. The companies also met at least twice in 2011 to discuss settling their dispute before the U.S. International Trade Commission, according to an Apple filing.

The agreement between Cupertino, California-based Apple and Google calls for the dismissal of patent disputes regarding Google’s Motorola Mobility handset unit. Samsung uses Mountain View, California-based Google’s Android software for mobile devices.

The case is Apple Inc. (AAPL) v. Samsung Electronics Co., 12-cv-00630, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Peter Blumberg in San Francisco at pblumberg1@bloomberg.net

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

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