Ina Fried

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Apple: Samsung Took the Easy Road and Copied Us

With a jury picked, Samsung and Apple are getting their first opportunity to make their case in the landmark patent infringement trial in San Jose.

Both companies are suing one another for patent infringement, with Apple seeking billions of dollars in damages as well as an injunction against the Samsung phones and tablets it says are “slavishly copying” the iPhone and iPad. Samsung denies those allegations and is countersuing Apple, charging that the iPad, iPhone and iPod infringe on patents it has for core wireless technologies.

Opening arguments are expected later on Monday. First the jury, and the rest of us, will have to sit through what I am sure will be a fascinating 18-minute video from the judicial system providing an overview on patents and patent law.

Among the rulings overnight, it looks like Samsung won’t be able to show exhibits making reference to Sony’s influence on the iPhone, at least as part of its opening argument. That point has been the subject of significant dispute in the case.

The jury is due in around 9 am PT, and AllThingsD will have live updates with the highlights, though we will try to spare you the truly boring stuff (and there is a lot of that).

For those who are just getting up to speed, here’s our handy cheat sheet to the case.

8:56 a.m.: Court is back in session. Judge Koh discussed a variety of rulings, most notably that the testimony of Apple designer Shin Nishibori will be allowed in a limited fashion.

“That will be admitted solely for functionality and no other purpose,” Koh said.

On a separate matter, one of Samsung’s lawyer’s asked the court to hear further arguments over the admissibility of evidence showing that Samsung designs predate the iPhone. Judge Koh denied the request, saying that she had already heard three motions to reconsider the point.

The Samsung lawyer persisted, saying he was begging the court to hear more discussion.

“You’ve made your record for appeal,” Koh said. “Don’t make me sanction you, please.”

Also, one juror is being dismissed after she said she learned her employer would not pay her for the duration of the trial.

9:05 a.m.: Jury now watching 18-minute video on patent cases. “As you probably know by now, this is a patent case,” the video says. Um, yeah …

It’s actually a pretty good explanation of patents. Wonder if it is on YouTube?

Sure enough, it is.

9:23 a.m.: Video over; jury getting a few more instructions from the judge about patents, explaining utility and design patents, since the video only covered utility patents. Apple is suing over both types of patents. I’ll spare you the rest, but it’s fair to say design patents have to do with the way something looks, and utility patents have to do with how something works. I know, you are shocked.

9:33 a.m.: Time for opening statements. Judge reminding jury (and lawyers) that opening statement is only to say what people will testify to, not argue the law.

Apple is starting. They have an hour and a half.

Apple’s lead attorney tells jury there is good news and bad news. Good news is that Judge Koh “has us on a very strict schedule to make sure we don’t waste any of your time.” Bad news is there will be a lot of testimony in a short period of time.

The key argument, Apple says, is how Samsung moved from a place with a lot of different-looking phones to a lot of phones that looked like the modern smartphones. (Apple showed slides of these.) Apple, naturally, traces that shift to the January 2007 introduction of the iPhone.

9:37 a.m.: Apple says that Steve Jobs warned there would be competitors at the iPhone’s introduction, and that Apple had applied for more than 200 patents related to the phone.

9:40 a.m.: Now we’re getting an Apple history lesson, from the original Macintosh to the first iPod.

Apple lead attorney Harold McElhinny notes that Apple wasn’t content, and set to work on its next thing. Initially, the team was working on what later became the iPad. Eventually, though, it decided the world more urgently needed a better phone.

9:45 a.m.: McElhinny painting the iPhone as a huge risk for the company, in which it entered a market dominated by giants like Nokia, Motorola and Samsung. “They were literally betting their company,” he said.

Now he’s showing a bunch of press clips and awards for the iPhone. McElhinny notes an exhibit that was in front of the U.S. patent office showing the importance of Steve Jobs’s inventions, including the iPhone. (Samsung had sought to exclude this mention.)

9:48 a.m.: Samsung is also a big supplier to Apple, McElhinny notes, saying that Apple bought billions of dollars in components from the Korean company.

With the arrival of the iPhone, McElhinny said that Samsung couldn’t continue making the phones it had been producing.

Samsung had two choices: It could accept the challenge posed by the iPhone and out-innovate the iPhone. Or it could copy them.

“As we all know, it’s easier to copy than to innovate,” McElhinny said.

9:50 a.m. McElhinny is promising to show never-before-seen Samsung confidential documents showing their reaction to the iPhone.

The first couple documents show Samsung’s initial analysis of and reaction to the iPhone. A December 2008 study shows that customers like the fun and whimsy of the iPhone, including features such as the “bounce” when you reach the end of a list or document.

Samsung, McElhinny said, decided at its highest levels to copy the iPhone.

Samsung may bring in designers to testify that they didn’t copy the iPhone, McElhinny said.

“The documents that Samsung has provided … tell a much different story.”

9:56 a.m.: McElhinny now diving into Samsung’s product designs pre-iPhone and after its introduction. The real shift, he said, came with the introduction of the initial Galaxy S.

