Wednesday, June 29, 2011

Samsung files ITC complaint against Apple:
long-time partners heading for ugly divorce? -- UPDATED

[last updated on Thursday, June 30, 2011]

The ITC website shows that yesterday Samsung filed complaint no. 337-2824 concerning the following types of products:

Mobile Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computer

"[T]he proposed respondent is Apple Inc., Cupertino, California."

I have published the ITC complaint on Scribd.

Samsung is asking for an import ban against the iPhone, iPad and iPod. If the ITC agrees to investigate such a complaint (which is pretty certain to happen here), a final decision is reached within 16 to 18 months.

Samsung first party (of the two) to involve the ITC

Apple recently amended its complaint with the U.S. District Court for the Northern District of California and countersued Samsung in South Korea (where Samsung had previously filed one of four complaints with which it responded to Apple's original complaint). While Apple may soon seek a preliminary injunction against the Galaxy product range in federal court, Apple has not (yet) filed an ITC compaint against Samsung (though Apple routinely lodges and defends itself against ITC complaint, such as in its disputes with Nokia, Motorola, HTC and Eastman Kodak).

Samsung also sues in Delaware and (maybe before this week) UK and Italy

This dispute is even bigger than it seemed yesterday when the ITC complaint became known. In addition to what was known then, there are also lawsuits in the state of Delaware and in two more countries -- the United Kingdom and Italy.

[LINK: visualization of the battlelines in this worldwide patent war]

The DocketReport, a great subscription service offered by DocketNavigator, has published a Samsung complaint against Apple that was filed with the U.S. District Court for the District of Delaware over the same five patents that Samsung asserts in its ITC complaint. Bloomberg also reported. Such lawsuits, often called "companion lawsuits", are filed most of the time because the ITC can order an import ban but not award damages. What happens is that if the ITC investigates a case, it's normally stayed at the federal court until the ITC case is over. Then the federal case is resumed to determine damages. (More likely, the parties will have settled in the meantime.)

The Wall Street Journal now reports on lawsuits filed by Samsung against Apple in the UK and Italy that I had not heard about before. I was "only" aware of lawsuits in the US, Japan, South Korea and Germany. So they are now fighting each other in three venues in the US (ITC, Northern California, Delaware), in two Asian countries (Japan and South Korea) and in three European countries (Germany, UK, Italy). That's a total of eight venues in six countries on three continents.


These are the patents Samsung asserts in its ITC and Delaware complaints:

  • U.S. Patent No. 7,706,348 on an "apparatus and method for encoding/decoding transport format combination indicator in CDMA mobile communication system"

  • U.S. Patent No. 7,486,644 on a "method and apparatus for transmitting and receiving data with high reliability in a mobile communication system supporting packet data transmission"

  • U.S. Patent No. 6,771,980 on a "method for dialing in a smart phone

  • U.S. Patent No, 6,879,843 on a "device and method for storing and reproducing digital audio data in a mobile terminal"

  • U.S. Patent No. 7,450,114 on "user interface systems and methods for manipulating and viewing digital documents"

Supplier-customer relationship lower priority than intellectual property fight

I have recently seen various reports according to which Apple has already decided to dump Samsung as a component supplier, at least with respect to chipsets. I don't know if those reports are true, but this would make a lot of strategic sense. We're looking at two fundamentally different value propositions. Manufacturing electronics components for third parties is a low-margin business compared to the opportunity of being a major consumer brand for mobile devices. That's why Samsung would rather defend its Galaxy and other nameplate products than back down only to retain Apple as a customer for its manufacturing operations. And Apple would rather find other suppliers than be limited in its enforcement of intellectual property rights by supply chain considerations.

These two companies appear to have set very clear priorities, and they may be heading for an ugly divorce.

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