Apple Inc. (AAPL) Versus Samsung: iPhone Makers Wins Round 1

Apple Inc. (AAPL) Versus Samsung: iPhone Makers Wins Round 1
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On Wednesday, a federal appeals court in Washington ruled that International Trade Commission made a mistake in March of 2012 that may allow Apple Inc. (NASDAQ:AAPL) to continue its fight against Google Inc. (NASDAQ:GOOG)’s Motorola Mobility Unit.

Today, that momentum seemed to continue as Apple Inc. (NASDAQ:AAPL) struck a blow in its fight against Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) for patent violations.

Apple Inc. (AAPL) Versus Samsung: iPhone Makers Wins Round 1

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Earlier today, Apple alleged that several Samsung products infringe on its patents. Apple Inc. (NASDAQ:AAPL) originally filed this lawsuit against Samsung in 2011, and it’s just one of dozens of ongoing patent lawsuits currently being waged between the tech titans across the globe. They also asked that certain models of Samsung’s be banned from importation.

Apple Inc. (NASDAQ:AAPL) vs Samsung: What is at stake

At stake is whether judges can permanently ban the sale of a complex device like a smartphone if a court finds that it violates a patent that covers just one of the device’s hundreds of features. Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and other smartphone makers say a decision in favor of Apple could cripple the market.

Well, the market may have gotten its leg broken today given the ITC’s ruling in favor of Apple Inc. (NASDAQ:AAPL).

The commission said Samsung products infringed on two Apple patents, one for touchscreen multitouch and another related to headset plugs. At the same time,  the court ruled Samsung did not infringe on four other patents listed in Apple’s claim.

Apple Inc. (NASDAQ:AAPL) and Samsung imports

The ITC banned Samsung from importing or selling some older devices found to infringe on the Apple patents. Given that they are older devices this may ultimately mean nothing but it certainly builds momentum in Apple’s favor. This is one of only four ongoing legal battles between the two that are presently being heard in the United States, including the appeal of a ruling that saw Apple awarded $1.1 billion for Samsung’s perceived patent violations. This was lowered to $599 by another judge last year. But it’s not always about the money.

“Sometimes, the money’s not enough,” said Ray Van Dyke, a technology-patent lawyer with the Van Dyke Firm in Washington “Between Apple and Samsung, it’s about who’s going to be the top dog. You want to shut them down. This is the club. You can beat them into submission with a club and maintain your top dog status.”

The $1 billion ruling represents less than two weeks of iPhone sales, and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) made a profit of over $7 billion in the last quarter alone.

Tech companies like to bring their cases before the ITC because it’s generally easier to get that court to ban the sale of patent-violating products, when compared with the traditional patent court system.

Apple Inc. (NASDAQ:AAPL) import ban ruling

U.S. import bans are obviously serious concerns for foreign companies, but because the iPhone is made oversees, Apple could just as easily be affected by a similar ban on its products in the future.

Apple won its request for an import ban, but there’s a good chance it will mean nothing. Earlier this summer the ITC ruled on Samsung’s own 2011 filing against Apple — and it ended with the agency issuing an import ban on Apple products. But the ITC is required by law to send such “exclusion orders” to the president for a 60-day review. President Obama, in a shock-move, vetoed that ITC order just before the review period was up. That could very well happen with the Samsung import ban as well.

The only real winners so far are the lawyers who bill both Samsung and Apple Inc. (NASDAQ:AAPL) in the tens of millions.


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