legal

You may have heard about “prior art”. In patent law, prior art is basically all information made available publicly before a date which might be relevant to a patent’s claims of originality. Hence, if any invention can be described in prior art, its patent can be invalidated. Samsung is resorting to some pretty sci-fi (literally!) arguments in its legal spat with the Cupertino gadget maker, having gone as far as citing Stanley Kubrick’s ‘2001: A Space Odyssey’ movie as prior art against Apple’s tablet.

The finding, discovered by intellectual property expert Florian Mueller on his blog FOSS Patents, stems from page two of an exhibit Samsung filed with the U.S. District Court for the Northern District of California. The document reads:

Attached hereto as Exhibit D is a true and correct copy of a still image taken from Stanley Kubrick’s 1968 film “2001: A Space Odyssey.” In a clip from that film lasting about one minute, two astronauts are eating and at the same time using personal tablet computers. The clip can be downloaded online at http://www.youtube.com/watch?v=JQ8pQVDyaLo. As with the design claimed by the D’889 Patent, 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.

The prior art claim is in Samsung’s defense against Apple’s motion for a preliminary injunction. The company recently claimed in a Dutch court that Apple doctored Galaxy smartphone images.

Cross-posted on 9to5Mac.com

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The web is abuzz with the news that Google is snapping up Motorola Mobility in a deal valued at $12.5 billion. And while there are concerns that Google is pursuing the deal purely for the patents, CEO Larry Page said in a blog post that the agreement will let them “supercharge the Android ecosystem” by fending off patent threats from Apple, Microsoft and other companies. In addition, he dropped hints of “wonderful user experiences” in a nod at tightly integrated devices that Apple famously builds.

Now, conventional wisdom has it that the transaction will put other Android backers in an uneasy position as they get to compete with Motorola on an uneven playing field. Not to worry, Boy Genius Report has reactions from major Android backers that appear to be upbeat about the deal. For example, J.K. Shin, president of Samsung’s Mobile Communications division says:

We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.

The publication quoted similar statements by executives from HTC, LG and Sony Ericsson that Google published on their site. On the other hand, as noted by Business Insider, Android backers cannot be satisfied with the outcome of this time, regardless of their voice of support. TIMN wonders what this deal means for the future of Motorola products and the level of Google’s involvement in product development. So far, this is about intellectual property. Motorola Mobility CEO Sanjay Jha revealed in a conference call discussing the Google deal that his company controls a rich patent portfolio of 17,000 issued patents and 7,500 patent applications filed, indicating that Google will use this patent war chest as a powerful leverage against legal pressure from rivals Apple and Microsoft.

Google’s chief legal officer David Drummond said this in the call:

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After a shocking announcement this morning from Google regarding a $12.5 billion acquisition of Motorola Mobility, most are already discussing what this means for the future of Android. However, a report from WSJ claims their sources are reporting Motorola has an “unusually large” 20% reverse termination fee in place that would see Google paying $2.5 billion if the deal falls through.

The report claims this might be proof Motorola is worried the acquisition could be the subject of antitrust regulators who are already investigating Google for its ability to abuse its market lead. However, Google execs noted in a conference call with financial analysts this morning that they aren’t worried about the deal being seen as anti-competitive in nature.

Why would the deal fall through? The report points to potential legal hurdles in Washington, similar to those that allegedly stopped a Groupon acquisition from happening. Google is already the subject of an antitrust probe related to their purchase of ITA software, and continues to be in the middle of intense legal battles with rival smartphone makers.

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The Federal Trade Commission began an anti-trust probe of various Google services six weeks ago after serving the company with a number of “broad subpoenas”. Today, sources familiar with the proceedings report the probe is now extending to Android and Google’s endeavours in the mobile space.

The WSJ explains:

Six weeks after serving Google with broad subpoenas, FTC lawyers, in conjunction with several state attorneys general, have been asking whether Google prevents smartphone manufacturers that use its Android operating system from using competitors’ services, these people said.

