Yes, Samsung ripped off Apple's patents when it made some of its smartphones. No, that doesn't mean it should be banned in the United States. That's the mixed verdict from Judge Lucy Koh of U.S. District Court in Northern California in the latest stage of the complex legal battle of the tech titans.
Koh evidently found it hard to swallow the idea that Apple -- one of the world's most profitable companies -- would suffer irreparable harm from the sale of 26 Samsung devices the Cupertino-based giant wants struck from store shelves. Koh had previously declined to issue an injunction against the devices being sold at the start of the trial. The vast majority of the products are no longer on the market.
$1 Billion Fine Looms
Among the devices are Samsung's Galaxy S 4G, Galaxy S II (AT&T), Galaxy S II Skyrocket, Galaxy S II (T-Mobile), Galaxy S II Epic 4G, Galaxy S Showcase, Droid Charge (Verizon) and Galaxy Prevail, according to USA Today. Koh granted an injunction against Samsung's Galaxy Tab 10.1 tablet but lifted it in October after a jury decided Samsung had not infringed on an Apple tablet patent in question.
South Korean-based Samsung is appealing the jury's verdict on the other devices but may have to pony up a $1.05 billion judgment, which is relatively small change for both companies. Now the world's top mobile phone maker, Samsung raked in $5.97 billion in net profit in the third quarter of this year alone.
The jury had dismissed a Samsung countersuit against Apple, related to iPhone and iPod touch technology, although a South Korean court ruled that both companies violated each other's patents.
With sales of its Galaxy brand devices soaring, Samsung was obviously pleased to maintain access to the important U.S. consumer market as holiday sales ramp up. (Sales of the new flagship Galaxy S III actually spiked shortly after the August verdict, an analyst said, possibly out of concern it might be included in the ban.)
"We are pleased that the judge today denied Apple's move to limit consumer choice, and restrict fair competition in the marketplace," a spokeswoman told us.
But it ain't over till it's over. Samsung and Apple will face off in yet another battle in the same court sometime next year in a suit filed by Apple in August aimed at the Galaxy S III smartphone. In something of a goodwill gesture, Samsung this week dropped its request for a ban of related Apple devices in some European countries "in the interest of consumer choice."
More Battles Ahead
"This decision is a huge success for Samsung, strategically speaking," senior wireless analyst Neil Shah of Strategy Analytics told us Tuesday. "Avoiding permanent injunction is [more important] than the billion-dollar damages penalty which is a drop in the ocean for cash-rich market leader Samsung."
Shah said the decision costs Apple "long-term leverage over Samsung here in its home-turf, one of the premium smartphone markets in the world."
But despite Samsung's move to withdraw injunction requests against Apple in Europe, the U.S. rival "won't sit still," Shah said. "This is far from over."