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Summary:

A jury awarded $1.05 billion to Apple after the “tech trial of the century.” The award raises questions about the patent system and innovation — but also about why a jury was allowed to decide it in the first place.

Jury 2

Unless you spent the weekend under a rock, you’ve heard that a jury ordered Samsung to hand Apple $1.05 billion for violating its patents. The verdict and month long trial has captivated tech types but also provides more ammunition for critics who say juries shouldn’t be deciding these questions in first place.

Background

The jury in Apple-Samsung confronted hundreds of questions, some of them on topics obscure enough to make an intellectual property lawyer blanche — design patents, patent exhaustion and so on. Yet, they were done in less than three days. As Abovethelaw editor, Elie Mystal, mused “It would take me more than three days to understand all the terms in the verdict! Much less come to a legally binding decision on all of these separate issues. Did you guys just flip a coin?”

A more damning criticism came from the popular Groklaw site which pointed out a series of basic errors by the jury: a decision to award $2 million for a patent that Samsung hadn’t infringed in the first place; a decision to assign damages based on punishment, not compensation.

This type of slapdash decision-making lends support to Judge Richard Posner and others who argue that it’s time to end jury trials in patent cases. Here are three more reasons Apple v Samsung should not have gone before a jury:

Reason 1: Jurors can be influenced by brand loyalty

Let’s remember that the jurors who decided the case were not Blind Justice but consumers who are influenced by brands.

That influence can be considerable. According to Robert Kozinets, a marketing professor at York University, “brand communities” that emerge around products like Apple’s are supplanting religions or neighborhoods as a source of personal identity. He says that Apple today has greater ideological power than many countries.

“That identification with Apple will lead to community and a sense of loyalty. It also leads to a sense of empowerment that can lead people to step up and protect it because they know there are so many others like them.”

There’s nothing wrong, of course, with defending Apple (or Google or Microsoft). The problem is that brand loyalty can interfere with patent policy. When asked to decide a patent case, juries are likely to go with emotion over evidence — deciding a case based on brand loyalty rather than the law at hand.

In the case of Apple-Samsung, the trial was about a beloved American brand versus a foreign competitor. Not only that, but the trial took place in Silicon Valley, right in the heart of Apple land. This was like asking Boston Red Sox fans to judge the conduct of the New York Yankees.

In this climate, it’s no wonder that the jury appears to have made their decision based on a desire to “send a message” to Samsung rather than parsing harder technical questions about whether Apple’s rectangle and “bounce-back” patents should have existed in the first place.

Reason 2: Juries are too easily swayed by “he’s a copycat”

During the trial, Apple offered an easy-to-follow narrative that is familiar to anyone who has been in grade school: “That’s my idea. He took it and pretended it was his.” Samsung on the other hand had to explain why, even though Apple had patents, it was not infringing and that the patents were not actually valid patents and so on. One story is crisp and clean, the other is furtive and guilty-sounding. Guess which story has more punch in the hands of a trial lawyer?

In the words of Posner: “patent plaintiffs tend to request trial by jury because they believe that jurors tend to favor patentees, believing that they must be worthy inventors defending the fruits of their invention against copycats.”

Unfortunately, these simple narratives distort what patents are all about. Patents are not primarily about stopping copycats (that’s why we have trademarks) but are instead a form of industrial policy based on 20-year monopolies. If the policy is effective, it produces more innovation. If the patent policy is not effective, it creates monopolies that harm competitors and consumers. In Apple-Samsung, there’s a good chance we’re doing the latter; we may regard Apple as an innovator and Samsung as a copycat — but that doesn’t mean it’s a good idea to award Apple sweeping monopolies that may raise prices and stunt the smartphone market.

Patents are as complex as other industrial policies like subsidies or regulatory regimes. When disputes arise, they should be put before an expert tribunal rather than a jury that is easily swayed by schoolyard “copycat” narratives.

Reason 3: Jury trials over patents are a waste of money

Apple and Samsung will spend  from $20 million to $500 million in legal fees, according to sources surveyed by the Wall Street Journal. While the companies would have blown a bundle no matter what, the jury presence added millions to the tab. This figure doesn’t even take account of the costs to the federal justice system or to the jurors and their employers. And for what? To respond to questions likely beyond their capacity and that will, in any case, be picked apart on appeal.

