Apple Wins a Patent Battle, but Samsung Owns Core Smartphone Technology

On Friday, a federal jury found Samsung guilty of infringing several patents owned by Apple in a high-stakes lawsuit in which Apple was awarded $1.05 billion in damages. Reports state that Apple is now seeking injunctions to block the sale of a number of Samsung devices.In July of 2011, Envision IP analyzed the tablet-related US patent filings of the major tablet manufacturers, notably Apple and Samsung.  We identified 970 pending patent applications filed by Apple related to various tablet and smartphone components, such as displays, image capturing, hardware, input recognition, and wireless technologies.  Similarly, we identified 3,419 pending patent applications covering the same technologies filed by Samsung, more than four times the number of filings by Apple.

The bulk of Samsung’s technology focus appears to be centered around display hardware (544), user interface hardware and software (814) and input recognition technologies (890).  The bulk of Apple’s technology focus appears to be centered around these same technologies; display hardware (187), user interface hardware and software (276) and input recognition technologies (294).

Clearly, both Apple and Samsung have focused their research and development for their mobile device products around these three core areas.  However, the sheer number of patents owned, and pending applications filed, by Samsung related to tablet and smartphone technologies dwarfs Apple’s patent portfolio.

According to the Economist, as of August 2011, Samsung was “a particularly important supplier” to Apple, providing “some of the [iPhone’s] most important components: the flash memory that holds the phone’s apps, music and operating software; the working memory, or DRAM; and the applications processor that makes the whole thing work. Together these account for 26% of the component cost of an iPhone.”

Apple is likely not outsourcing the manufacturing of these components to Samsung out of convenience, rather, Samsung owns patents for these core technologies essential to Apple’s products.  Without such licenses from Samsung, Apple would potentially expose itself to patent litigation, or alternatively, have to develop its own chipset, processor, and other hardware technology that may not perform as well as the Samsung components.

Given this unique relationship between Apple and Samsung as business partners, as well as cut-throat business competitors, it will be interesting to see how Samsung will leverage its immense patent portfolio against Apple in light of the latest courtroom verdict.

Samsung certainly has many options. For starters, Samsung could increase Apple’s licensing fees for its hardware technologies.  However, a more prudent option for Samsung may be to assert its hardware related patents, an area where it has strength (versus design and ergonomics-related patents) against Apple.

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