A court case between Apple Inc. and Samsung Electronics may have determined the future of the smartphone market.
In a patent and trademark infringement case against Samsung, Apple was awarded $1.05 billion dollars in damages, one of the largest intellectual-property awards on record.
Samsung, a publicly traded company in the Korean stock exchange, lost 7.5 percent on Monday, August 27 following the verdict. This resulted in a loss of $12 billion to Samsung’s market capitalization.
Apple, on the other hand, closed out on the New York Stock Exchange, with a 1.8 percent increase, resulting in an $11 billion gain. This brought Apple’s market capitalization, already the highest in the world, to $633 billion.
On what grounds?
Apple mainly based the lawsuit against Samsung on the similarities between the smartphones.
Apple’s lawsuit, seeking more than $2.5 billion dollars, stated that Samsung violated four design patents and three software patents.
The patents that were ultimately determined to have been violated covered the pinch and zoom function, double tap and zoom function, bounce back scroll effect, and the trade dress registration that covers the look of the front, back and home screen of the iPhone.
South Korea lays blame at both doors
In a South Korean court, both Apple and Samsung were found guilty of infringement. Apple was found to have infringed upon Samsung’s wireless communication patents, resulting in the banning of the iPhone 3GS and 4, and the iPad 1 and 2 from South Korean stores. Samsung in turn was found guilty of infringing on the bounce back ability in scrolling and banned the Galaxy S2 and other Galaxy products from South Korea.
The sales of iPhone 4S and Galaxy S3 were not affected.
How will this affect the consumers?
Apple has dominated the smartphone market since its iPhone hit the market in 2007. Over the years, the market has attempted to become more competitive in order to give the consumer more choices. One of Apple’s biggest competitors has been Samsung, a South Korea based company, which is considered one of the world’s biggest information technology (IT) companies, based on 2011 revenues.
Samsung’s main competition to the Apple iPhone has been its wildly popular Samsung Galaxy S smartphone. The phone, as well as the Galaxy tablet, was the focus of the lawsuit filed by Apple in April 2011, which accused Samsung of committing patent and trademark infringement.
The results of the lawsuit may mean product delays on Samsung’s side, as well as the removal of some of its products from stores, like the Galaxy 10.1 tablet.
Apple also announced plans to file an injunction against Samsung products, which could result in banning future product sales in the United States.
The Galaxy S phone, which operated on the Google Android operating system, may face software updates to change how the phone works, and later models might be re-worked to avoid infringing upon the trade dress registrations held by Apple.
The largest problem will be the now gun-shy companies looking to enter the smartphone market. With Apple holding the patents on many important aspects of smartphones, the market on phones and tablets available to consumers may narrow.
UPDATE: A Japanese court tossed out Apple’s suit, and said that the tech giant Samsung did not infringe on Apple’s patent. This came as a win for Samsung, who saw a market rise Friday after the ruling.