Samsung Wins Bid to Arbitrate Consumer Beef

SAN JOSE (CN) - A federal judge upheld Samsung's contract provision that prevents consumers' sales disputes - in this case, the value of smartphones that infringe Apple patents - from proceeding as class actions.

According to plaintiff Hoai Dang's class action, Samsung has "repeatedly infringed the patents of its chief competitor, Apple," and he contends had he known the phone he purchased for $199 "infringed" on patents he would not have bought it.

Dang also claimed that because of Samsung's infringements, the South Korean giant's cellular products are worth far less than what consumers paid and that the resale value of the smartphones has "dropped dramatically" following patent-infringement verdicts in favor of Apple.

However, included with Dang's Galaxy SIII purchase contract is an arbitration provision that says any dispute arising from customer sales cannot proceed as part of a class action.

According to the 19-page order filed Monday by U.S. District Judge Lucy Koh, although Dang "may have been 'completely unaware' of the arbitration provision, this fact is of little help to him. It is well established under California law that 'a party cannot avoid the terms of a contract by failing to read them.'"

Koh ruled Samsung adequately showed the arbitration provision was not "inconspicuous," and that because Dang had not used the "opt-out procedure," within the contract his consent to the provision is implied.

In four other cases, three federal judges in two different judicial districts enforced arbitration provisions nearly identical to this one against Samsung Galaxy smartphone purchasers, Koh said.

Neither Samsung attorney Mark Dosker nor Dang's attorney Karla Gilbride could immediately be reached for comment.

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