SAN JOSE, CALIFORNIA—What may be the biggest tech lawsuit of all time is now in the hands of a nine-person jury. Apple and Samsung lawyers gave their final arguments today in a San Jose courthouse that was, once more, packed to the brim with reporters and observers.
The accusations that brought us all here? Apple’s lawyer described a three-month orgy of copying kicked off by a "crisis of design" at its Korean competitor. Samsung’s attorney countered that argument in grand terms, telling jurors that the future of free competition rests in their hands, and they should stop Apple from "seeking a competitive edge through the courtroom."
In tech litigation, this is a clash of the titans—the two largest smartphone companies battling for dominance of the US market. Apple is asking for up to $2.75 billion and injunctions that could kick Samsung’s phones off the market, while Samsung is asking for $422 million for infringement of its own patents.
Apple lawyer tells jury: Samsung’s three months of copying ripped off a 4-year investment in iPhone
The story of Samsung’s copying, said Apple lawyer Harold McElhinny, was told in Samsung’s own documents. He ran through the competitive analysis from inside Samsung that showed the company was worried about its user interface technology. There was the e-mail from the designer who talked about a "difference of Heaven and Earth" between the iPhone and a Samsung phone; the same e-mail talked about a "crisis of design" at the company.
That crisis kicked off a period of "intense copying," said McElhinny. "In those three months, Samsung was able to copy Apple's 4-year investment in the iPhone, without taking any of the risks—because they were copying the world's most successful product."
The competitive analysis document, translated from Korean, came up more than once; it looked at successful iPhone features and suggested how Samsung could react to them (although, the document specifically recommended "differentiating" at points.)
Samsung didn’t send key witnesses, McElhinny said—like the designer who made the first Galaxy phone. "Samsung put on no witness who even admitted to seeing, much less writing, the copying documents we showed you," said McElhinny. "Instead of witnesses, they sent you lawyers."
When it came to proving the trade dress case, McElhinny cited a survey showing people returning Samsung products to Best Buy, sometimes mistakenly believing they had purchased iPads.
Like his opening, McElhinny’s closing pitch to jurors was part sales pitch, and used many of the same laudatory press clips about Apple products that had been shown to the jury earlier. "Even Samsung thought the iPhone changed the world," noted McElhinny excitedly, referring to an internal Samsung document. "An obvious design is not called ‘revolutionary’ by the company’s biggest competitor."
As for the prior art that Samsung had said showed Apple’s patents were invalid, McElhinny was dismissive: "It's hard to imagine holding the Diamond Touch in your hand and making a phone call," he scoffed.
When it came time to wield the damages hammer, McElhinny didn’t hold back. "Samsung makes fun of our damages claim," he said. "They make fun of us asking for billions of dollars." But two serious factors are driving Apple’s $2.75 billion damages request, he said: first, Samsung has sold 22.7 million infringing phones and tablets in the US—that’s 30,000 units per day in the relevant period. Those have generated $8.16 billion in revenue, McElhinny said.
"The damages in this case should be large—because the infringement has been massive," he said.
Samsung to jury: Apple’s lawsuit is an attack on free competition
Samsung’s closing was led by Charles Verhoeven, the same lawyer who did the opening and handled many key cross-examinations. Verhoeven bashed Apple experts like Susan Kare, calling them paid experts who didn’t really do serious studies or talk to people.
Before he did that, though, he spent a few minutes attacking Apple’s motives in bringing this lawsuit.
"Apple is here," Verhoeven began, "asking you to prevent its largest competitor from giving consumers what they want—smartphones with big screens. So, why is Apple doing this? Because its patents are being infringed? Both companies have thousands of patents."
Verhoeven got straight to it, suggesting another motive. "Rather than compete in the marketplace, Apple is seeking a competitive edge through the courtroom," he said. Apple is suing more than 20 products, and looking to get over $2.7 billion, he reminded the jury. "It’s seeking to block its biggest and most serious competitor from even attending the game."
Then he launched into a mom-and-apple-pie speech, Silicon Valley-style. Verhoeven continued:
"Look out there in the pews. You see all those reporters? Why are they here? They're here because of your decision. Ladies and gentlemen, if you go Apple’s way, you could change the way competition works in this country. Is this country going to have vigorous competition between competitors? Or giant conglomerates with thousands of patents that block competitors?"
"Sure Apple has great products—we don't deny that," said Verhoeven. "But competition is what built this country, and we can see it for ourselves here in Silicon Valley."
Apple’s case about copying has been a type of "shell game," he said—using old or inapplicable documents to prove different points. Slides that Apple had shown, with older, blockier Samsung phones before the 2007 introduction of the iPhone—and sleeker ones after 2007—were "an intentional attempt to mislead the jury," said Verhoeven. Samsung had large-screen phones before 2007, but Apple had chosen not to include them.
He reviewed the testimony of Samsung designer Jin Soo Kim, who had said that Samsung began developing the Galaxy Tab in October 2009, several months before the iPad was shown to the public. "And they called him a copyist," said Verhoeven, incredulous.
Apple’s final rebuttal: "Make your own designs. Make your own phones."
The contention that Apple doesn’t want to compete is "startling… and it is wrong," said Bill Lee, the Apple lawyer who delivered a final rebuttal.
"No one is trying to stop them from selling smartphones," he said. "All we're saying is: make your own. Make your own designs, make your own phones, and compete on your own innovations."
Suggesting that competition in America would fall apart from a pro-Apple verdict is nothing but a scare tactic, Lee said. Samsung wanted to take the patent laws the jury had just spent the last two and a half hours being instructed on and "throw them out the window," he said. "We can’t do that, because the Constitution says we have to have them, to protect innovation."
And Apple’s damage demand isn’t too high considering how much Samsung has made. "They copied our products and made $8 billion," said Lee. "What they're saying to you now is—‘We want you to let us keep all $8 billion. The number for you to focus on is $8 billion, and the question is, do they get a get-out-of-jail free card?"
The McElhinny came back in, giving his own spin on Verhoeven's "future of innovation" speech.
"If you find for Apple in this case, you will have re-affirmed the American patent system," said McElhinny. "People in this valley will continue to invest. They will take chances—because they know their investment will be protected."
A big verdict against Samsung would indeed change the world, said McElhinny. But it wouldn't harm competition—it would send a message that copying isn't the right way to compete. "If you award us the damages we are seeking, you will have upended Samsung's cynical game plan," he said. "You will have taken the profit away from them. You will have taught Samsung and everyone else that has gone down that road: that's not the way to profit."
The jury now has the case, and will return to the San Jose courthouse tomorrow morning to begin its deliberations.
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