'Apple verdict made on technically, morally wrong bases'

Rutgers U.S. patent expert advises Judge Koh ahead of Dec. 6 ruling Michael A. Carrier American Antitrust Institute (AAI) advisor By Kim Yoo-chul, Cho Mu-hyun A U.S. patent expert has argued that the jury made two mistakes in awarding Apple $1.05 billion in its verdict against Samsung Electronics.  “It seemed that the jury wanted to send a message to Samsung. But it’s not supposed to do that,” said Michael A. Carrier, a member of the Board Advisors of the American Antitrust Institute (AAI) in a recent interview. ``(Jury foreman Velvin) Hogan apparently explained to the jury, who deferred to him because he had patents, that the issue of prior art depended on interchangeability,” Carrier said. “But it actually doesn’t ― the law asks if the invention was new and not preceded by sources such as earlier patents.” Hogan was fired from Seagate, a company that formed a strategic partnership with Samsung.  His failure to reveal it and other circumstances that may make him biased are now emerging to be a bone of contention that some experts as well as Samsung cites as to why U.S. Federal Judge Lucy Koh should reconsider the verdict. AAI is a Washington-based non-profit advocacy organization. It advocates more aggressive antitrust enforcement by the federal government and is funded through contributions from a wide variety of law firms, economics consulting firms, trade associations with substantial support from Cypress grants approved by courts in antitrust cases. Accordingly, Carrier advised Koh, the presiding judge in the biggest technology dispute in history, to very carefully evaluate the jury’s verdict and the statements of the foreman to decide if the decision should be allowed to stand. ``As this is an extremely important case that has received a lot of attention, Judge Koh should look into the case very carefully,’’ said the professor from Rutgers University School of Law-Camden in the United States. Koh earlier confirmed she will re-examine Hogan’s alleged misconduct during the California trial before the Dec. 6 hearing. That day, the presiding judge will hear Apple’s motion for an injunction against eight Samsung mobile devices, as well as the Korean electronics giant’s expected motion to have the jury’s verdict set aside. Referring to Hogan’s misconduct, Samsung is seeking a new trial. Carrier is also the chair of the executive committee of the Antitrust and Economic Regulation section of the Association of American Law Schools (AALS). Before entering academia, he clerked for John D. Butzner, Jr. on the U.S. Court of Appeals for the Fourth Circuit and litigated antitrust, intellectual property in Washington, D.C. Although one of Apple’s key patents ― bounceback ― was recently nullified by the U.S. Patent and Trademark Office (USPTO), Carrier said the decision by the USPTO is no surprise. Bounceback is one of the patents Samsung was found to have infringed on and any action by the USPTO is expected to have big consequences, according to market analysts. ``This is a confusing situation. The jury can conclude that a patent is invalid even if the USPTO reaches a different conclusion.’’ The law professor sided with Apple by insisting that design can play an important role in making consumers more interested in products. Apple previously offered a deal where Samsung would pay $1 per device in return for using the Korean firm’s wireless patents, which Samsung said was ``unacceptable.’’ ``Both design and technology are necessary for innovation. Without the technology, there are no products as well,’’ he said. Apple’s stock has recently been declining after its CEO Tim Cook embarked on a sweeping management overhaul at the Cupertino-based consumer electronics giant. Cook, who succeeded co-founder Steve Jobs last year, is revamping the firm’s leadership as Apple’s share price sags and rivalry accelerates with competitors including Google, Microsoft and Amazon. Carrier understands it’s difficult to follow Jobs in terms of perspective in new leadership. ``But Cook may not wish to continue the smartphone patent wars if Apple is blocked from certain markets.’’ Samsung is too powerful Carrier was pessimistic that Samsung Electronics and Apple will reach a settlement in the foreseeable future, though Taiwan’s HTC, another Google Android ally, struck a licensing agreement with the iPhone maker. ``That’s because Samsung is too powerful a competitor to settle right now,’’ he said. ``Both companies probably feel that they have too much at stake now to settle and aren’t willing to give up much until more courts weigh in on these issues.’’ Carrier continued; ``Apple settled with HTC because Apple has a strong market position and HTC has a weak position. Apple probably got excellent settlement terms. My guess is that Apple would not be able to get terms like that right now with Samsung or even Motorola Mobility.’’ As pre-conditions for Samsung and Apple before entering a comprehensive agreement period over patents he said, ``The companies must feel that they have something to lose or have already lost in court before they feel compelled to sit at the table and make a concession. We are not at that point yet.’’ Neither Samsung nor Apple have seen clear victories in the courts. Courts in Europe sided with Samsung, while a Japanese court gave mixed rulings. In August, Apple won in California. But that’s controversial, according to patent experts. To match analytic views about the fight, Carrier said the patent problem is a ``growing pain’’ for Samsung, as well as other technology companies. ``There are so many patents in a single handset that there can always be an argument of copying. That’s why there is so much litigation,’’ the professor stressed. According to his observation, Apple wants to have a higher market share in relation to Android competitors. ``Apple would argue that it introduced many of the features that led to the success of the smartphone market. Samsung would argue that Apple is not entitled to block others from improving on its features. It does seem that innovation takes place in a cumulative manner in this industry, in which one generation of phones builds on its predecessors,’’ Carrier said in relation to claims that Apple is an innovation killer. In a related note, U.S. Magistrate Judge Paul Grewal ordered Apple to disclose the licensing terms of its settlement with HTC to Samsung. He ordered Apple to produce a copy of the agreement under an ``Attorneys-Eyes-Only’’ designation, meaning it won’t be publicly available. Samsung argued the terms of the licensing agreement between Apple and HTC are relevant to Apple’s request for an order blocking U.S. sales of Samsung smartphones. Lawyers for Apple said HTC was willing to provide a copy of the accord with the financial terms redacted, according to legal sources. Despite the story updates, Carrier retained his ``no imminent cross-licensing agreement between Samsung and Apple’’ stance. Rather, the scholar said that it’s a shame that so many millions of dollars are being spent on litigation rather than innovation. ``With supposedly 250,000 patents in a smartphone, it’s always possible to claim that someone is infringing one of the patents and we don’t often know if the patent is valid until a court decides the issue and much money is spent in the meantime.’’ Park Han-yong, a spokesman for Samsung, declined to comment on whether the company has any updates on its fight with Apple. yckim@koreatimes.co.kr, impale@koreatimes.co.