Friday, July 1, 2011

Samsung's defense against Apple's California lawsuit scoffs at Apple's attitude

Late on Thursday, Samsung filed its answer, affirmative defenses and counterclaims -- which I uploaded to Scribd -- to the amended version of Apple's complaint in Northern California.

Most of the document consists of "boilerplate" and the usual wholesale denial of all allegations, but there are a few interesting things to say about it. In particular, Samsung scoffs at Apple's attitude toward its competition by (repeatedly) stating the following:

"The Samsung Defendants admit that they have not ceased competing with Apple notwithstanding Apple's efforts to avoid such competition."

The term "Samsung Defendants" means the legal entities (Samsung's Korean parent company and two U.S.-based subsidiaries) that Apple is suing.

Funny as Samsung's ironic remark may seem, that's the obvious position for Samsung to take. While Apple describes Samsung as "the copyist", Samsung naturally argues that it's just competing. Intellectual property and competition are two conflicting goals. The question is how to reconcile them. If all copying is allowed, there's probably a lot of competition, but investment in innovation and the introduction of new products won't be sufficiently incentivizied. Innovators need a certain "breathing space" -- but there must also be room for (fair) competition. I believe Samsung has stepped over that line, though probably not as far as Apple claims.

Not only does Samsung suggest between the lines that what Apple calls "copying" only amounts to "competition" but Samsung also stresses its own role as an innovator and its own patent portfolio:

"From 2005 through 2010 alone, Samsung invested more than $35 billion in research and development. More than a quarter of all Samsung employees -- over 50,100 engineers overall, including about 8,700 in telecommunications -- daily engage in cutting-edge research and development projects."

"[...] Samsung has in its portfolio as of April 1, 2011, 28,700 United States patents, including 5,933 in the telecommunications field. Samsung is consistently ranked ahead of other technology companies in terms of the number of issued patents obtained in the United States, with 4,551 issued patents in 2010 alone."

Samsung also points out its market position:

"During the last half of 2010, Samsung sold more Android-based devices worldwide than any other company."

Consolidation: Samsung drops its separate California suit and integrates its essence into its defense against Apple's lawsuit

Samsung originally filed a separate countersuit about two weeks after Apple filed its complaint with the same district court. Yesterday Samsung filed a notice of voluntary dismissal of that separate lawsuit because the judge had suggested that Samsung convert it into counterclaims against Apple's complaint, for the sake of a more efficient process. It's also in Samsung's interest to do so: this way Apple's claims and Samsung's counterclaims will be adjudicated at the same time.

I have also updated my battlemap accordingly. This is what it looks like now:


Samsung drops 2 patents, adds 4: net gain of 2

Samsung modified its patent infringement counterclaims in California, dropping two of the originally asserted ten patents but adding four new ones. Samsung is now asserting 12 U.S. patents against Apple in California, in addition to the 5 asserted in Samsung's very recent ITC and Delaware complaints.

The following two patents were dropped (maybe they will resurface elsewhere):

  • U.S. Patent No. 6,292,179 on a "software keyboard system using trace of stylus on a touch screen and method for recognizing key code using the same"

  • U.S. Patent No. 7,009,626 on a "systems and methods for generating visual representations of graphical data and digital document processing"

Samsung added the following four patents:

  • U.S. Patent No, 7,079,871 on a "portable telephone and method of displaying data thereof"

  • U.S. Patent No. 7,456,893 on a "method of controlling digital image processing apparatus for efficient reproduction and digital image processing apparatus using the method"

  • U.S. Patent No. 7,577,460 on a "portable composite communication terminal for transmitting/receiving and images, and operation method and communication system thereof"

  • U.S. Patent No. 7,698,711 on a "multi-tasking apparatus and method in portable terminal"

Samsung has responded vigorously -- almost furiously -- to Apple's original lawsuit. It's quite a logistical challenge to bring complaints and manage cases before eight courts in six countries on three continents. But I have no doubt that Apple can cope with the situation. It owns patents around the globe, and it can hire lawyers wherever it needs them. Apple has been doing business with Samsung for a long time and will have evaluated its counterpart's tactical options prior to embarking on this adventure.

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