Samsung attacks 'patent law abuse' after Apple win
Samsung has sent a memo to staff in the wake of losing a court battle with Apple hitting out at what it calls abuse of patent law. On Friday, a US court ordered Samsung to pay $1.05bn (£665m) in damages to Apple for infringing its patents. Shares in Samsung fell 7% in Seoul in Monday trading, their biggest one-day fall in almost four years, as a result. Samsung said there had yet to be a company that had succeeded by relying on the "outright abuse of patent law". The case is one of the most significant rulings in a global intellectual property battle. Samsung said it would be appealing against the verdict.
"We initially proposed to negotiate with Apple instead of going to court, as they had been one of our most important customers," the company said its memo to staff. "However, Apple pressed on with a lawsuit, and we have had little choice but to counter sue, so that we can protect our company." It said that the US court's verdict contrasted "starkly" with decisions made in other countries, including the UK, the Netherlands and Germany.
"History has shown there has yet to be a company that has won the hearts and minds of consumers and achieved continuous growth, when its primary means to competition has been the outright abuse of patent law, not the pursuit of innovation," the memo said. "We trust that the consumers and the market will side with those who prioritise innovation over litigation, and we will prove this beyond doubt."
Analysts said investors were worried that the ruling could see certain products taken off the market. "An adjustment in the next few days is unavoidable as the damage amount was much bigger than market expectations, and there are further uncertainties, such as the possibility of a sales ban," said John Park, from Daishin Securities. Apple has said it will seek an injunction to block sales of Samsung products in the United States, a key market, at a court hearing on 20 September. One of the biggest concerns for Samsung is whether Apple will now target the Galaxy S3, which was not included in the recent trial, as it focussed on older products.
The flagship product is Samsung's best selling smartphone and if it is included in a US ban on sales that would give Apple a major advantage in the market, analysts said. In a separate move, the giant chipmaker ASML said Samsung would be investing $975m in its research programme into next-generation chipmaking technology and in buying a 3% share in the company. Intel Corp and TSMC have both recently signed similar investment deals into the co-investment programme, whose aim is to tie in ASML's customers and develop new technology designed to lead to cheaper products.
Apple and Samsung phones A nine-member jury in San Jose, California ruled on 24 August that Samsung had infringed Apple patents for mobile devices. It was the the most closely-watched of many similar patent disputes being contested in courts around the world between electronics manufacturers. In recent weeks, a court in South Korea ruled that both Apple and Samsung had copied each other, while a British court dismissed claims by the American company that Samsung had infringed its copyrights.