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8/24/2012
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Apple, Samsung Both Violated Patents: South Korean Court

The decision helps Samsung, but is it fair?

Apple iPhone 5 Vs. Samsung Galaxy S III: What We Know
Apple iPhone 5 Vs. Samsung Galaxy S III: What We Know
(click image for larger view and for slideshow)
A court in South Korea has found that Apple and Samsung are both guilty of infringing each other's patents. The Seoul Central District Court ruled that Apple infringed two Samsung patents and that Samsung infringed one Apple patent. Both companies have been ordered to pay nominal penalties: Apple must pay 20 million won, or about $17,625, according to the Wall Street Journal; Samsung must pay 25 million won, or about $22,034.

Both companies now face injunctions in South Korea on the sale of older products. Reuters reports that Apple can no longer sell four products, including its iPhone 4 and iPad 2, in South Korea. Samsung faces a similar prohibition on ten of its products, including its Galaxy SI and SII and its Galaxy Tab and Galaxy Tab 10.1 tablets.

According to the BBC, Apple's patent covers the bounce-back scrolling animation found in iOS, while Samsung's patents cover optimization techniques for wireless data transmission.

[ For more on the Apple/Samsung case, read Apple, Samsung Expert Witnesses Reap Big Bucks. ]

Apple's claim that Samsung copied its product designs, presently being considered by a jury in a separate case in San Jose, Calif., was rejected by the South Korean court.

The U.S. patent case is seen as more significant because of the potential damages--Apple is seeking $2.5 billion--and the potential loss of access to the U.S. market following an adverse decision. Samsung is pressing counterclaims against Apple in the U.S., though many of those following the case believe Apple is likely to prevail. The jury in the U.S. case could return a verdict on Friday but the number of issues that need to be considered suggests that a verdict might not be reached until next week.

Apple did not respond to a request for comment. Samsung declined to comment.

Florian Mueller, an intellectual property consultant who counts Oracle among his clients, suggests the ruling marks the start of an intellectual property trade war. The decision, he said in a blog post, indicates "that South Korea has decided to become a rogue state in connection with standard-essential patents, essentially telling foreign companies that in order to sell their technology products to the country's 50-million population, they must bow to extortion by Samsung and LG."

The two Samsung patents at issue in the case, Mueller claims, have been identified as standard-essential patents. Such patents are generally made available under fair, reasonable, and non-discriminatory terms (FRAND). He says the ruling means that foreign companies will "either have to bow to Samsung's and LG's demands and, among other things, give up their own non-standard-essential intellectual property or stop selling in [South] Korea," and he argues the issue may need to be settled by the World Trade Organization.

In short, Mueller sees a ruling skewed by nationalism.

Charles Golvin, principal analyst for Forrester Research, observes that while the South Korean government has supported South Korean companies with policy decisions, he hopes that's not the case with judicial decisions.

"Historically, the South Korean government has made explicit efforts to support South Korean companies, especially in the telecom space," he said in a phone interview. "For example, when the government there issued the original spectrum grants for networks, they specified the CDMA technology that Samsung in particular was focused on. This was an effort I think to boost the ability of Samsung and other South Korean telecom vendors to establish a foothold in a growing market and to position them well for exporting their technology in other markets."

Of course, that raises the question of how a U.S. jury will treat a foreign company like Samsung in its dispute with Apple, one of America's more widely admired companies.

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