Apple Wins Over Jury in Samsung Patent Dispute, Awarded $1.05 Billion in Damages (Live Blog)

Updates to include comments from Apple, Samsung, a legal expert and analyst. A copy of the final, amended verdict is here.

The nine-member jury sided almost entirely with Apple Inc. in its patent dispute case with Samsung Electronics Co., awarding Apple nearly $1.05 billion in a “sweeping victory” over claims that the Korean electronics maker copied the designs of its iPhone smartphone and iPad tablet.

The verdict comes after less than three full days of deliberation in a high-stakes trial overseen by U.S. District Court Judge Lucy Koh in San Jose federal court.

“The jury’s $1 billion verdict is a sweeping victory for Apple. It solidifies Apple’s dominance of the market for smart phones and tablets,” said Steve Mitby, a partner with Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C. in Houston. “If the court issues an injunction based on the jury’s verdict, this would ban Apple’s key competitor from the market for months, if not years.”

Apple sued Samsung in April 2011, alleging it had “copied” the designs of the iPhone and iPad. Samsung countersued Apple in June 2011, saying the Cupetino, California-company had infringed on Samsung patents around wireless communications and camera phones.

The jury, made up of seven men and two women, today found no such infringement on Apple’s part and said Samsung was entitled to “zero” in damages.

Apple was seeking $2.5 billion in damages, and it called on the jury Aug. 21 to impose a heavy penalty on Samsung. “They will not change their way of operating if you slap them on the wrist,” Apple attorney Howard McElhinny said in his closing argument.

It wasn’t a clean sweep for Apple. The jury didn’t agree to some of Apple’s claims around the iPad and Samsung’s Galaxy Tab 10.1 tablet. Still, the overall impression after a read through of the 20-page verdict form, which contains 33 multi-part questions, showed the jury bought into Apple’s copying claims, particularly around the iPhone.

Here’s Apple’s statement on today’s verdict:

We are grateful to the jury for their service and for investing the time to listen to our story and we were thrilled to be able to finally tell it. The mountain of evidence presented during the trial showed that Samsung’s copying went far deeper than even we knew. The lawsuits between Apple and Samsung were about much more than patents or money. They were about values.  At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy.  We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right.

This is what Samsung had to say:

Today’s verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices. It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies. Consumers have the right to choices, and they know what they are buying when they purchase Samsung products. This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple’s claims. Samsung will continue to innovate and offer choices for the consumer.

The damages total was at first $1.051 billion, but that became a  tentative number after Judge Koh asked the jury to review two “inconsistencies” in the award, totaling about $2.4 million. After deliberating, the jury came back and gave a new total of $1,049, 393,540 — or nearly $1.05 billion.

Investors reacted favorably to the news, sending Apple’s shares up $11.73, or 1.7 percent, in extended trading to $674.95. Google, whose Android mobile operating system software powers many Samsung devices, fell $5.63, or less than 1 percent, to $673.

“This verdict threatens the future of Google’s Android products.  Based on this verdict, Apple will likely sue other competitors that use the Android system,” Mitby said. “The result will likely be an increase in costs to Android users because of licensing fees to Apple. This will drive many Android consumers over to Apple.  Next to Samsung, the biggest loser today is Google.”

Apple and Samsung will return to Judge Koh’s courtroom next month to argue over Apple’s request for an injunction to stop the infringing products from being sold. Mitby said it’s likely Samsung will appeal to the Federal Circuit, the Washington, D.C.-based appeals court that hears patent-related appeals. “The Federal Circuit has a history of scaling back big damages awards, which may spell trouble for Apple’s $1 billion in past damages,” he said. “However, on the core issues of infringement and validity, the Federal Circuit is less likely to reverse.  So even if Samsung is able to reduce the monetary award, the jury’s decision spells trouble for the future of Samsung’s product line – which is an even bigger financial issue for Samsung.”

“The iPhone clearly changed everything and Apple needs to be recognized for it,” said Al Hilwa, an analyst with IDC in Seattle. “At the same time, a good idea has to be leveraged in flexible ways and by the broader society and Android has to be recognized for bringing these innovations to the masses. Patent laws have to be cleaned up because ultimately the consumer will end up on the losing end.”

Here’s a play-by-play of what happened in the courtroom today after the court announced that the jury had reached its verdict shortly after 2:30 p.m. California time. Refresh this page to see updates (and corrections as needed).

