John Paczkowski

Recent Posts by John Paczkowski

Ringside as Apple and Samsung Go Into the Final Round

After a last fruitless effort to reach a settlement in their closely watched patent battle, Apple and Samsung presented their closing arguments to the jury that will determine who ripped off whom.

At issue in the case: Whether Samsung “slavishly” copied the design of Apple’s iPhone and iPad, and whether Apple infringed a handful of Samsung patents covering mobile communications technology. At stake, upward of $2.5 billion in damages and, to some extent, the future of mobile device industrial design.

First to present closing arguments was Apple, beginning only after a somnolent reading of 109 pages of Byzantine jury instructions by Judge Lucy Koh, who prefaced it by saying, “I need everyone to stay conscious during [this] — including myself.” That was a tall order given the 84 instructions read, which covered everything from the minutiae of patent and antitrust law to a discussion of willful infringement and the dilution of trade dress. But the jury managed to stay awake through all of it thanks to a series of brief breaks during which Koh asked the entire court to stand to “get the blood flowing again.”

Apple’s Closing Argument

Apple attorney Harold McElhinny kicked things off with a chronology. “If you want to find out what really happened, if you want to see the truth, you need to make a chronology,” he said, before running through a now familiar argument. The smartphones Samsung offered between 2004 and 2007 looked nothing like the iPhone. But after Apple launched the device and “shocked the world” with it, Samsung’s smartphones appeared to adopt a similar design.

Faced with a “crisis of design” inspired by the iPhone, said McElhinny, Samsung “copied and emulated” Apple’s designs without taking any of the risks that Apple had taken. “They were copying the worlds most successful product,” McElhinny said. “How do we know that? We know it from Samsung’s own documents. We see how they did it.”

“Samsung’s leadership was bound and determined to cash in on the iPhone’s success,” McElhinny continued, running through a series of internal Samsung documents revealing the company’s discussions of the iPhone and how best to match it. The end result of those talks: The Galaxy S, which did far better at market than Samsung’s earlier post-iPhone smartphones. “Samsung got what it wanted,” McElhinny said. “Its smartphone sales, which had been stagnant, suddenly took off when its first iPhone knockoff was introduced into the mix.”

Infuriated by Samsung’s actions, Apple challenged the company. “But instead of doing the right thing, Samsung decided to gin up claims of its own,” McElhinny said. “And that has taken us down the road that has led us to this courthouse.”

And still, he said, Samsung stonewalled.

“No Samsung executives were willing to come here from Korea,” McElhinny noted. “We called some of their top people. … Samsung had a chance to defend itself in this case; instead they sent you lawyers. Instead of witnesses, they brought you lawyers.”

“There is no question that Samsung’s phones are substantially similar in design to the iPhone,” McElhinny said, referring to a key patent infringement test. “And no ordinary observer could detect the difference in their overall appearance. … they sat with the iPhone and copied every detail, feature by feature.”

Next McElhinny attacked Samsung’s arguments that the iPhone’s features are obvious, functional and based on prior art. “There has been a complete failure of proof on that issue,” he said, arguing that Samsung has not supplied evidence that meets the legal standards for obviousness.

“Samsung was the iPhone’s biggest fan,” McElhinny said. “They knew a good thing when they saw it. They tried to compete with it, and when they couldn’t, they copied it.”

On the issue of Samsung’s alleged violation of Apple’s trade dress, McElhinny touched on the various documents entered into evidence that suggest Samsung’s devices caused consumer confusion because of their resemblance to Apple’s products. Among them, a Best Buy survey that showed some consumers returned the Galaxy Tab tablets they’d purchased because they mistook them for iPads. “There was real world confusion,” he said, adding that Samsung’s alleged copying of Apple’s designs paved the way for others to do the same. Said McElhinny, “Samsung spent a billion dollars mimicking our designs and holding it out to the world so the Apple design is no longer seen as unique.”

On the utility patents at issue in the case (pinch to zoom, bounce back), McElhinny employed the same argument he used to dispatch Samsung’s claim that the iPhone’s features are obvious: “Again, we have a complete failure of proof.”

“We have demonstrated that Samsung has violated each and every one of our intellectual property rights,” McElhinny said, before moving on to damages.

