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Lesson from U.S. Jury Verdict against Samsung


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Yang Joon-young

Deputy Editor of the IT Mobile Desk
The Korea Economic Daily

The “patent trial of the century” between Samsung Electronics Co. and Apple Inc. was an uphill battle from the beginning for Samsung. The trial was held in San Jose, California, just miles from Apple`s headquarters in Cupertino. The verdict in late August, which completely backed Apple`s accusations against Samsung, had been widely anticipated because the jury consisted mostly of non-experts, including a housewife, a social welfare worker and a jobless person. Unsurprisingly, the jurors appeared to make emotional judgments on the similarity of designs, instead of comparing the complicated technological details.
 
The jury concluded that Samsung had copied critical features of Apple`s iPhone and iPad, infringing on six patents, and decided Samsung should pay Apple $1.05 billion (1.2 trillion won). Only Apple`s designs were recognized, whereas Samsung`s technology patents were totally ignored. Samsung has not been given such a one-sided verdict in any other foreign countries, including Britain, Germany and the Netherlands, let alone Korea.
 
Even Americans raised questions about possible holes in the jury`s performance. The jury reviewed more than 700 disputed questions in just 22 hours of deliberation. Some analysts noted that “trade protectionism” or “selfish nationalism” was reflected in the verdict. Samsung has appealed but the chances of the verdict being overturned seem low.
 
The jury ruling has many implications. “A rectangle with rounded corners” was recognized as Apple`s unique design. Many people commented cynically that the biggest victim in the Apple-Samsung ruling was the rectangle. But one of the underlying issues is that the growing importance of design patent, as represented by “trade dress,” was reflected in the verdict. Trade dress is a legal term that generally refers to the visual cues of a product that identify its maker. Trade dress is a comprehensive device intended to protect intellectual property rights.
 
The Apple-Samsung trial has significant implications for other enterprises. Aside from the financial compensation, the possible stigma of being labeled a “copycat” could be more painful to Samsung Electronics, as it could see its brand image erased. Apple has further increased its attacks on Samsung Electronics by asking the court to ban the U.S. sale of eight Samsung phones.
 
The development represents a slice of the harsh realities of the business world. Google sought to distance itself from the dispute by insisting that despite Samsung`s defeat in the trial, the ruling doesn`t actually relate to the core Android operating system. Samsung Electronics also has begun to reduce its dependence on Android by releasing new smartphones and tablet computers based on Microsoft`s Windows 8 operating system.
 
Is Samsung Electronics a complete loser? Apple is the world`s richest company armed with approximately 130 trillion won in cash. Samsung is emerging as Apple`s strongest rival in the global market. Most analysts share the view that the true purpose of Apple`s lawsuit against Samsung is not to earn financial compensation, but to hold the Korean company in check.
As recently as 2010, Samsung`s share of the global smartphone market was only 8 percent. But Samsung has now become the world`s largest cell phone maker by ceaselessly adding creativity and technological innovations to its products. The global smartphone market has now been framed as a two-way race between Apple and Samsung. Samsung is no longer a “fast chaser.”
 
The Korean company is now qualified to become a “game changer.” Samsung holds the world`s strongest competitiveness in the hardware fields, including application processor, known as the brain of smartphone, communication chip, display and memory. Through its Galaxy S3 smartphone, Samsung displayed the color of its innovations based on human-centered and user experience designs.
 
Korea finished fifth in the London Olympics medal count after overcoming biased decisions by some judges. The real battle has just begun for Samsung. Despite defeat in a combat (lawsuit), it still can win the war (market). Samsung is convinced that consumers will eventually side with a company pursuing “innovations” rather than “lawsuits.” We wish Samsung`s belief will come true in the market.
[ Korea Economic Daily, August 30, 2012 ]

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