Samsung’s $548 Million Apple Check Is No Sign of Surrender

Galaxy S6 Edge smartphones

Photographer: Simon Dawson/Bloomberg

Samsung Electronics Co. agreed to pay Apple Inc. the $548 million a court ordered but that doesn’t mean they’ve come to a final resolution of their long-running patent battle over smartphones.

Samsung said in a court filing Thursday that it’s only paying the money because an appeals court refused to block a judgment ordering it to pay. The South Korean device maker said it will pursue reimbursement for at least some of the money if the U.S. Patent and Trademark Office invalidates the patents and if the U.S. Supreme Court takes up its request for review.

It’s been almost five years since Apple first accused Samsung of “slavishly” copying the iPhone, setting off a global patent battle that has shrunk in size but not in vitriol. The two tech behemoths have dropped all non-U.S. cases, leaving two main disputes that still have a way to go in court.

“I don’t think it’s over, but hopefully we’re getting close,” said Robert Stoll, a patent lawyer with Drinker Biddle in Washington who isn’t involved in the case. “They’ve got to learn to coexist in some shape or form. This has been a very painful thing for the entire industry.”

The $548 million is part of a case that dealt primarily with Apple’s designs for the iPhone, as well as its “pinch-to-zoom” technology. The patent on the invention has been invalidated by the PTO, and Apple is challenging that decision.

Samsung ‘Confident’

“We are disappointed that the court has agreed to proceed with Apple’s grossly exaggerated damages claims regardless of whether the patents are valid,” said Danielle Meister Cohen, a Samsung spokeswoman. “While we’ve agreed to pay Apple, we remain confident that our products do not infringe on Apple’s design patents, and we will continue to take all appropriate measures within the legal system to protect our products and our intellectual property.”

Samsung has until Dec. 14 to file its petition to the Supreme Court challenging the finding that it infringed Apple’s patented designs for phones. That’s also the day Samsung is scheduled to cut the check to Apple.

The reason for paying the money is to avoid daily interest from accruing and increasing its costs, said Marcus Thymian, a patent lawyer with McDonnell Boehnen Hulbert & Berghoff in Chicago who isn’t involved in the case.

“The fight goes on,” he said. “I don’t see it as a precursor to a settlement. The cost of litigation is large in amount of dollars, but not large compared with the amount of revenue they’re bringing in from the smartphones.”

New Management

Even new leadership at Samsung’s phone business may not be enough to broker a settlement, said Will Stofega, an analyst at researcher IDC.

“These two companies have a lot of money, there’s a lot of bad blood and there’s this historic grudge match,” he said. “There’s still plenty of room for more lawyers to make more money ahead.”

Apple isn’t conceding that Samsung would be entitled to any reimbursement, even if the pinch-to-zoom patent is invalidated. It’s also asking the trial judge in California to impose even greater damages for continued infringement of the company’s patents; Apple also wants $1.8 million in compensation for some of its costs.

The second trial involved Apple’s slide-to-unlock, autocorrect and quicklink features of the iPhone. The appeals court that specializes in patent law in September said Apple can get a narrowly worded order that would block Samsung from using the inventions.

Samsung is asking the court to reconsider that decision, and has the backing of Google Inc., Facebook Inc., HTC Corp. and EBay Inc., which say the ruling has created uncertainty and enables patent owners to extract unfairly large settlements.

According to the Thursday filing, the two sides met with a magistrate judge in a settlement conference.

“That process is complete and did not result in a settlement,” they said.

The case is Apple Inc. v. Samsung Electronics Co., 11cv1846, U.S. District Court for the Northern District of California (San Jose).

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