They also have inquired whether Google grants preferential placement on its website to its own products, such as Google’s “Places” business listings, its “Shopping results” or Google Finance services above most other results.

This wouldn’t be the first time government has targeted a technology company expanding into areas other than what they’ve been known for, and it certainly wont be the last. Despite that, Google doesn’t seem to be worried… a Google spokesperson had this to say about the probe:

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Update: Samsung has issued the following statement (via TNW) addressing the court’s decision to grant Apple the preliminary injunction:

Samsung is disappointed with the court’s decision and we intend to act immediately to defend our intellectual property rights through the ongoing legal proceedings in Germany and will continue to actively defend these rights throughout the world.

The request for injunction was filed with no notice to Samsung, and the order was issued without any hearing or presentation of evidence from Samsung.

We will take all necessary measures to ensure Samsung’s innovative mobile communications devices are available to customers in Europe and around the world.

This decision by the court in Germany in no way influences other legal proceedings filed with the courts in Europe and elsewhere.

Reports are coming in that Apple has been granted a preliminary injunction for the entire European Union (excluding Netherlands) that will halt distribution of Samsung’s Galaxy Tab 10.1. This comes on the heels of a postponed launch of the device in Australia due to a lawsuit with Apple. If you’ve been in the market for an Android-based tablet, you might have to grab one of those new Vizio tablets or wait for the rumored Kal-El Honeycomb powered “Motorola Kore”.

The decision by the Regional Court of Dusseldorf in Germany to block sales of the device comes after a judge sided with Apple on claims that Galaxy Tab copied key design components related to the iPad 2. While Samsung can appeal the court’s decision sometime in the next month, the Telegraph’s Shane Richmond is quick to point out it would be heard by the same judge. Apple is also said to have a separate lawsuit filed in the Netherlands as well.

Samsung had this to say in a recent statement about their legal disputes with Apple:

“Samsung believes that there is no legal basis for this assertion. We will continue to serve our customers and distributors and the sale of Samsung products will be continued.”

And Apple has made their stance on the situation clear…

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Samsung today issued the following statement announcing its planned Galaxy Tab 10.1 launch event in Australia has been postponed, citing legal spat with Apple (via Gizmodo):

In light of the current legal proceedings by Apple Inc. against Samsung Electronics Australia, Samsung regrets to announce it will be postponing its media launch event, scheduled for 11th August 2011, for the Samsung Galaxy Tab 10.1.

The company will announce a new date for the Galaxy Tab 10.1 media launch event “as soon as practicable”. It’s another PR blow for Samsung Mobile which has thus far confused the press with inconsistent messages about the Australia situation…

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Over the past few weeks, the patent arms race has been accelerating and the latest comes in a Bloomberg story that has old frenemies – Apple, Google and Samsung – locked in a fight for InterDigital’s patent portfolio. Samsung is said to be interested the most in InterDigita’s intellectual property their CEO claims is “stronger” than the 6,000 Nortel patents the Apple-led consortium recently acquired for $4.5 billion. People familiar with the matter tell the publication Samsung has been “approached to make a bid”:

Samsung is looking at the patents along with Apple Inc. (AAPL), Google Inc. (GOOG) and other potential bidders, said the people, who asked not to be identified because the talks are private. InterDigital, which holds patents related to mobile technologies used to transfer information, said last month that it hired bankers as it considers a sale.

InterDigital’s patent portfolio covers technology for high-speed cellphone networks “now used by the world’s biggest handset makers”, including Apple’s iPhone as well as BlackBerry and Android phones. The portfolio includes 8,000 patents in total and is estimated to be worth $5 billion or more. “To hedge the risk, Samsung could go ahead with bidding, although they may have to pay a big premium”, says  Shinyoung Securities Co. analyst Lee Seung Woo…

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In response to media reports that it has halted planned sales of the Galaxy Tab 10.1 in Australia until Apple lawsuit is resolved, Samsung Australia has stepped forward and shed some light on the matter. The company clarified via the official statement published by Ausdroid.net that a court injunction involves a Galaxy Tab 10.1 variant that the company “had no plans of selling” in Australia whatsoever.

