Infringe IP at your Peril

Infringe IP at your Peril

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The news that Samsung has been ordered to pay Apple some US$ 1 billion in damages has brought to light the seriousness of IP infringements. Many legal commentators are viewing this ruling as the start of a new wave of massive legal battles.

Elaine de Beer, a patent attorney at ENS (Edward Nathan Sonnenbergs), provides insight on some of the implications of this ruling.

What happened?

On 24 August 2012 a US jury found that a number of patents owned by Apple, and that relate to the technology used in and appearance of, the iPod and IPad products were valid. It held that Samsung had infringed these patents in its Galaxy smartphones and Galaxy 10 tablet and that Samsung’s infringement had been ‘wilful’. It also dismissed Samsung’s counterclaim that Apple had infringed various patents that Samsung owns.

Which patents were infringed?

  • The so-called ‘bounce-back response’, which makes lists jump back.
  • The ‘pinch-to-zoom’ feature, which the user uses to magnify images.
  • The feature that allows the user to zoom into text by tapping their finger.
  • The appearance of the iPhone (including the system of displaying text and icons), which is protected by way of design patents.

What does the decision mean?

From a legal point of view, it’s very significant, although it’s not yet clear whether Samsung will be prevented from selling its products in the US. There will be a further hearing on 20 September 2012, at which the judge will decide whether to issue a sales injunction, or alternatively an order requiring Samsung to pay licence fees to Apple. At this hearing the judge will also decide whether to confirm the damages award or increase it. Samsung has already made it clear that, whatever happens, an appeal will be lodged.

Significant commercial implications

The market for smartphones and tablets is huge, with Apple and Samsung accounting for more than half of all sales. If Samsung is barred from selling its products in the US, it will be an enormous boon to Apple and a very large blow to Samsung (although the company apparently has a new generation of products that avoid the patent issues). To further complicate matters, Apple is a major customer of Samsung’s, buying a large number of its chips from the South Koreans.

It’s also worth noting that Samsung’s products are powered by Google’s Android, a system that is used by other smartphone manufacturers too. Some commentators have described Apple’s attack on Samsung as a ‘proxy war’ against Google, and predicted that Apple will go after Google next.

The lessons learnt

  1. Innovation and design can be legally protected – in South Africa technical innovation is protected through patents, whereas product design, such as shape or configuration, is protected through design registrations which, like patents, also require novelty.
  2. You cannot ignore patent and other intellectual property rights when you bring a new product to market – infringements can and will be punished, with huge damages awards where necessary.
  3. It’s proof that intellectual property is enormously valuable – for many technology companies intellectual property rights, and especially patents, form the basis of the business, and these companies often have huge patent portfolios that are in themselves worth vast sums. Some, known as patent trolls, even acquire patents not because they need the technology, but simply so that they can enforce the patents against other companies.
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