updated 01:06 am EDT, Wed August 6, 2014
Cases dropped without settlement in more than eight countries
In a joint email sent to the press, Apple and Samsung have agreed to drop all patent lawsuits against each other in all countries except the US, without any settlement, cross-license agreement or any other consideration. The US court system will be the sole arbiter of the numerous patent disputes the two companies have brought against each other, and comes on the heels of a series of moves to de-escalate the standoffs between them. Samsung and Apple agreed to drop appeals of an ITC case in June.
The agreement could benefit Apple, as it has been the victor in nearly all the cases brought to court outside of South Korea, the home country of Samsung. While Apple lost one important ITC case in the US, the unusually inconsistent ITC verdict was later overturned by the Obama administration due to the chilling effect the ruling would have had on the tech industry as a whole.
The statement simply says that "Apple and Samsung agreed on Tuesday to drop their patent lawsuits outside the US. But their patent war isn't over yet. The two technology giants will continue to battle on within the US courts system." The two companies have been moving steadily towards settling significant portions of their disagreements. Thus far, Samsung has been unable to prove to any court outside its home country that Apple ever violated any of its valid patents, while Apple has won several huge judgements against Samsung, though the iPhone maker has yet to see any money due to the cases being tied up in appeals.
Apple's victories have occasionally resulted in some product bans, such as in Australia, but most of the bans were eventually overturned, notes ZDNet. Samsung in turn has led, along with Google, an effort to invalidate or weaken Apple's patents as a method of avoiding infringement, but this tactic has met with very limited success. The problem catching up with both companies is the snail-like pace of court appeals and patent review processes, which render most of the concepts, designs and software the two companies argue over obsolete long before the cases are settled.
Both companies appear to have realized that the court system will not provide effective relief to their respective complaints, particularly in the area of sales injunctions - but despite numerous attempts, the two companies do not seem to be able to work out a full settlement. Still, both have undertaken efforts to wind down the global conflict, with Apple agreeing to drop its effort to secure product bans on some (long out-of-production) infringing Samsung devices.
Judge Lucy Koh's repeated refusal to issue sales bans on the products found guilty of using Apple technology was the only aspect of the first federal court trial between the two companies that Apple wanted to appeal. Samsung, which owes Apple nearly $1 billion in damages from that trial, is continuing its appeal of the jury's findings in total. The Korean company also lost the second federal trial (which covered different patents), but Apple was awarded far less money ($120 million) in that trial. An appeal is underway.
Apple and Samsung also agreed to end the appeal of an ITC case in June, with Apple dropping its appeal of a finding of non-infringment by Samsung on a patent that was later found invalid. Samsung dropped its appeal against the product bans imposed by the ITC in the case, essentially admitting guilt as it did in the damages retrial of the first federal trial.
The new agreement to drop cases outside the US is seen as a legal win for Apple, particularly in Samsung's agreement to drop cases in South Korea, where the courts are much more pliant towards one of the country's largest employers. The concession could indicate that it is Apple's economic power, rather than legal abilities, that are wielding the most influence in the patent wars.
Samsung has suffered significant losses in areas where Apple was formerly its largest customer. Its stock has dropped considerably, as it has been unable to find new demand to fill the void where Apple has distanced itself from its rival and former main supplier. The two companies still work together in a number of ways, but Apple has made a conscious effort to reduce its dependency on Samsung in every area possible, ranging from processor manufacture as well as display screens and other components.
Together with other factors, Samsung has been forced to post record-setting losses in some of its divisions, which has angered shareholders. The continuing pressure from Apple and other rivals attacking, respectively, Samsung's premium and low-end smartphone bases is limiting the company's growth options. Whether the movement signals the beginning of progress towards a full settlement remains to be seen, but the agreement will likely be seen by investors in both companies as progress that should benefit all sides.