Small Win for Apple in Patent Case -- Update

By Dow Jones Business News, 
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By Daisuke Wakabayashi and Ian Sherr

SAN JOSE, Calif.-- Apple Inc. won a small victory in its latest patent dispute with Samsung Electronics Co., but largely failed in its attempt to slow competitors to its landmark iPhone.

A federal-court jury ruled Friday that some Samsung devices infringed on two Apple software patents, but didn't infringe on two others; the judge had earlier ruled that Samsung infringed on a fifth patent.

The jury ordered Samsung to pay Apple $119.6 million in damages, far short of the $2.2 billion Apple had been seeking, and less than the $930 million Apple was awarded in an earlier trial in the same courtroom.

The same jury ruled Friday that Apple infringed on one Samsung patent and awarded Samsung$158,400.

The eight-member jury deliberated for three days, following four weeks of testimony.

One legal analyst called the verdict a victory for Samsung. "This amount is less than 10% of the amount Apple requested and probably doesn't surpass by too much the amount Apple spent litigating this case," said Brian Love, assistant professor at Santa Clara University School of Law. "Apple launched this litigation campaign years ago with aspirations of slowing the meteoric rise of Android phone manufacturers. It has so far failed to do so, and this case won't get it any closer."

Samsung, the largest manufacturer of handsets running Google Inc.'s Android operating system, blew past Apple to become the world's largest smartphone maker. It has rolled out a wide range of phones in varying screen sizes and prices while Apple has maintained a smaller product lineup geared toward high-end consumers.

But both companies have been losing market share--particularly to upstart Chinese rivals--while they battle in courtrooms around the world. Two years ago, Apple and Samsung accounted for more than 55% of world-wide smartphones shipments, according to research firm Strategy Analytics. In the first quarter, that fell to 47%.

Samsung said Tuesday that quarterly operating profit at its mobile division fell from a year earlier for the first time since 2010. Apple's annual profit fell last year for the first time in more than a decade.

An Apple spokeswoman said Friday's ruling reinforced its belief that Samsung "willfully stole our ideas and copied our products." She added the company will fight to defend "the hard work that goes into beloved products like the iPhone."

Unlike the earlier trial, which focused on hardware patents, Google played a prominent role in this case. Samsung said Google independently developed many of the software features at the heart of this case before Apple introduced the iPhone in 2007. Samsung said Apple's dispute was with Google, and painted Apple as obsessed with Google--pointing to an email by former Apple co-founder Steve Jobs declaring a "holy war" with the search giant.

Apple has sued other phone makers that use Android, including HTC Corp. of Taiwan, but hasn't gone after Google directly. Google licenses Android free, making it a difficult target for a damages claim. Google designs a few smartphones and tablets, but it doesn't sell many compared with its hardware partners.

Google didn't respond to requests seeking comment.

In Friday's verdict, some Samsung devices, including the Galaxy Nexus and the Stratosphere, were found to have infringed Apple patents for "data tapping," the feature that dials a phone number included in an email. Some of Samsung's products were also found to infringe Apple's "slide to unlock" patent, which covers the way customers move their finger across a screen to gain access to a device.

The jury also awarded damages based on Samsung's infringement of Apple's "auto-complete" patent, which offers suggestions to customers about how to change or complete a word as they are typing on a keyboard. Friday evening, U.S. District Judge Lucy Koh asked the jury to reconsider its verdict on one Samsung phone that infringed on the auto- complete patent, because it awarded no damages to Apple in that instance. The jury will reconvene Monday.

"It is inappropriate to comment while the jury is still deliberating," a Samsung spokesperson said.

The two patents Samsung didn't infringe, according to the jury, were Apple's patents that covered Siri-style search and another for synchronizing data.

Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com and Ian Sherr at ian.sherr@wsj.com

Corrections & Amplifications

The jury awarded Apple $119.6 million in damages. A previous version of the article incorrectly said the jury awarded Apple $119.6 in damages.

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This article appears in: Technology

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