Tablets also at issue, he said, showing the iPad and the Samsung tablets that followed it. He shows the Q1 Windows tablet that Samsung had done in 2006, and compares it to the Galaxy Tab 10.1.

McElhinny is showing a lot of press articles noting the similarities between Samsung products and Apple’s. Samsung had also sought to keep these press articles from being used in the opening.

10:00 a.m.: McElhinny is now showing internal documents comparing Samsung products then in development with the iPhone and iPad. In many cases, the reports suggest making them more like Apple’s products, McElhinny said.

“To be blunt, the testimony is going to show you that Samsung has not been honest about this copying,” McElhinny said.

10:07 a.m.: Apple now going patent by patent through its design patents.

McElhinny told the jury he anticipates Samsung will argue that Apple’s design patents are really functional, and that they represent the only way to do things.

“I think of this as the ‘Devil made me do it defense,’” he said.

10:08 a.m.: Now on to the utility patents at issue, starting with a patent relating to the “bounce back” feature for when one reaches the end of an electronic document, such as a photo, list or Web page.

Next is a patent related to using a gesture (double tapping) to zoom on an image, and then another gesture (another double tap) to zoom in again and re-center.

10:16 a.m.: Next patent relates to how a touchscreen can distinguish between, say, scrolling versus zooming. Apple’s patented means is to use a single touch to scroll and multiple touch-gestures for zooming. McElhinny said Samsung copied this with the Galaxy S II.

McElhinny said that Samsung is likely to describe these things as trivial, but, he says, if that is the case, why do they show up in Samsung’s customer surveys as important and then later in their products?

10:20 a.m.: On to Apple’s other claim in the case, that of “trade dress infringement.”

The iPhone is marked by certain characteristics, McElhinny said, including a metallic bezel around a flat, clear surface, a rectangular product with four evenly rounded corners, narrow black borders at the side, with larger bezels at top and bottom and with icon rows, including at the bottom a dock of icons that don’t change.

Whenever a customer looks at a product with these characteristics, McElhinny said, they think they are looking at an Apple product.

Apple is making a similar claim with regard to the iPad “trade dress” — that is, the way a product is presented to market.

Apple didn’t sit by when Samsung came up with the allegedly infringing products, McElhinny said, saying Apple met with Samsung and asked them to change their products.

10:23 a.m.: He’s wrapping up, saying Apple is seeking a finding of infringement, that the infringement was willful.

“Samsung refuses to stop using Apple’s [technology],” McIllheny said.

Infringement, he said, merits damages, such as lost profits, share of Samsung’s proceeds, royalties or some combination of the three.

Samsung, he said, has sold 22.7 million infringing phones and tablets, resulting in $8.16 billion in revenue and taking $2 billion in profits away from Apple.

10:29 a.m.: Court is taking a short break. Apple is not quite done, but it would appear they have only four minutes left. (Ooops. Bad math — they have 34 minutes left after the break.)

10:55 a.m.: Back from the break, Apple lawyer Bill Lee is now up, addressing Samsung’s counterclaims that Apple infringed on five of its wireless patents.

Some of the Samsung patents at issue, Lee is explaining, are standards-essential patents. Lee likens standards to things like the American outlet, which is the same everywhere and works with all appliances.

The jury, Lee said, will have to decide whether two patents are standards-essential. Apple is actually challenging this, and will produce expert testimony, Lee said, and will argue the technology is not in the standard and isn’t used by the iPhone.

Apple is also making the case that the patents in question aren’t as valuable as Samsung will claim. Plus, Apple is arguing that Samsung didn’t disclose its intellectual property rights to the standard body while the standard body was weighing its standards.

11:09 a.m.: Lee said that five days after Samsung applied for one of the patents in issue, three of the listed inventors attended a standards body meeting and didn’t disclose Samsung’s patent technology. Lee is going a step further and saying that the Samsung employees at the meetings weren’t product designers at all, but rather were workers specifically sent to the standards body to try and see if there was any related technology that the company could use.

Furthermore, Lee argues that Samsung has a responsibility to license any standards-essential patents on what is commonly termed a FRAND (fair, reasonable and non-discriminatory) basis.

Lee says that Samsung wants $12 in damages for the intellectual property on a chip that Apple pays $10 for. In addition, Lee said no company pays Samsung a royalty for the patents at issue (though some companies have cross-licenses with Samsung).

“That’s not fair, that’s not reasonable and that’s not non-discriminatory,” Lee said. As a result, the patents should be found unenforceable.

11:15 a.m.: Apple just got its 10-minute warning from the judge.

The other three patents, Lee said, are of far less monetary value, Lee said, according to Samsung’s own damage requests.

And now we are in typical patent trial speak. Claims, modes. Hmm, wonder what’s going on in the Olympics right now?

11:23 a.m.: Lee making the point that Samsung raised its allegations of infringement only after Apple filed its suit.

In addition, he said, “the evidence will show Samsung has refused to abide by the rules.”

And, with that, Lee is out of time.

Court will resume at 1 pm PT.


Apple versus Samsung Full Coverage

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