Apple (Nasdaq: AAPL), the world's most valuable technology company, has posted a $2.6 million bond with a U.S. district court to enforce an injunction against its supplier and rival Samsung Electronics (Seoul: 005930).
It's the company's first reaction since U.S. District Court Judge Lucy Koh Tuesday ordered Samsung to temporarily ban sales of its Galaxy Tab 10.1 model in the U.S., at least until a full trial starts before her in San Jose, Calif., on July 30.
Koh determined that the Korean electronics giant had infringed upon the patents of the Cupertino, Calif.-based electronics designer. Although Samsung has a right to compete, it does not have a right to compete unfairly, by flooding the market with infringing products, her opinion said.
In turn, U.S. lawyers for Samsung responded, formally requesting Judge Koh to stay her injunction. Now she'll have to hear arguments from both sides on a date to be determined.
We are dealing with two superpowers here, said Alexander Poltorak, CEO of General Patent Corp., a Suffern, N.Y.-based specialist in intellectual property and patents. It's like the U.S. and the U.S.S.R. used to be in the days of the Cold War.
Rather than settle their patent war in the U.S., as well as Asia and Europe, Poltorak predicted, Samsung will probably direct its engineers now to redesign the Galaxy Tab so that Apple won't be able to say its designs were infringed.
They won't have to change the electronics inside, just change the outer appearance of the product, said Poltorak, whose company doesn't work with either side.
Samsung can afford to do the rework, and Apple, with cash and investments exceeding $110 billion at the end of its last quarter, can sue Samsung forever, Poltorak said.
Judge Koh's injunction hasn't hurt Samsung much at home, though. Shares in Seoul rose another 1,000 won (US 86 cents) to 1.168 million won Thursday, following Wednesday's 28,000 won rise.
Shares of Apple fell $8.43 to $566.07 in late-Thursday trading.
Apple for years had argued that Samsung, while a major supplier, had obtained knowledge of its plans for tablets as well as the iPhone and had copied the look and feel of its best-selling products. The company filed more than 30 lawsuits in the U.S., Asia and Europe, as well as before the U.S. International Trade Commission and the European Commission.
General Patent's Poltorak said those other lawsuits are just proxy wars for Apple's real target: the Android OS developed by Google (Nasdaq: GOOG), the No. 1 search engine. This week, Google announced the latest upgrade for Andoid, dubbed Jelly Bean, and the company announced its new Nexus 7 tablet for sale next month against the iPad.
Both sides in that battle are fully armed, Poltorak claimed, especially now that Google has beefed up its intellectual property, buying more than 1,100 patents from International Business Machines Corp. (NYSE: IBM) and then acquiring Motorola Mobility Holdings, with another 17,500 patents.
Judge Koh made her ruling after the case was sent back to her by a federal appeals court earlier this month. That court in Washington, D.C., hears all appeals in patent cases.
To be sure, Samsung last week won a case in the Netherlands last week against Apple. In The Hague, a court found that Apple had infringed upon Samsung patents dealing with how iPhones and iPads connect to the web,
Samsung's lawyers said they would appeal Judge Koh's opinion at the federal appeals court. We will take necessary legal steps and do not expect a ruling to have a significant impact on our business operations, the company said.
The Korean company said it already has a diverse range of Galaxy Tab products, a suggestion that other models will continue to be sold to U.S. customers even if the injunction stands.
Apple's market value is $530.4 billion.