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Apple & Samsung Patents Get a Closer Look

SAN JOSE, Calif. (CN) - A federal judge handed Apple and Samsung a mixed bag of decisions in their ongoing patent war over cellphone and tablet technology.

Though a jury took less than three days last summer to decide that Samsung infringed Apple's iPhone and iPad patents with its Galaxy line of products, the two companies have continued to battle over both the appropriateness of the verdict and $1 billion in damages that the jury awarded.

Samsung asked U.S. District Judge Lucy Koh to overturn the jury's verdict regarding five Apple patents - a utility patent and four iPad design patents, which the South Korean company argues are too vague to be valid. Koh disagreed.

"In sum, all of Samsung's alleged sources of indefiniteness concern how the design is represented, rather than the nature of the design itself," Koh wrote. "These ambiguities are not fatal to patents that this court must view with a strong presumption of validity. Accordingly, Samsung has not established indefiniteness by clear and convincing evidence, and Apple's design patents remain valid."

While she agreed with the jury that Samsung infringed Apple's patents, Koh found in a separate ruling that, as a matter of law, Samsung's acts of infringement were not willful.

"Where the jury found willfulness, the court must also find willfulness," she wrote. "If the court finds no objective willfulness, the inquiry is at an end, and the court need not consider whether the jury's finding of subjective willfulness was supported by substantial evidence. Conversely, if the jury found no subjective willfulness, the court need not consider objective willfulness, as the willfulness claim must fail either way. Here, the court sent the subjective prong of willfulness to the jury, and the jury found that Samsung's infringement was subjectively willful for five of the seven patents (three utility patents and two design patents). Thus, for these five patents, the court must find the objective prong also satisfied in order to make an ultimate finding of willfulness." (Parentheses in original.)

She also found that Apple failed to surmount Samsung's "objectively reasonable defense" that it believed the five Apple patents were invalid - for various reasons including indefiniteness and a belief the technology already existed.

Koh refused, however, to find that no Samsung products infringe Apple patents, and she said the trial proceedings were not prejudiced by time limits.

"Samsung was offered the option of bifurcating its affirmative case, but chose not to do so," Koh wrote. "Furthermore, Samsung and Apple had equal trial time and chose how to best allocate their allotted time. Samsung cannot now argue that its own litigation strategy created a manifest injustice that requires a new trial. As the court observed, 'Samsung made a strategic decision to spend more time to cross-examine Apple witnesses during Apple's affirmative case than Apple used to present its affirmative case.'"

Koh handed Apple its share of victories and defeats in the four orders. Noting a prior patent, she deemed invalid two patent claims of Samsung's system for data transmission over wireless networks, which entails chopping up data in discrete packets with headers containing information for reassembly after transmission.

"Apple has clearly identified where each of the allegedly missing elements is disclosed in a single prior art reference, as is required for anticipation, and Samsung has failed to respond to these arguments," she wrote. "The court finds that Apple has established anticipation by clear and convincing evidence."

Jurors properly found that Samsung did not violate antitrust laws by failing to disclose its intellectual property rights with the European Telecommunications Standards Institute (ETSI), she added.

"[Sherman Act liability] requires that Samsung's conduct has caused Apple harm," Koh wrote. "Apple's evidence that any breach of the disclosure policy by Samsung caused any harm suffered by Apple is not sufficiently strong to require the jury to find for Apple."

Koh also looked at Samsung's obligations to license patents on fair, reasonable, and non-discriminatory, or FRAND, terms. "Regarding FRAND obligations, Samsung's licensing behavior could only give rise to Sherman Act liability if it constituted anticompetitive behavior," she wrote. "However, the jury ... implicitly found that the conflicting testimony had not established that Samsung had failed to meet its FRAND obligations. In so finding, the jury could also reasonably have found that Samsung's licensing behavior was not anticompetitive, and thus did not meet the third requirement for Sherman Act liability."

One ruling also bars Apple from seeking treble damages on the jury's award of $382 million for trade dress dilution. Because Samsung's infringements were not willful, damage enhancements are not appropriate under the Patent Act, Koh wrote.

Apple's inconsistency also prohibits trebling the jury award under the Lanham Act, according to a fourth ruling.

"Apple has made no attempt to disaggregate losses caused by dilution, for which a court may permissibly award additional damages, from losses caused by patent infringement for which the court has found no enhancement can be awarded," Koh wrote. "A single award may compensate for more than one type of harm, but this does not mean that all of Apple's losses were caused equally by all of Samsung's intrusions into Apple's intellectual property."

She continued: "Further, Apple is making two inconsistent arguments: first, that money cannot compensate Apple for the harm its lost market share may cause going forward, and second, that the court should award $400 million to compensate Apple for lost market share. If an amount cannot be calculated to compensate for this loss, then it is unclear why $400 million would be an appropriate award."

After the trial, Samsung appealed the jury's decision to the Federal Circuit while Koh blocked Apple's attempt to ban sales of Samsung products last month. The two companies remain locked in a bitter worldwide war, with more than 50 battles in courthouses across five continents.

Meanwhile, a second U.S. trial - on Samsung's claims that the iPhones and iPads infringe on its patents - starts March 31, 2014, in Judge Koh's courtroom.

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