Ina Fried

Recent Posts by Ina Fried

As Apple and Samsung Head to Court, Here’s a Handy Cheat Sheet

As you may have heard, Apple and Samsung are having a bit of a tiff.

Actually, it is more like a knock-down, drag-out brawl at this point. But one piece of the argument is due to be settled in a trial that starts today in a federal court in San Jose.

Now you may not know your subpoenas from your sub sandwiches, but that’s what we’re here for. Before I joined the ranks of AllThingsD, I once spent a summer covering the federal tax evasion trial of Heidi Fleiss. So I’ve got you covered.

Plus, we have spent the past few days putting together a little cheat sheet to understanding the big issues at stake, and offering tips on how to muddle through the minutiae.

So, now who’s suing whom?
Well, Apple filed the initial suit in this case in April 2011, charging Samsung with infringing its patents. Samsung, however, has countersued. That means that Apple is the plaintiff and Samsung is the defendant, although Samsung has filed a motion contesting even that. Samsung asked that both sides be referred to as “claimants.”

What are they suing over?
Both sides are accusing the other for patent infringement. Apple is suing over several patents related to the way the iPhone looks and acts, accusing Samsung of “slavishly copying” its device. Samsung, meanwhile, is suing Apple over patents related to the way mobile communications operate more broadly.

Their patents are part of a particular class known as “standards-essential” patents. Such patents are needed in order for a device to meet an industry standard. Such patents are generally required to be licensed to all parties under what are known as FRAND terms — that is fair, reasonable and nondiscriminatory.

Also in dispute the manner in which royalties on Samsung’s standard essential patents are calculated. Samsung argues they should be derived from the market value of the device in which they are used. Apple contends they should be calculated from the component in which an the patents are actually used. The difference between the two is vast. Samsung is angling for a royalty rate of 2.4 percent on the full price of the iPhone. But Apple insists it only deserves a rate of 2.4 percent on the iPhone’s baseband processor, which amounts to just $0.0049 per unit.

And what do they want again?
Both sides want money. Apple wants to be awarded damages of $2.5 billion — more, if the judge finds Samsung’s infringement was willful. Beyond that, Apple is also seeking an injunction barring from sale any Samsung products hat infringe on its patents.

Aren’t there a million of these darn suits?
Yes, yes there are. In addition to other cases before U.S. federal courts and the U.S. International Trade Commission (a body with the ability to bar imports into the U.S.), the two sides have a variety of other legal battles in courtrooms across the globe. Apple is also suing HTC, and Microsoft and Motorola are suing one another, to name just a few of the key cases.

So why should we care about this one?
Because we say so. And it’s also one of the first big cases to go to trial among the many, many disputes over smartphone patents. If Apple prevails on its complaint, Samsung could face a massive monetary judgment as well as potentially lose the ability to ship its key products in a huge market, or be forced to significantly reshape them. If Apple loses, its aggressive legal strategy against Android phone makers could face a significant blow.

Samsung could also get a significant royalty fee if a jury sides with the Korean firm in its cross-complaint against Apple.

Are there a million lawyers working on this case?
It only seems that way, based on the zillions of filings made in the last couple weeks. But there are a lot of them. Nearly 80 attorneys had filed an appearance with the court as of Friday. Most represent Apple or Samsung, but a number represent third parties, including many tech companies seeking to keep their contracts secret, as well as Reuters, which is fighting those requests.

How long will this all take?
The trial itself starts with jury selection today. Opening arguments could begin later today, or perhaps more likely by Tuesday. And expect the case to drag on at least into the middle of August. Court won’t be in session every day, though.

So this will be a straightforward battle over the facts?
Um, no. Trials, particularly big federal cases, feature all kinds of side shows. We’ve seen this already in the important matter of who will get to sit where. When the jury is around, expect to hear objections, strenuous objections and requests for sidebars. And that’s when the jury is there.

Once they go home for the day, the attorneys in the case will often appear before the judge to argue all manner of other motions, ranging from what evidence will be allowed to which witnesses should be permitted to take the stand, and anything else that the dozens of lawyers can dream up.

That said, things will get really boring for long stretches, as a big part of patent cases focuses on trying to make sense of very complicated patents and the even more arcane law that governs them. Let’s just say you wouldn’t want a liveblog.

Who gets to pick a winner in all this?
Ultimately, a 10-member jury will decide whether or not either party is guilty of infringing the other’s patents. The trial will be overseen by Judge Lucy Koh, who also will determine what information does and doesn’t get before the jury.

So will the jury verdict be the last word on this?
Again, not so much. Either side — and perhaps both — will inevitably appeal whatever the jury finds, ensuring continued full employment for future generations of law students. Sorry.

Will there be more juicy details, like unreleased Apple prototypes and confidential licensing agreements?
We can only hope so. That would certainly make all those long trips to San Jose worthwhile. Both sides have asked the court for a process by which they can keep certain trial exhibits from public view, but they will probably have to disclose more than they would otherwise like. Reuters has petitioned the court to make nearly everything public, a request being opposed by Samsung, Google, and a number of other tech heavyweights.

Apple versus Samsung Full Coverage


Latest Video

View all videos »

Search »

There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google