Apple Closes, Urging Big Damages For Samsung

Apple iPhone 5 Vs. Samsung Galaxy S III: What We Know

In San Jose, Calif., Tuesday, attorneys made closing arguments in the Apple vs. Samsung trial. It took Judge Lucy Koh two hours to read aloud the list of instructions on how the jury should decide the trial's separate issues before the case was sent to the jury.

At the end of the reading, the seven men and two women were newly minted experts in U.S. patent law and/or staggered by the task that lies in front of them. Before their task is done, they will have filled out a 70-page form dealing with the issues in the case. One observer, Ted Smith, a coordinator for the International Campaign for Responsible Technology, shook his head in disbelief at the end. "This is the kind of case that shouldn't go to a jury," he said. Rather it should be decided by a panel of judges well-versed in patent law.

But the two parties failed in an arbitration attempt to come to any agreement. At the judge's direction, the CEOs of the two firms consulted again with the same result. One side or the other wants the case to go to a jury verdict, and many observers believe that it's Apple, playing for a stunning blow from a jury chosen from a populace steeped in the legend of Steve Jobs.

The stakes have grown with the evolution of the case. Apple attorneys had opened with charges that Samsung copied it and infringed specific industrial design and utility patents. The task of making those charges stick in a closing statement fell to Harold McElhinny of the San Francisco law firm of Morrison Foerster (a.k.a. Big Mac of Mofo, in the gallery's shorthand). McElhinny stands six feet two and is solidly built.

In closing, he gave a straight-ahead narrative of Samsung suffering from the iPhone's competition, then gathering its design experts from three different plants in Korea to do a crash project of duplicating the iPhone's features in its Galaxy line. With multiple iPhone-like models, he said, Samsung began to thrive.

[ Learn more about how testimony wrapped up. See Samsung Gets In Last Word Against Apple. ]

"Steve Jobs started the iPhone development project in 2003," he reminded the jury, invoking the late CEO's name just once. Nevertheless he succeeded in tying the iPhone design directly to Jobs' initiative and legacy. Apple produced sketches, CAD drawings, designs, and redesigns during the trial to show how the company prepared to enter the phone market "at enormous risk."

"I was floored," he continued, "when I heard (Samsung designer) Jeeyuen Wang say they did it in three months. That represented four years of investment and R&D" at Apple, he said. By the end of his summation, he said Samsung was liable for up to $2.75 billion, not the $2.5 billion with which the trial had started out.

Samsung has sold 22.7 million phones and tablets during the period in which Apple charges it with infringement--since June 2010. (Apple lumps all Samsung models together, about 150 of them, to come up with the damages figure; in fact, it named 20 as infringing.) Samsung received $8.16 billion in revenue from all sales in the period. "The job we're asking you to do is decide how much of that $8.16 billion we should receive," said McElhinny.

Another Apple attorney, Bill Lee from the San Francisco firm of Wilmer Hale, carried the argument beyond monetary into punitive territory. What was at stake in this trial was more than whether Apple could receive damages. The system of protecting technical inventions by obtaining patents, one of the founding principles of Silicon Valley, was at stake.

"You're going to have to decide who is playing by the rules and who isn't ... If you render a judgment for Apple, you will be endorsing the American patent system," Lee said.

Lee also suggested that the jury needed to show Samsung that "you can't come in and walk over our antitrust laws." It was a somewhat obscure reference, not to patents, but to Apple's claim that Samsung has embedded its patented technology in the 3GPP cellular network standard. As such, it has gained monopoly power over a standard that cellphone manufacturers can't do without.

Furthermore, in deciding to tar its business partner Samsung (the firm supplies 26% of the iPhone's parts), Apple opted to use a wide brush. It charged Samsung with being a bad actor and not playing by the rules on disclosing patents to the standards setting process that created the 3GPP standard.

Some of that claim seemed far-fetched. But on the whole, the McElhinny/Lee team wove a straight ahead, factual narrative, tied to a chronology of how the Samsung infringement took place. In a few instances, such as the three-month crash redesign of Samsung phones, recounted by Jeeyuen Wang, a dignified young mother, the testimony of Samsung's own witnesses seemed to buttress Apple's case.

As Lee finished, McElhinny popped up again. "Samsung spent $1 billion advertising" its look-alike phones, he noted. "One way Samsung wins is if you compromise the damages. They will not change their way of operating if you just slap them on the wrist," he told the jury.

Given the task of rebutting all this and building Samsung's case was Charles Verhoeven, the good cop partner from Quinn Emanuel in Los Angeles, whose emotive, imploring voice repeatedly focused the jury's attention on facts favorable to Samsung. Because he had such a large presence in the courtroom, it was startling to see his five-foot-nine-inch, slender frame side-by-side with McElhinny's tall, robust figure.

Verhoeven at moments had been brilliant at eliciting facts contrary to an Apple witness' stated message. One such witness, bobbing and temporizing in face of persistent Verhoeven questioning, had feigned sympathy: "I'm trying to help you out here."

"Oh, I doubt that," shot back Verhoeven.

