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Samsung Peels Claims in Apple Trademark Fight

(CN) - Apple received a dressing-down about the fraud and antitrust claims it can make in trademark litigation with Samsung over smart phones and computer tablets.

The iPhone and iPad maker still has leave, however, to fix the problematic pleadings, U.S. District Judge Lucy Koh ruled.

The global fight started in San Jose in April with Apple's federal complaint alleging that Samsung's new Galaxy smart phones and tablet computers "slavishly copy" the design and function of Apple's iPhone and iPad. Samsung "even misappropriated Apple's distinctive product packaging," according to the complaint.

Tuesday's pretrial order addresses Samsung's motion to eliminate some of Apple's fraud and antitrust counterclaims. Though Koh did not touch many of Apple's most important claims, she rejected the way that Apple had accused its Korean competitor of defrauding standards setting organizations.

Apple did not specify the patents for which it alleged Samsung had submitted false declarations to the organizations, such as the European Telecommunications Standards Institute (ETSI), Koh said.

Companies that propose standards that include their own intellectual property rights must also agree to license certain essential patents on terms that are FRAND, an acronym for fair, reasonable, and non-discriminatory.

"Although there does not appear to be anything legally defective about Apple's theory of monopoly conduct arising from false FRAND licensing terms, the court finds that Apple's allegations, as pled, have failed to meet the heightened pleading standard (for fraud)," Koh wrote.

The judge also rejected the notion that Samsung's handling of its intellectual property rights amounted to monopolistic antitrust behavior.

Apple had argued that Samsung failed to disclose intellectual property rights in a patent that would be essential to a standard proposed by Samsung, and that such failure constituted an antitrust violation.

While Apple successfully showed Samsung did not disclose a key intellectual property right, Koh said it nevertheless failed to show that "a viable alternative technology performing the same functionality would have been incorporated into the ... standard, or the relevant functionality would not have been incorporated into the standard at all," if it had made the disclosure.

The last part of Koh's order struck Apple's state-law claim for unfair competition as being basically the same as its claim for federal antitrust violations.

Koh's decision came as the parties wait for her ruling on a motion to stop Samsung from selling the Galaxy products in the United States, which Apple says is fair until its trademark and trade dress allegations are resolved.


More than 20 lawsuits between the technology giants are under way in nine countries besides the United States.

Last week, an Australian court ruled that Samsung must continue to delay the release, originally slated for mid-August, of the Galaxy Tab 10.1 there until the court can determine whether Samsung violated Apple's iPad patents in Australia.

Apple has done well in Germany, winning two injunctions there, though it had to admit to altering a photo of the Galaxy Tab in court filings, even if it said the


That alteration, which Apple said happened by mistake, increased the apparent similarity between Samsung's product and the iPad.

A Dutch court banned the sale of Galaxy S, SII and Ace phones in the Netherlands, though sales of the Galaxy Tab 10.1 tablet computer are all right.

Also in the Netherlands, Samsung failed to secure an injunction of its own when a court found that Samsung's 3G patents were part of essential standards that are subject to licensing under FRAND terms.


Courts around the world differ in their views of patent protection, especially in the area of trade dress, which includes overall product designs and graphic interface, the two areas on which Apple is focused. Samsung, which holds strong wireless patents, is primarily making FRAND claims.

Apple stands the best chance with the trade-dress claims in the United States, where a product design infringes when its appearance and function are so easily confused with those of an existing product that a consumer buys the new one thinking it is the existing one.

To make an impression that tablet computers were not Apple's idea, Samsung cited Stanley Kubrick's 1968 movie "2001: A Space Odyssey" as "prior art" that protects Samsung from Apple's infringement claims.

An August filing in the U.S. action said that, like the iPad, "the tablet disclosed in the clip has an overall rectangular shape with a dominant display screen, narrow borders, a predominately flat front surface, a flat back surface (which is evident because the tablets are lying flat on the table's surface), and a thin form factor."


Last week, Apple gave a hint as to its thinking when it filed papers in California to bring the court's attention to a federal ruling that came out Thursday in an Washington intellectual-property case involving windshield wiper blades.

In that case, Robert Bosch LLC won a preliminary injunction against Pylon Manufacturing, which Bosch accuses of taking innovative wiper blade technology.


Two major retailers have also weighed in, filing amicus briefs related to Apple's motion for injunctive relief, which has yet to be decided.

T-Mobile USA and Verizon filed papers siding with Samsung. The retailers, which prominently feature the phones, say their Christmas sales will suffer if the court forces them to remove Samsung's wildly popular smartphones and computer tablets from the shelves.


As the world's top two manufacturers of smart electronic devices lock horns in the courts, and the stakes of their competition grow, their history as trading partners seems vulnerable.

Apple shipped nearly 39 million smartphones in the first half of 2011, compared to Samsung's 32.2 million, according to IHS iSuppli, a market-research firm. Samsung's sales growth is strong enough, however, for it to possibly take the top spot next year.

As trading partners, Samsung has long supplied Apple with electronic parts, and Apple is now Samsung's biggest customer, expected to buy more than $7 billion of processing chips and LCD screens for iPhones and iPads from Samsung in 2011.

The relationship between Apple and Samsung began in 1983 when Steve Jobs, the recently deceased Apple co-founder and chairman, traveled to Seoul to meet the family that owns Samsung and discuss chips for the Macintosh computer, according to Seoul's daily newspaper Dong-A Ilbo, or East Asia Daily.

Jobs' death on Oct. 5 prompted Samsung Electronics chief executive G.S. Choi to say that "his innovative spirit and remarkable accomplishments will forever be remembered by people around the world."

Choi also said, "Chairman Steve Jobs introduced numerous revolutionary changes to the information technology industry and was a great entrepreneur."

Another sign of the deep connection is that Lee Jae-yong, the president and chief operating officer of Samsung, is expected to attend Jobs' upcoming private memorial service.

Samsung even postponed the launch of its Nexus Prime phone out of respect for Jobs.

But with Jobs' passing and the legal contest growing, Apple may start looking for other sources of chips and screens.

Michael Jacobs, Harold McElhinny, Jason Bartlett and Grant Kim with Morrison & Foerster represent Apple.

Charles Verhoeven, Victoria Maroulis and Kevin P.B. Johnson with Quinn Emanuel Urquhart & Sullivan represent Samsung.

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