Where Will This Apple Lawsuit Go Now?

I don't know if you noticed, but there's an epic legal battle under way.

Apple (Nasdaq: AAPL  ) is facing off against Samsung in the Northern judicial district of California in front of a full jury. It's but a small skirmish in a much larger war fought around the globe, but an important one nonetheless. The outcome here will have a huge influence over the mobile wars. These are the two biggest and most successful smartphone makers in the world, each accusing the other of offenses so grave that iPhones and Galaxy handsets should be illegal to sell in America -- or anywhere else.

The trial promises to be long and packed with entertaining fireworks. So far, Samsung's lawyers have managed to offend judge Lucy Koh but deflect the threat of crippling sanctions that Apple wanted the honorable gavel-wielder to impose.

Fun and games
It's to the point where Apple-friendly observers muse that Samsung might actually want a mistrial just to drag the case out as long as possible. Samsung lovers, on the other hand, say the South Korean company just wants crucial evidence included in the case, lest we'd suffer a miscarriage of justice.

Judge Koh seems already frustrated at this very early point, chiding the parties get down to business. "I will not let any theatrics or sideshows distract us from what we are here to do, which is to fairly hear this case," she said on Friday.

Moving forward, Samsung will not be allowed to show the jury how Apple's original iPhone design just might be inspired by existing handsets from Sony (NYSE: SNE  ) or perhaps the less palpable design essence of the Japanese electronics rival. On the other hand, Apple can't claim a quick and easy total victory from Samsung's procedural gaffes. The case is just too central to the future of our smartphone future to allow that kind of technical knockout.

Mountains of paperwork
So what's left to consider? Well, more than 1,000 filings of evidence, for starters. Even so, both sides are itching to introduce even more evidence. It's hard to say exactly what will come of this paper blizzard without a Palantir at my side.

However, it's pretty clear what's at stake here. If Apple wins on every count, Samsung will have to change many, many design details before releasing another Android handset or tablet. Apple basically lays claim to rectangular phones covered in touchscreens, all wrapped in rounded corners and minimalist design. Samsung's Galaxy line does indeed meet that description, but it's up to the jury to decide whether that's a deal-breaking lack of innovation or just a sensible and obvious design.

On the other hand, Samsung owns patents on much of the technology that makes a phone out of the iPhone, and Apple never signed a license to use it. This counterattack is less about taking a rival off the market and more about fair payment for industry-standard inventions. But both sides actually come out looking somewhat ridiculous in this over-the-top battle of barristers.

And it'll be a huge mess of "he said, she said" before we get the final verdict. Again, I wouldn't blame the judge for throwing up her hands in disgust and declaring that all these contrasting claims just cancel each other out. That's pretty much what happened when Oracle (Nasdaq: ORCL  ) challenged Google (Nasdaq: GOOG  ) over the Java-based code that makes Android tick, with neither side winning anything big from the other. You can call it a Google win if you want, but it's more of a return to how Android looked before Larry Ellison trained his legal eagles on the platform.

All right, already! What happens next?
I happen to believe there are huge differences between the iPhone line and Android smartphones. It doesn't take a design genius to tell them apart at a glance, including telltale signifiers like Apple's beloved circular "home" button, very different handset sizes, and Apple's strangely welcoming boxy shape versus Samsung's more sweeping rounded edges. The question is how these details translate into readings of the law.

Whether one side ends up owing money to the other doesn't matter much to me, given the two titans' ultra-deep pockets. I just want them to settle their legal differences and get on with the real business of making ever-more fantastic products for us typical consumers. That way, everybody wins.

Sit back and get an oil drum of popcorn ready. While waiting for next week's second act in this courtroom drama, you should grab a copy of our red-hot premium report on Apple. That deep analysis of Cupertino's business will keep you informed and entertained for hours, and then you even get a year's worth of timely updates as Apple makes market-moving news. Get started now.

Fool contributor Anders Bylund owns shares in Google but holds no other position in any of the companies mentioned. He also owns a Galaxy handset and might be just as biased as any iPhone-toting Apple fan. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Motley Fool owns shares of Oracle, Google, and Apple and has sold shares of Sony short. Motley Fool newsletter services have recommended buying shares of Google and Apple and creating a bull call spread position in Apple. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 05, 2012, at 8:30 AM, jafutral wrote:

    http://www.redmondpie.com/samsung-galaxy-s-and-apple-iphone-...

    Your reductionist description of Apple's claim is a huge over simplification. That Samsung was and is trying to capitalize on Apple's success (just as they have countless times before with other companies' products) is obvious. Good for Apple for being the company to finally call them on it.

    I wouldn't expect more fantastic devices for consumers to enjoy. What is the point if a company allowed to undermine and dilute another company's efforts? This kind of behaviour is never in a shareholder's interest.

    Joe

  • Report this Comment On August 05, 2012, at 9:31 AM, H3D wrote:

    " On the other hand, Apple can't claim a quick and easy total victory from Samsung's procedural gaffes."

    Come on, trying to get disallowed "evidence" to the jury via the press, is not a procedural gaffe. It's a serious contempt if court. Samsung were very lucky not to be hammered for this (so sar, the judge has explicitly reserved the right to do so later).

  • Report this Comment On August 05, 2012, at 12:00 PM, artlaz wrote:

    What an over-simplification. It's the touch screen patents that are key to this case. If Apple wins on those alone, future Android phones will lose a lot of their appeal - a huge win for Apple.

  • Report this Comment On August 06, 2012, at 7:12 AM, melegross wrote:

    Apple actually does license a number of Samsung's patents. Most of them because Samsung makes the parts the patents are for, and Apple buys those parts. The fight over the other Samsung patents revolves around the FRAND patents. And those are not being fairly priced to Apple. Samsung is under investigation (along with Motorola) in the EU, and an investigation is being studied here as well over both companies use of FRAND.

  • Report this Comment On August 06, 2012, at 7:24 AM, TMFZahrim wrote:

    @melegross, what I'd love to see happen in this case is both Apple and Samsung being forced to abandon their extreme posturing and simply publish the rates they charge to other companies. If Sammy really is asking Apple for rates far above what, oh, Nokia or RIM would pay for the same FRAND rights, there's a problem. If Apple expects to pay much less than others (volume discount?) there's another problem.

    Print a price list like your local McDonald's or Starbucks and make everyone pay the same price for the same IP product. There's "fair and reasonable" for you. Allowing companies to hide their FRAND rates makes no sense. And therein lies the rub of this whole farce.

    Anders

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