• 3:37 p.m. The jury has entered the courtroom. Judge Koh says that if there are any questions that require further clarification, she will ask the jury to go back to the jury room to clarify. “I don’t know if any of this will be necessary.”
• Juror No. 1, the foreman, says that the jury has reached a verdict. Judge Koh is reading through it now to see if there are any omissions.
• The packed courtroom is very quiet as the clerk begins to read it.
• Question 1: For each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC), Samsung Electronics America (SEA), and/or Samsung Telecommunications America (STA) has infringed Claim 19 of the ’381 Patent?
• The answer for all devices is yes.
• Question 2: For each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC), Samsung Electronics America (SEA), and/or Samsung Telecommunications America (STA) has infringed Claim 8 of the ’915 Patent?
• The answer for most devices is yes, except for the Intercept and Replenish smartphone models.
• Question 3:  For each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC), Samsung Electronics America (SEA), and/or Samsung Telecommunications America (STA) has infringed Claim 50 of the ’163 Patent?
• The answer is yes for almost all the smartphone models, though there are few exceptions. It’s yes for Galaxy Tab.
• Question 4: For each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC) took action that it knew or should have known would induce STA or SEA to infringe the ’381, ’915, or ’163 Patents?
• For 381 patent, yes for all devices.
• For 915 patent, the answer is yes but all but one devices listed.
• For 163 patent, the answer is yes for most except for about eight devices.
• Question 5: For each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC) and/or Samsung Telecommunications America (STA) has infringed the D’677 Patent?
• The answer is yes for all but one of the devices. The no is Galaxy Ace.
• Question 6: For each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC) and/or Samsung Telecommunications America (STA) has infringed the D’087 Patent?
• The answer is yes for about half, with the no’s various models of the Galaxy.
• Question 7: For each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC) and/or Samsung Telecommunications America (STA) has infringed the D’305 Patent?
• The answer is yes for all devices listed in the chart (again, see the verdict form for all the particulars).
• Question 8: For each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC), Samsung Electronics America (SEA), and/or Samsung Telecommunications America (STA) has infringed the D’889 Patent?
• The answer is no for all the Galaxy Tab’s listed.
• Question 9:  If you found that Samsung Electronics America (SEA) or Samsung Telecommunications America (STA) infringed in any of Questions 1 through 8, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC) took action that it knew or should have known would induce SEA or STA to infringe the D’677, D’087, D’305, and/or D’889 Patents?
• The answer is yes for all devices re: Patent 677.
• For the 087 patent, mixed yes and no’s.
• For the 305 patent, the answer is yes for most devices.
• For the 889 patents, the answer is no as it relates to the Galaxy Tab 10.1 tablets.
• Question 10: If you answered “Yes” to any of Questions 1 through 9, and thus found that any Samsung entity has infringed any Apple patent(s), has Apple proven by clear and convincing evidence that the Samsung entity’s infringement was willful?
• Yes on all patents except 087 and 889.
• Question 11:  Has Samsung proven by clear and convincing evidence that Apple’s asserted utility and/or design patent claims are invalid?
• The answer is no to all (Apple in the clear around Samsung’s patents.)
• Question 12: Has Samsung proven by a preponderance of the evidence that Apple’s registered iPhone trade dress ’983 is not protectable? No
• Question 13: Has Apple proven by a preponderance of the evidence that Apple’s unregistered trade dresses are protectable? For unregistered iPhone 3G Trade Dress, yes. But it’s a no for unregistered combination iPhone trade dress and unregistered iPad/iPad 2 Trade Dress.
• Question 14: Has Apple proven by a preponderance of the evidence that Apple’s trade dresses are famous? First two questions are a yes, last two no.
• Question 15: Have you found the registered iPhone trade dress protectable and famous, for each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC) and/or Samsung Telecommunications America (STA) has diluted the registered iPhone trade dress? Yes for the Galaxy models, but no to several of the other models listed.
• Question 16: If you found the unregistered iPhone 3G trade dress protectable and famous, for each of the following products, has Apple proven by a preponderance of the evidence that Samsung Electronics Co. (SEC) and/or Samsung Telecommunications America (STA) has diluted the unregistered iPhone 3G trade dress? Some yes, some no.
• Question 17: Skipping
• Question 18: Skipping