“Samsung makes fun of our damages claim, but there are two factors driving those damages,” he explained. The first: Samsung has sold 22.7 million infringing handsets to date. The second: Sales of those handsets generated $8.16 billion in revenue for it. “The damages in this case should be large, because the infringement has been massive,” McElhinny said.

He then presented four damages scenarios, ranging in size from $2.48 billion to a minimum of $519 million. Then, with a reminder that the jury must consider whether Samsung acted willfully when it allegedly copied Apple’s IP, McElhinny wrapped up. “Samsung acted with reckless disregard,” he said. “Think about copying documents … Think about that Google meeting.”

Samsung’s Closing Argument

Samsung’s closing argument began with a criticism of Apple’s case and its competitive strategy.

“Apple’s here asking for what it is not entitled to,” Charles Verhoeven said. “It’s here asking you to prevent its largest competitor from giving consumers want they want. … Rather than competing in the marketplace, they are trying to win in the courtroom. … It’s attempting to block its most serious competitor from even playing the game.”

“Your decision, if it goes Apple’s way, could change the way competition works in this country,” Verhoeven said.

The crux of Verhoeven’s argument: The smartphone as we know it today is the product of the same natural design evolution that we saw around the flat-screen TV and other common consumer electronics. Apple’s iPhone design isn’t unique, Verhoeven said. “Guess what, every single smartphone has a rectangular shape with rounded corners and a big screen,” he quipped. “Just walk through Best Buy. … So Apple is here seeking $2 billion in damages for what? That little ornamentation on the screen. It’s amazing, really. Apple thinks it’s entitled to have a monopoly on a rounded rectangle with a touchscreen.”

Verhoeven continued his closing, taking a scalpel to Apple’s argument that Samsung’s products created confusion in the marketplace, asserting that no ordinary observer could possible confuse Apple’s mobile devices with Samsung’s.

“Is anyone really deceived by Samsung’s devices that they were buying Apple devices?” he asked. “There is no deception, no confusion, and Apple has no evidence of it. Consumers make choices, not mistakes. These are expensive products and consumers do a lot of research before they purchase them. There is no deception, no confusion, and Apple has no evidence of it.”

Verhoeven’s next target: Apple’s collection of expert witnesses. One after the other he picked apart their testimony, at one point noting that one of Apple’s witnesses unwittingly bolstered Samsung’s case. Said Verhoeven, “When you have a paid expert on Apple’s side that gives testimony that’s favorable to Samsung, well that’s very credible evidence.”

Throughout his takedown of the design patents Apple believes are key to its case, Verhoeven reiterated the “Apple didn’t invent the rectangle” refrain heard throughout the case. “The only way you’re going to find substantial similarity between these products is if you think having a device with a rectangular screen and rounded corners is unique,” he said.

Building on this idea, Verhoeven spoke about the distinguishing features of Samsung’s devices — the Droid start-up sequence, the size of their screens, their user interface icons, etc. — again arguing that the devices Apple claims mimic its designs are actually very different. “That’s not substantially similar,” he said over and over again, slicing away at a key infringement argument.

Talking about the Galaxy Fascinate UI and the icons that Apple argues Samsung cribbed from it, Verhoeven said, “There are only two icons that Apple’s expert witness said were similar — the phone and the clock. And I would submit that the vast majority of the icons are substantially different. … Let’s not pretend you can patent a colorful row, a colorful matrix of icons.”

And then onto a new tack. Verhoeven took issue with Apple’s characterization of Samsung as a “copyist.”

“What they’re suggesting is that Samsung’s phones looked one way before the iPhone and another way after it,” Verhoeven said. “I submit to you that this is an intentional attempt to mislead the jury.” And with that he displayed a massive chart showing a few dozen Samsung phones. On it were a few phones that boast that same rounded rectangle design seen on the iPhone — phones that Apple did not include while making its case. “They’re intentionally ignoring an entire category of phones,” Verhoeven said. “This is a shell game. They’re pretending these phones never existed.”

Rather than rely on the testimony of Samsung’s own witnesses to make his case, Verhoeven spent much of his closing argument working to discredit Apple’s witnesses and suggest that the iPhone maker’s own case includes quite a bit of misdirection.