They re-iterate plans to launch a version for the Australian market “in the near future”. It is not clear from the statement whether or not said version will hit the market regardless of the outcome of the Apple lawsuit in the country. The company does stress that “this undertaking” will not affect availability of their smartphones and tablets around the world. Here’s Samsung’s statement in its entirety:

Apple Inc. filed a complaint with the Federal Court of Australia involving a Samsung GALAXY Tab 10.1 variant that Samsung Electronics had no plans of selling in Australia. No injunction was issued by the court and the parties in the case reached a mutual agreement which stipulates that the variant in question will not be sold in Australia. A Samsung GALAXY Tab 10.1 for the Australian market will be released in the near future. This undertaking does not affect any other Samsung smartphone or tablet available in the Australian market or other countries. Samsung will continue to actively defend and protect our intellectual property to ensure our continued innovation and growth in the mobile communication business.

CNN has confirmed authenticity of the statement. 9to5Google has contacted Samsung Mobile seeking clarification and will updated the post accordingly when we hear back from them. We suggested that the very fact Samsung has bowed to Apple in Australia could be viewed either as their concession to Apple ahead of a possible settlement or a major setback in their legal spat with the Cupertino, California gadget maker. FOSS Patents’ Florian Mueller concurs and points out that “if Samsung believed that the US version of the Galaxy Tab 10.1 doesn’t infringe any of Apple’s rights, it would have defended itself as a matter of principle”.

Cross-posted on 9to5Mac.com

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Update: Samsung issued a statement and a “workaround”

In a surprising turn of events to anyone following the ongoing Apple vs. Samsung spat, Bloomberg reported this morning that Samsung has agreed to temporarily cease sales of the Galaxy Tab 10.1 tablet until their legal dispute with Apple is settled or they win court approval:

Apple Inc. escalated a patent dispute against Samsung Electronics Co. and won an agreement that the South Korean company won’t sell the newest version of its tablet computer in Australia until a lawsuit is resolved. Samsung, based in Suwon, South Korea, agreed to stop advertising the Galaxy Tab 10.1 in Australia and not to sell the device until it wins court approval or the lawsuit is resolved.

It’s interesting because Samsung was advertising the Galaxy Tab 10.1 launch in the country since July 20. Still, carriers Vodafone and Optus both hinted at plans to offer the device to their Australian customers “soon”. Samsung’s decision came as a lawyer for Apple sought an injunction before Federal Court Justice Annabelle Bennett in Sydney, claiming Samsung’s tablet infringes ten Apple patents. With that in mind, Samsung’s clearly on the defensive here. Apple also wants wants to “stop Samsung from selling the tablet in other countries” and Samsung’s conceding to Apple may have set an important precedence for other countries. Of course…

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Anticipating Android backers will face legal hurdles as Apple now has the upper hand in its case against HTC (here and here), Google has stepped up and bought more than a thousand IBM patents for an undisclosed sum. The news was first reported by the blog SEO by the Sea and picked up by The Wall Street Journal. The search company might use IBM inventions as a leverage against pending lawsuits that indirectly involve its Android software.

Google failed to outbid the Apple-led consortium which paid $4.5 billion for Nortel’s treasure chest of more than 6,000 patents covering wireless technologies, among them crucial inventions related to fourth-generation cellular networks. The new patent deal is in line with Google’s focus on snapping up patent portfolios left and right in creating a “disincentive for others to sue Google”, as noted on their official blog back in April. The 1,030 granted patents Google bought from IBM cover varied technologies, including…

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Google’s executive chairman Eric Schmidt has gone on the offensive and bashed Apple over patent infringement claims the company had filed against high-profile Android backers such HTC and Samsung. In what could be viewed as an effort to sway the public perception, he launched a nasty attack speaking at Google’s Mobile Revolution conference in Tokyo. To Schmidt, Apple’s taking rivals to court sends a strong signal, that of the lack of innovation and jealousy:

The big news in the past year has been the explosion of Google Android handsets and this means our competitors are responding. Because they are not responding with innovation, they’re responding with lawsuits. We have not done anything wrong and these lawsuits are just inspired by our success.