• Question 19: If you answered “Yes” to any of Questions 15 through 18, and thus found that any Samsung entity has diluted any Apple trade dress(es), has Apple proven by a preponderance of the evidence that the Samsung entity’s dilution was willful? Yes for the first two, no to the second.
• Question 22: What is the total dollar amount that Apple is entitled to receive from Samsung on the claims on which you have ruled in favor of Apple? $1.05 billion. (Note: On initial reading, this sounded like $1.5 billion, so you may see that reported. It’s actually $1.051 billion and it was confusing as the clerk read out the amount.)
• Question 23:  For the total dollar amount in your answer to Question 22, please provide the dollar breakdown by product. Note: The jury did award damages on a model-by-model basis of infringing Samsung phones and tablets. However, the numbers were read fairly quickly for the 28 devices listed. Will try to post the actual chart from the verdict jury once it’s available.
• Question 24: For each of the following products, has Samsung proven by a preponderance of the evidence that Apple has infringed the indicated Samsung utility patent claims? No across the board.
• Question 25: If in response to Question 24 you found that Apple has infringed any Samsung patent(s), has Samsung proven by clear and convincing evidence that Apple’s infringement was willful?  Not applicable.
• Question 26: Has Apple proven by clear and convincing evidence that Samsung’s asserted utility patent claims are invalid? No.
• Questions 27: What is the total dollar amount that Samsung is entitled to receive from Apple for Samsung’s utility patent infringement claims on the ’516 and ’941 patents? Zero.
• Question 28: What is the total dollar amount that Samsung is entitled to receive from Apple for Samsung’s utility patent infringement claims on the ’711, ’893, and ’460 patents? Zero.
• Questions 30. Has Apple proven by a preponderance of the evidence that Samsung breached its contractual obligations by failing to timely disclose its intellectual property rights (“IPR”) during the creation of the UMTS standard or by failing to license its “declared essential” patents on fair, reasonable, and non-discriminatory (“FRAND”) terms? No. A victory for Samsung.
• Question 31: Has Apple proven by a preponderance of the evidence that Samsung has violated Section 2 of the Sherman Antitrust Act by monopolizing one or more technology markets related to the UMTS standard? No. Another victory for Samsung.
• Question 32: Not applicable. Zero.
• Question 33: Has Apple proven by a preponderance of the evidence that Samsung is barred by patent exhaustion from enforcing the following Samsung patents against Apple? Yes for Samsung Patent 516 and yes for Patent 941. A victory for Apple.
• 4:15: Court is giving a 15-minute break for Apple and Samsung to review the verdict. The jury has left the room for now.
• 4:52: The Judge has returned and said there are few discrepancies in the verdict award. The jury may have incorrectly awarded damages on two items. The first has to do with the fact that they found no direct infringement of the 889 patent for the Galaxy Tab 10.1 4G LTE but awarded $219,694 in damages. The other has to do with a question about the Galaxy Intercept and infringement of two Apple patents and trade dress and an award of $2.2 million in damages. She’s asked them to go back and look at jury instruction No. 53 to see if they had calculated that correctly.
• 4:59: Recess while the jury leaves to go answer those two questions. There’s a lot of laughter when the Judge asks if the jury would prefer to come back and finish on Monday. They say no, as does Apple and Samsung.
• 5:49: Judge Koh has returned to the courtroom and says the jury has completed its verdict (again, answering the two “inconsistencies” discussed above.) Waiting for them to return to the courtroom.
• 5:53: Jury has returned with its verdict. The clerk is reading the two news.
• RE: Question 4: Intercept, as it relates to violating 915 Patent, the answer is now a no.
• That changes the answer to Question No. 22: The total amount is now $1,049, 393,540. We’ll call it $1.049 billion.
• RE: Question No. 23: The award for damages for the Galaxy Tab 10.1 4G LTE is now zero. Intercept is zero is well (again, this will only make sense when you see the verdict form and see the complete breakdown, model-by-model, of damages).
• 6:00: The jury is excused. Judge Koh is now asking Apple and Samsung about injunctions (that is, preventing the infringing Samsung phones from being sold here in the U.S.). Arguments about time frame and how much Samsung says it will need to respond to Apple’s demands. Apple says Samsung should respond in 14 days after it files. Samsung says it wants 30 days to respond once Apple files. Judge Koh says she has a window at the end of September before another trial starts Oct. 5.
• Apple says it has proven willful infringement so it has enough evidence to prove irreparable harm and wants the injunctions heard sooner rather than later (as you expect).
• She’s now asking Apple to file its request on Aug. 29 (in five days). Samsung to respond by Sept. 12, with Apple to reply by Aug. 14.