Samsung has vowed to appeal Apple’s $1.05bn patent lawsuit victory, while the South Korean company’s shares dropped by 7.5 percent in Monday trading
Samsung has accused smartphone rival Apple of “the outright abuse of patent law” following Apple’s patent victory on Friday, while Samsung investors wiped more than $12 billion (£7.5bn) off the company’s value in Seoul trading on Monday.
A US court on Friday ordered Samsung to pay Apple $1.05bn in damages, after finding that Samsung’s smartphones and tablets infringed on Apple patents used in the iPhone and iPad.
In a session that took more than a half an hour at the San Jose court, a clerk read dozens of rulings on multiple counts of infringement regarding a variety of Samsung products. In most, but not all cases, the Samsung products were found to have infringed on Apple’s iPhone smartphone and iPad tablet computer.
Samsung products found to have violated Apple patents included the Samsung Galaxy Tab and Galaxy Tab 10.1 tablets and such smartphone models as the Captivate, the Galaxy S line, the Fascinate and the Epic 4 G. In the case of most patents, the jury ruled that Samsung’s infringement of them was “willful”.
Samsung has said it will appeal the victory, which is a major win for Apple in the ongoing patent war between the two companies.
A further source of uncertainty for investors is whether Apple will gain court approval for a ban on sales of Samsung devices in the US, a ban which could include the flagship Galaxy SIII smartphone. The Galaxy SIII is Samsung’s top-selling smartphone, with more than 10 million units sold since its May debut.
If the jury verdict is upheld after the inevitable appeals, the $1.05 billion damages award has the potential to take a significant bite out of Samsung’s cash reserves, which totaled $23.8 billion according to its second quarter earnings report released on 27 July.
In a memo released to Samsung staff and to the public on Monday, the company said it regretted that the verdict had “caused concern” for employees and customers. Samsung said it had been forced to go to court with Apple only after efforts to negotiate, and accused Apple of relying on the “abuse of patent law” for growth.
“We trust that the consumers and the market will side with those who prioritise innovation over litigation, and we will prove this beyond doubt,” Samsung said in the memo. Samsung said it will ask the judge to overturn the verdict, and if this fails it will appeal the case.
In his own internal memo, published by Apple news website 9to5mac, Apple chief executive Tim Cook called the win a victory for “values” and said the company’s products were not made “for competitors to flagrantly copy”.
Apple has said it will file for a sales injunction against Samsung, and a hearing date has been set for 20 September.
Google, for its part, stated over the weekend that most of the claims made by Apple against Samsung “don’t relate to the core Android operating system” used by Samsung’s mobile devices. The ruling could set a precedent for other smartphone makers who use Google’s Android, several of whom, including HTC, have already been targeted by Apple.
However, it could help smartphone makers using Microsoft’s Windows Mobile, including Nokia, whose shares jumped by up to 11 percent in early trading in Helsinki on Monday.
Shares take a hit
Samsung’s shares ended Monday trading in Seoul down 7.5 percent, their biggest daily percentage drop in nearly four years, closing at 1.18m won (£657). However, Samsung’s shares remain around 75 percent higher than their value 12 months ago.
Samsung’s smartphone and tablet business accounts for around 70 percent of the company’s earnings, which recorded a net profit of $4.5bn for the quarter ending in June. In July IDC reported that Samsung had shipped 50.2 million smartphones in the second quarter of 2012, nearly double the 26 million iPhones shipped by Apple during the quarter.
Samsung and Apple together controlled nearly half of the global smartphone market, according to IDC, with competitors Nokia, HTC and ZTE each having market share of less than 7 percent. The global smartphone market has been valued at more than $200bn by Bloomberg Industries.
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