Schmidt re-iterated sales of 135 million Android phones since 2008 and highlighted more than 550,000 daily activations that exclude tablets and non-smartphone devices, which is up from 400,000 a day in May. He said Google will support HTC’s legal battle against Apple’s copyright accusations, but wouldn’t elaborate.

Whether or not Apple’s legal pressure stems from jealousy is up for debate, of course. Cynics might argue Schmidt’s comment draws from nervousness on Google’s part because Android backers are increasingly discovering hidden costs as Microsoft and Apple emerge as holders of patents crucial to Google’s mobile operating system. Apple’s victory over HTC may set what RBC Capital Markets analyst Mike Abramsky painted as a high royalty precedent for Android devices that could further shrink the already slim margins on Android phones.

As if that wasn’t enough, Microsoft is already taking money from five Android vendors for patent protection, including HTC which is said to pay five bucks each time it ships an Android handset and General Dynamics Itronix. Microsoft is also understood to have targeted Samsung, seeking royalties in excess of hundreds of millions of dollars annually. The Cupertino, California-headquartered gadget giant quoted Steve Jobs in a statement announcing the HTC lawsuit March last year:

Then Google CEO Eric Schmidt shares the stage with Steve Jobs at the January 2007 iPhone unveiling. The times of happiness would abruptly come to an end amid Android whispers, culminating with Apple announcing Schmidt’s resignation from its board August 3, 2009.

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Shares of the Taiwanese Android phone maker HTC fell 6.5 percent this morning following the ruling by the International Trade Commission (ITC) that the company violated two patents held by Apple. The company’s shares have been pretty much free-falling throughout last week. The agency’s commissioners still have to support the ruling, but investors are already panicking over fears that the ruling will favor the California-based gadget maker. This, in turn, would open doors to ITC’s ban on imports of HTC’s phones into the United States. In response to the crisis, HTC announced a share buy back program worth up to $760 million in an attempt to stabilize its share price and restore investor confidence, reports Financial Times:

The attempt to prop up HTC’s share price appeared to have little effect as the stock fell below HTC’s minimum purchase price of T$900 to close down 3.9 per cent at T$871. The sell-off highlights investor fears that the legal battle could have wider implications for the competitive balance between Apple and Google Android-based phonemakers like HTC, Samsung and Motorola.

HTC is thought to have recently acquired S3 Graphics for $300 million in a bid to secure a stronger ground in its legal dealings with Apple, which filed its patent infringement complaint against the Taiwanese company back in March 2010. Apple accused HTC of violating up to twenty patents related to the iPhone’s hardware, software and its user interface. ITC recently ruled in favor of S3 Graphics, deciding the iPhone maker infringed on two patents held by S3 Graphics. They also acquired a portfolio of 82 patents from US-based ADC Communications for $75 million and signed an Android protection pact with Microsoft. HTC is expected to use all of this in the hope of relieving some of the pressure from Apple’s legal sharks. If ITC decides to ban import of HTC phones into the US and the company does not reach a timely settlement with Apple, its stock price could free-fall further.

Cross-posted on 9to5Mac.com

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In case you didn’t notice, tech headlines recently are all about patents. Be it the ongoing case of patent troll Lodsys which is now suing The New York Times Company and five other firms that previously sued Lodsys (bringing the number of defendants to 33) or Microsoft going after Samsung and signing Android patent protection pacts with five more vendors or the Apple led-consortium winning a crucial $4.5 billion bid for Nortel’s patent trove – you name it, the blogosphere is all over it.