The jury, tired of the obfuscation on both sides, had laughed heartily at the unabridged sincerity, as had the judge and most of the courtroom. But Verhoeven in closing had a Herculean task. Samsung's success as a smartphone producer had been tied in a simple Apple chart, a sort of courtroom flashcard, to its adoption of a more Apple-like design. Apple often maintained the upper hand in courtroom graphics. It conveyed its dismay at finding smartphones on the market that looked much like the iPhone by producing another graphic that showed Samsung's blocky designs before the launch of the iPhone and the graceful, rounded device corners and big screens of its designs soon after.

Verhoeven started there. Apple's graphic of Samsung's models was highly selective, he said. The square-ish phones Apple showed Samsung producing before the iPhone were a fraction of its inventory. In fact it had many designs in play, including several phones with rounded corners, before the iPhone was launched in 2007, Verhoeven said, showing a crowded placard with many Samsung designs.

Verhoeven attacked Apple's design patent claims, realizing Samsung is most vulnerable there and $2 billion of Apple's claims against Samsung will come from damages collected on design patents, if they're held to be infringed.

He cited the many small differences between an iPhone and a Samsung phone, even though they might look similar. Apple compares its home screen to the Galaxy's application screen, each showing a four by four grid of colorful icons, executed as squares with rounded corners. The Samsung phones don't have any equivalent icons for seven that are found on the iPhone, he pointed out. Although both phones appear to have similar sized and shaped icons, "You're not telling me Apple owns colorful icons and the right to arrange them in rows and columns," he said.

The two that are similar are the Ma Bell phone handset, formerly used as a symbol on public phone booths, with a green background, and a clock icon, which is a different color on the Galaxy. "Apple doesn't own green for go, does it?" Verhoeven persisted.

He went over the design differences between Galaxy models versus the iPhone. The iPhone has a flat face, the Galaxy a ridge around the edge of the screen where a metal bezel overlays the glass and protects it from being scratched if it's laid down. The bezel on the iPhone is of a uniform thickness around the touchscreen; on the Galaxy, it's of a varying thickness.

His points were factual, but patent law only asks that "the ordinary observer" find "substantial similarity" in the ornamental design of an object. Judge Koh's instructions to the jury were explicit in calling for them to ignore other factors and concentrate on the impression of the overall design. Glanced at on a screen side by side, they look similar but it's hard to tell whether all members of a jury will unanimously decide that the similarities are enough for a judgment of copying.

Verhoeven attacked the notion that the average consumer would be so confused by the similarity of the two that he might buy a Samsung phone or tablet thinking it was an iPhone. In pinning down one Apple witness after another, he didn't ask if they thought a consumer might be confused. He asked if they knew of any consumers who had made that mistake. None had. Susan Kare, a former Apple employee and icon expert, had declared in her testimony she picked up a Galaxy model off the table at Apple's attorney's office, thinking it was an iPhone.

Apple's attorneys referred to Best Buy store experience where some returns of Samsung Galaxy Tab 10.1s were by consumers who claimed they had thought they were iPads. But no evidence was established that corroborated the attorneys' statements.

Verhoeven illustrated how far from copying Samsung had gone in its home screen, which starts with the Samsung logo and a mechanical voice pronouncing Droid (for the Android family of smartphones), requiring the user to navigate through two screens to get to the application screen that looks somewhat like the iPhone's home screen. But he was facing an uphill battle, when patent law deals only with a single dimension of an invention, the ornamental design drawings filed with a design patent. It has no capacity to capture the multiple steps of turning on and navigating through multiple screens of a modern electronic device to determine whether they, as a whole, are similar.

"All the arguments about booting up and moving through those screens are irrelevant," McElhinny warned the jury during his turn, citing the judge's instructions.

Verhoeven pointed out the four buttons at the bottom of the Samsung application screen and cited Apple's Christopher Stringer's testimony that Apple wanted only one button at the bottom of the device.

He also pointed out the relationship between some design elements and the function of the smartphone. An element of design dictated by function can't be protected by a patent, and one such element is the speaker hole for the ear. It tends to be located in a similar location on many smartphones, not because their designers are copying Apple, but because of the relationship of the human ear to the mouth.

The Apple suit against Samsung in the end isn't about a patented design, he concluded. "The real reason Apple brought this case, rather than competing in the marketplace, is because it's seeking to block its biggest competitor ... It wants to keep its most serious competitor from even attending the game."

The Silicon Valley where Steve Jobs grew up and thrived was based on competition, not the narrow details of design patents. In smartphones, design reflects the changing functions on the device and big touchscreens are replacing pushbutton number pads below small screens.

It's like walking into a store selling televisions and the different flat-screen models look much alike, continued Verhoeven. "Form follows function ... Many smartphones today look like the iPhone. Are they all copyists? Yet Apple wants to $2 billion for the infringement of ornamentation, its design patents."

"Is anyone really deceived by the Samsung design? Apple has no credible evidence of it," he said. But again, the judge's instruction warned that proof of people being fooled by copies is not required under patent law. They only need to find "substantial similarity" in the eyes of "the ordinary observer."

Both sides mustered their cases well, said Nick Tran, a former software developer for eBay, currently between jobs, who observed the closing arguments with his college-age son, who is a pre-law student. "But Apple has the more cohesive narrative," he said. Now the case is in the hands of the jury, which starts deliberations at 9 a.m. Pacific time Wednesday.