Apple, Samsung Patent Case Will Test Jury

With so much technical and legal jargon to parse, I suspect most jurors will vote with their gut.

The jury on the Apple case has to digest a dizzying amount of technical and legal details. There are three different classes of patents being discussed: utility/technical, design, and trade dress?basically how a product looks. Jurors sat through more than 50 hours of testimony, including listening to 109 pages of jury instructions. The judge even mandated "stand up breaks" to keep the jury alert. Now, that jury just needs to decide, essentially, if Samsung will continue to sell phones and tablets in the United States.

With so much technical and legal jargon to parse, in the end, I suspect most jurors will vote with their gut. In their closing remarks, both sides made passionate, if over-simplified, arguments designed to appeal to the jurors' common sense. Indeed, evidence aside, the entire trial comes down to which of the following statements you are more likely to agree with:

Samsung's lawyer Charles Verhoeven contends, "Rather than compete in the marketplace, Apple is seeking to gain an edge in the courtroom. It's seeking to block its biggest and most serious competitor from even attending thegame."

Or:

Apple's attorney Harold McElhinny argues, "They sat with the iPhone and went feature by feature, copying it to the smallest detail. In those critical three months, Samsung was able to copy and incorporate the core part of Apple's four-year investment without taking any of the risks, because they were copying the world's most successful product."

After the trial, it will be interesting to see how much the evidence changed jurors' opinions and how much of their judgment was formed in advance. I'm not dismissing the American judicial process, but I follow technology for a living, and even I found the legal and technical details here arcane.

On its face, you might think the two giant tech firms could just split the difference, rather than risk a jury decision. After all, these guys are still business partners. Samsung makes 26 percent of all the components used in the iPhone. And yet, Apple is asking for at least $2.5 billion in damages.

A large number, to be sure, but so is the number of Samsung devices that Apple considers to be infringing on its patents. According to Apple, Samsung has sold 22.7 million infringing phones and tablets in the Unites States. Given the way the Galaxy Tab has fared, I think it is safe to say the vast majority of those were phones. The revenue from these sales is estimated to be $8.16 billion and Apple wants its cut.

By contrast, Samsung is countersuing for a measly $422 million, based largely on technical patents that it licenses widely to almost all cell phone manufacturers. In the course of the trial, these patents have served mostly to muck up the case. Valuing these technical patents is tricky, but it seems clear that Apple will have to pay something for them. For the most part, however, Samsung's patents are just here to balance out Apple claims. The real story is in Apple's broad design patents hold.

There is more at stake here for Samsung than for Apple, and money has very little to do with it. Apple doesn't need the money. It is sitting on the biggest pile of cash in corporate America and the world's biggest market cap to go with it. Apple wants to own the form factor. There is no question its iPhone revolutionized smartphone design and its iPad single-handedly created the consumer tablet market. Credit is undoubtedly due.

The questions now could test any patent or legal expert. What exactly does Apple own? Do consumers really confuse the Galaxy S II with the iPhone 4? And what will happen to the smartphone and tablet markets if Apple's claims are granted? Nine jurors in Silicon Valley are in the weeds trying to answer these questions right now.

And remember, the decision must be unanimous. Can we just skip this decision and move right to the appeal?

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Source: http://www.pcmag.com/article2/0,2817,2408793,00.asp?kc=PCRSS05039TX1K0000762

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