HTC is now joining the craze with the news that they will snap up graphics vendor S3 Graphics from Via Technologies. The transaction valued at $300 million is about – you guessed right – patents. A total of 235 patents and pending applications will change hands once regulators approve the deal (VIA’s and HTC’s boards of directors already have). The patent agreement should help HTC protect themselves from future patent litigation from rivals. There’s also this:

On July 1, a U.S. International Trade Commission judge ruled that Apple infringed on some of the claims contained in two S3 Graphics patents. Judge E. James Gildea found that Apple infringed on U.S. Patent No. 6,658,146 directed to systems and methods for compressing images and U.S. Patent No. 6,683,978 directed to image data formats, both of which belong to S3 Graphics.

HTC has been trying to escape Apple’s lawsuits since March of last year, when Apple took the Taiwanese handset maker to court over an alleged breach of twenty patents pertaining to the iPhone hardware, software and user interface. With this acquisition, HTC may be out of trouble as both firms now have what the others want – intellectual property – even with HTC bringing a lot less to the negotiating table…

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It’s interesting how Microsoft is becoming an intellectual property vendor these days. This is all thanks to Google’s Linux-based Android operating system which incorporate Microsoft’s many patents, allowing the Redmond firm to seek royalties from handset vendors. Microsoft first forced HTC to pony up five bucks in royalties per each handset sold. The revelation has prompted pundits to note that the HTC deal earns Microsoft more money then licensing fees collected from Windows Phone partners.

Microsoft has signed a similar pact with General Dynamics Itronix and their licensing division took cash from component maker Wistron Corp., in addition to Android backers Veloicty Micro and Onkyo Corp. And now, we learn that Microsoft’s legal rottweilers are after Samsung, the leading Android handset maker, reports Reuters based on local media. Note that Microsoft already has licensing agreements in place with Samsung and LG.

Microsoft Corp has demanded that Samsung Electronics Co Ltd pay $15 for each smartphone handset it makes based on Google Inc’s Android operating system as the software giant has a wide range of patents used in the mobile platform, local media reported on Wednesday. Samsung would likely seek to lower the payment to about $10 in exchange for a deeper alliance with Microsoft for the U.S. company’s Windows platform, the Maeil Business Newspaper quoted unnamed industry officials as saying.

Let’s put it this way: Microsoft is set to make $30 million in Galaxy S 2 royalties alone based on sales of three million Galaxy S II smartphones. That’s a run-rate of twenty million handsets a year, meaning the Samsung deal could be potentially worth a cool $200 million in annual licensing fees on the Galaxy S II smartphone alone. And what happens if an Android vendor does not sign with Microsoft for patent protection?

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Samsung has issued a statement regarding claims of high-level talks with Apple concerning an ongoing legal dispute involving flagship mobile devices from both firms. A company spokesperson told V3.co.uk yesterday:

We are unaware of any meetings or discussions between the two sides over this matter.

The comment follows a report by Reuters which asserted that US district judge Lucy Koh told both parties during a Friday hearing to get their act together and come to an amicable solution. Apparently, Apple’s legal counsel Harold McElhinny told judge that Apple and Samsung executives are involved in talks. It’s obvious one of the parties is not telling the truth. This cat-and-mouse game is beginning to point at a possible settlement because neither party would benefit from dragging each other through the mud in a multi-year lawsuit. Plus, Samsung is Apple’s key supplier after all…

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Apple is applying more oomph to copycat claims against its key supplier Samsung. Just days after it wrote in court documents that Samsung was “harassing us”, Apple yesterday amended the filing with more intellectual property rights against more products – even re-phrasing accusations more strongly. The legal maneuver comes on the eve of today’s court hearing where the judge will decide about granting each party access to the other’s unreleased products. FOSS Patents spotted the updated complaint:

The original complaint specifically accused the following products of infringement: “the Samsung Captivate, Continuum, Vibrant, Galaxy S 4G, Epic 4G, Indulge, Mesmerize, Showcase, Fascinate, Nexus S, Gem, Transform, Intercept, and Acclaim smart phones and the Samsung Galaxy Tab tablet.”

