Interesting trial. Hang in there Judge Koh, what a tough gig. I think she is right on this one, it would be ideal for companies to get along, decide what is fair on their own, and compete. With that being fairly unlikely, 'there are risks for both sides' is pretty ominous because despite the certainty of the android fans on android sites, and despite the certainty of Apple fans on Apple sites- both sides have presented substantial evidence which is going to leave them with a lot riding on the decision of the jury.
Samsung worst case:
Samsung found guilty on all counts. Judge accepts Apple's $2.75 billion valuation. Judge triples damages for wilfull infringement- $8.25billion. Apple has convincing verdict and sues Samsung across globe in other markets and international courts for years to come.
Likelihood? Near 0 percent. Wilfull infringement is exceptionally difficult to prove. Samsung did have multiple designs similar to the iPhone prior to the iPhone as well as many that were very different. They'll argue their evolution followed Darwinian theory. Of their many designs, the phones that were best at 'surviving' in the market were the simpler designs with only a few buttons, and that process of evolution led to designs that more resembled their final product. Those were the designs that were selling well in the market, the other designs went extinct.
More likely scenario in Apples favor:
Samsung found guilty. Samsung appeals decision. Regardless of decision appeal, Samsung also challenges damages. Basis for the low end $2.5 Apple valuation will be questioned (and is obviously \ skewed in Apples favor since Apples lawyers calculated it). Lower basis will be presented and then premises will also be challenged. First off, the premise that all Samsung phones sold result in a loss of an Apple sale. Fairly damning evidence against Apple in the trial. International phones have already been thrown off the list. Not sure what that percentage is but it should be fairly small. If you have data hop in and share, but I'll say that $2.5b goes to $2.3b with those thrown out. Now factor in Apples own market research presented in the trial. Top reason cited by Apple for consumers choosing a Samsung phone instead of an iPhone? (Something over 30%?) "I wanted to stay with my carrier" Ouch for Apple. Apple had an exclusive arrangement with AT&T for many of the infringing devices for extensive periods. Those consumers *COULD NOT HAVE PURCHASED* an iPhone and kept their distinguishing feature. Throw all phones out that were not sold under an AT&T network plan (those phones still infringe Apples patents and warrant punitive damages, but nowhere near the damages of a 'lost sale'). Second most prevalent reason for choosing a Samsung over on iPhone in Apple's study? (Around 30%) "I wanted a bigger screen" Apple did not offer a phone with a bigger screen. No lost sales there. Throw out the phones with anything other than a 3.5" screen. Right or wrong isn't the point, the point is that $2.5billion is going to get whittled away substantially, and even then won't get paid for several years until the decision appeal process is complete.
Samsung's best case:
Apple loses. Verdict is Samsung phones followed path of evolution and ended up similar to iPhone because that simply is what was selling in the market. Apple loses 'Pinch to Zoom' patent and 'bounceback' patent. This may be a real possibility and the judge suggesting the sides 'narrow their scope' may be a sign that Apple should consider withdrawing one or both of these patents. Prior art alone is sufficient to overturn a patent. What is even more damaging to Apple in this case is that not only is there evidence of prior art (should the jury decide it is sufficient), but there is also proof that that very prior art was demonstrated to Apple before/during the iPhone design. So it looks very much like Apple saw the demonstration, said 'Wow, that's awesome! We need to implement that in our phone!' and instead of buying the company and/or technology, Steve Jobs excercised his right as a 'Great Artist' and stole the technology and patented it. Salt on the wound should the patents be overturned is that the actual inventor (Mitsubishi?) will likely file for the rightful patent and Apple (as well as Samsung) will be forced to pay royalties on pinch to zoom and bounceback should they choose to continue to use them in future phones (anything to date will be exempt since there was no valid patent on them).
Likelihood of this outcome? Not likely, but also far greater than 0%. Apple would of course appeal the decision of Samsungs guilt, but it would be very, very unlikely for any scenario to play out where they get their invalidated patents restored. This outcome would also be the 'shot heard around the world' in terms of rampant litigating for all companies (not just Apple).
So I think Judge Koh nailed it. "Guys, really, play nice and figure this out on your own," is a good solution and great advice. I think even she realizes it is unlikely.
Edited by Frood - 8/16/12 at 7:17am