“Counsel for Apple is trying to mislead you,” Verhoeven said to the jury. “There is no bad intent. There is no copying. … Samsung is a good corporate citizen. All it wants to do is make products that consumers want. … All this copying evidence is hand-waving by Apple. Why? Because they don’t have anything else.”

As the allotted time to make his closing argument began to run out, Verhoeven quickly reviewed a number of patents at issue in the case, asserting again and again that Apple did not meet the burden of proof to support infringement.

He then moved on to Samsung’s own infringement claims against Apple. Because time was short, Verhoeven was forced to do a simple refresher on evidence already presented before moving on to the issue of damages. “We don’t think we should pay any damages,” Verhoeven said. “We don’t think we’re liable.”

And more to the point, Apple’s damages number is “ridiculous.”

“$2.75 billion,” Verhoeven continued. “Really?” Then, after reminding the jury that Apple’s damages expert was paid $1.75 million to come up with that estimate, he pointed out that the expert failed to deduct advertising and R&D costs from his report, something Samsung believes he should have done.

Verhoeven closed with a last shot at Apple’s damages claim.

“Apple’s damages numbers are not reasonable,” he said. “Apple didn’t invent touchscreen. Apple didn’t invent the rectangular smartphone with rounded corners. And the intellectual property it is asserting in this case is not worth the money Apple is asking for.”

Rebuttals

Verhoeven’s closing argument was rebutted by Apple attorney William Lee, who upbraided his rival for the tenor of his closing. “There’s a saying among attorneys,” Lee said. “If you have the facts, stand by the facts. If you don’t, attack your rival’s clients, attack their witnesses and attack their lawyers. And that’s what Samsung has done.”

Contrary to what Verhoeven argued, said Lee, Apple isn’t trying to stifle competition. “We’re just saying, compete on your own innovations,” he explained. “We have to protect our investment in these innovations. Because if we don’t, we won’t have people like Apple spending five years in a room coming up with a device that revolutionizes the mobile phone. … Apple took five years to bring this revolution to us, Samsung took three months to copy it. That’s truth, and that’s simple, clear, and undisputed. … Samsung copied our products, and they made $8 billion dollars doing it. What they’re saying to you is this: we don’t want to pay.”

Lee continued, rebutting Verhoeven’s argument that Apple’s patents are obvious and/or invalid, with a particularly brutal takedown. “The difference between the Apple patents that Samsung has taken two hours to belittle today and Samsung’s patents is this,” Lee said. “The Apple products that make use of those Apple patents are commercially successful and have been universally praised and copied. The Samsung products that make use of the Samsung patents at issue in this case haven’t been praised or copied by anyone.”

“Competition and innovation in this field has been accomplished by real innovators and scientists, not lawyers,” Lee said by way of conclusion. “Apple wants to compete fairly and squarely. Taking someone else’s intellectual property as Samsung did is not fair and square.”

Verhoeven returned to the floor for a 14 minute rebuttal of Lee’s arguments focusing on FRAND (Fair, Reasonable, and Non-Discriminatory) licensing issues — an odd choice of topic on which to run out the clock, considering its complexity. He concluded with this appeal: “Let’s let the innovators compete. And let’s allow Samsung to compete in the marketplace without Apple trying to stop it in the courtroom.”

Jury deliberations in the case will begin at 9 AM PT Wednesday.


Apple versus Samsung Full Coverage

RELATED POSTS:


Twitter’s Tanking

December 30, 2013 at 6:49 am PT

2013 Was a Good Year for Chromebooks

December 29, 2013 at 2:12 pm PT

BlackBerry Pulls Latest Twitter for BB10 Update

December 29, 2013 at 5:58 am PT

Apple CEO Tim Cook Made $4.25 Million This Year

December 28, 2013 at 12:05 pm PT

Latest Video

View all videos »

Search »

When AllThingsD began, we told readers we were aiming to present a fusion of new-media timeliness and energy with old-media standards for quality and ethics. And we hope you agree that we’ve done that.

— Kara Swisher and Walt Mossberg, in their farewell D post