Samsung Found to Infringe Most Apple Mobile Patents

Apple Inc. (AAPL) won a jury verdict of more than $1.05 billion against Samsung Electronics Co. (005930) after a finding that Samsung infringed six of seven patents for mobile devices in the first lawsuit to go before a U.S. jury in a fight for dominance of the global smartphone market.

The nine-member jury also determined that all of Apple's patents at stake in the trial were valid. The jury began delivering its verdicts today in federal court in San Jose, California. Jurors heard each side present about 25 hours of evidence and testimony at the trial before they started deliberating Aug. 22. The panel was given more than two hours of instructions and a 20-page verdict form.

Apple, based in Cupertino, California, sued Samsung in April 2011, and Samsung countersued as part of a battle being waged on four continents over a smartphone market valued at $219.1 billion according to Bloomberg Industries. The companies have also sued each other in the U.K., Australia and South Korea.

Questions over damages awards were among the more than 600 questions the jury was asked to address. Apple sought $2.5 billion to $2.75 billion for its claims that Suwon, South Korea- based Samsung infringed four design patents and three software patents in copying the iPhone and iPad. Samsung's demand for as much as $421.8 million in royalties was based on claims that Apple infringed five patents.

Apple also wants to make permanent a preliminary ban it won on U.S. sales of a Samsung tablet computer and extend the ban to Samsung smartphones. U.S. District Judge Lucy Koh, who presided over the San Jose trial, would decide that question herself without the jury.

Apple, Samsung the Two Biggest Smartphone Makers

The patent disputes began when Samsung released its Galaxy smartphones in 2010. Steve Jobs, the co-founder of Apple who died Oct. 5, initiated contact with Samsung over his concerns that the Galaxy phones copied the iPhone, according to trial testimony.

Samsung and Apple are the world's two largest makers of the high-end handheld devices that blend the functionality of a phone and a computer. They are battling each other in courts even as they are bound by commercial deals involving components supply. Apple accounts for about 9 percent of Samsung's revenue, making it the company's largest customer, according to a Bloomberg supply-chain analysis.

Smartphone Sales on the Rise

In the second quarter of this year, consumers worldwide bought 406 million mobile phones compared with 401.8 million in the same period last year, with Samsung and Apple shipping almost half of those phones, according to IDC, a research firm based in Framingham, Massachusetts.

Samsung extended its lead over Apple during the second quarter, shipping 50.2 million mobile phones, representing 32.6 percent of the market, compared with 26 million units, or 16.9 percent of the market, for Apple, according to IDC.

Both sides have had legal victories. Apple won a U.S. court order on June 29 blocking sales of Samsung's Galaxy Nexus smartphone, the first smartphone to use Google Inc. (GOOG)'s Android 4.0 operating system. The product has remained on the market as Samsung appeals the order to the U.S. Court of Appeals for the Federal Circuit Washington.

In November, Samsung won a battle in an Australian court that allowed customers to buy Samsung's rival to the iPad.

A Seoul court earlier today ordered each company to stop selling some smartphones and tablets in South Korea and pay damages after ruling that they infringed each other's patents.

The case is Apple Inc. v. Samsung Electronics Co. Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net