The amended complaint accuses all of the above plus the Droid Charge, Exhibit 4G, Galaxy Ace, Galaxy Prevail, Galaxy S (i9000), Gravity, Infuse 4G, Nexus S 4G, Replenish, Sidekick, Galaxy Tab 10.1, and Galaxy S II (aka Galaxy S 2). It also specifies the accusation against “Showcase” products, naming the Showcase i500 and Showcase Galaxy S.

Per rephrased wording, Samsung “has been even bolder” than other companies by putting out “products that blatantly imitate the appearance of Apple’s products to capitalize on Apple’s success”. The company claims that the F700 released in 2007 was the first Samsung phone to “copy the clean flat clear surface of the Apple iPhone Trade Dress and the Apple iPhone/iPhone 3G/iPhone 4 Trade Dress”. Apple also points out that its products and brand have been featured in credible newspapers and magazines and even points out the #1 position it took in the BrandZ index. In Apple’s words, this is why iPhone is an iconic product:

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Strategy Analytics ranked Samsung the #1 Android tablet maker and the world’s #2 tablet company behind Apple in Q1 2011. It took them a month to sell a millionth Galaxy S II smartphone in Korea  and brag about it  on their Flickr account with the above image.

Samsung is content on releasing more Android tablets despite that pending legal spat with Apple, which is accusing them of stealing the iPad’s and iPhone’s design, software features and hardware engineering with the Galaxy-branded tablets and smartphones. The Wall Street Journal quoted this morning Samsung’s J.K. Shin who underscored his company’s determinacy to release more Honeycomb tablets this year as they “continue to work with Android on future tablets”. Their senior vice president of sales and marketing Younghee Lee added:

Android is the fastest-growing platform and the market direction is headed toward Android so we’re riding the wave. When there is a market need for our own software, we will consider it but that’s not our plan at the moment.

Samsung also says it’ll continue offering tablet PCs in multiple screen sizes as a way of distinguishing themselves from Apple. Asked to comment on that pending lawsuit with Apple, Shin responded:

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A report from Citi analyst Walter Pritchard made headlines this morning with claims that HTC agreed to paying five bucks per every Android handset sold. The basis for this is Microsoft’s patent settlement with the Taiwanese handset maker over intellectual property infringement, the analyst has found out. The fact that HTC makes Windows Phones obviously didn’t help dodge that patent hit.

Microsoft’s boss Steve Ballmer argued last October that Android wasn’t free just because it’s open-sourced. Some watchers are calling the Android platform a patent bomb waiting to explode. HTC is also being sued by Apple over alleged breach of iPhone patents and Oracle is suing Google over use of Java in Android. Pritchard warns other Android vendors can expect to pay royalties to Microsoft between $7.50 to $12.50 per device, which is troubling and here’s why.

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You may have heard about the latest scandal in the world of Apple involving an unknown company called Lodsys which came out of nowhere, applying legal pressure to the makers of popular iPhone apps that use in-app billing in an effort to extort royalties. Patent troll Lodsys (even though they beg to differ) claims Apple, Microsoft and Google signed licensing agreements with them related to in-app purchasing that don’t, however, include third-party apps. Acting on the Electronic Frontier Foundation’s public letter calling out Apple for not stepping up for its developers, the iPhone maker publicly ensured developers that they are covered under its license.

Figuring out the extortionate strategy may have not worked out as expected, Lodsys is now apparently targeting Android developers with patent infringement claims. MacRumors spotted a Google Groups discussion thread which reveals that at least one Android developer may have found itself in Lodsys’ cross-hair. Here’s how that developer described his legal woes with the patent troll firm:

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