There’s a faster, cheaper and more efficient way to handle this. As Judge Posner proposes, it makes sense to stuff future patent disputes into a corner of the US Patent and Trademark Office.

Juries are not responsible for all that ails the patent system. But getting rid of them would be a useful step.

(Image by Junial Enterprises via Shutterstock)

  1. Solid well reasoned post !

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  2. Fernando Maneca Monday, August 27, 2012

    This is also a great example of Free Market gone awry: “Why compete when you can litigate.”

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    1. No, this is an example of common sense. If Samsung was capable of innovating like Apple, it would have been Samsung that would have come up with iPhone first — for they had been in the mobile industry too long and kept producing the same less-than-desirable phones and not-so-good user interface. If not for iPhone, we wouldn’t have the so-called (and wrongfully claimed) ‘better-than-iphone’ galaxy phones today. When you guys get time, go through all the evidence (not a random one, but all of them from both sides) submitted to the jury. It’s not the ‘manipulative’ aspect of the jury, but the human common-sense that played in this trial.

      It’s actually the users of Samsung devices (that don’t know who established the modern smartphone market the way it is) that have blind-folded their eyes with their Samsung phones/tablets that have simply followed Apple’s design to the new market. It sounds very easy to rule off Apple and say they are simply trying to keep the market for themselves by means of legal battles; but that’s because it’s not your company and it’s not you who spent billions in redesigning the smart phones like never before so people finally wanted to buy them, and it’s not your hard-work that’s just copied by Samsung — it you were in Apple’s shoes, I bet you would argue differently.

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      1. Tell me, how can anyone on this earth patent a rectangle with round edges? That is like patenting cars because it has four wheels. I don’t care much for Samsung, but what Apple is doing here is absurd…

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      2. Clearly Samsung is capable of innovating given the fact that they have been in the market for so long compared to Apple. What Apple relies on heavily is standards based patents to get the wireless, BT, WiFI and other radio technologies which if they didn’t they would be DOA on their phone. Of course they don’t actually want to pay anyone for the patents their use without permission so they wait for someone to sue, take in BILLIONS in sales and pay out a few million in penalties, cost vs profit Apple plays their own game.

        I would say Samsung bet these patents should not have been, and would not be enforceable and in this first go round they lost. I have my concerns that a jury arrived at a decision of “sending a message” so quickly and ignored some of the directives by Judge Koh. Bottom line is this case is far from over and it will be quite some time to come before we see any cash paid if at all.

        Google states that their stock OS does not infringe on these patents based on their implementations and perhaps the best way for Samsung to achieve record sales, stay out of the legal fray and continue to push latest and greatest tech is to use STOCK ANDROID, this way they can update more quickly, easily and efficiently. Besides no one really likes Touch Wiz anyways.

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      3. Earl, that’s what you think the entire patent war is about — rectangles with round edges? The patents are way more than that covering design as a whole including internal component layouts, user interface, and icons. That’s why I said, please learn all about this case before saying something silly like that.

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      4. @Raja,
        No. It is you who does not understand what this trial was about. It has NOTHING to do with internal component layout!
        Besides the ridiculous argument that they own rectangular shape with rounded corners, they argue that some of the icons play in their trade dress, such as the green phone icon. What do you want a phone icon to look like? Have you ever seen what a phone logo look like on a pay phone on the street (those that still exist)? Are you so shocked that green means GO, and red means STOP? Do you think Apple invented the a musical note to denote a Music icon?
        They also argue that a row of 4 icons is exclusive to Apple? Don’t you think it has something with the width of a finger? The Galaxy Note has 5 icons per row. – The Tabs have 7 or 8. They are just wider and more fingers fit.
        I would wish you try to read the article and understand the underlying problems in jury patent trials before going with your knee-jerk reaction.
        The fundamental issue is that these juries are dealing with issues that are fundamentally beyond their capacity to understand them.

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      5. I guess all the monitor manufacturers would go bankrupt soon because the monitors are so cheap and now have to pay loyalty fee to Apple.

        Apple, through their R&D, come up with the idea of rectangle shape screen with round corners. I guess their designers, R&D just come out of a cave and would never see a monitor before. Hilarious.

        Oh, I forgot that Apple was inspired from some monitors look, and perhaps, one of those could belongs to Samsung.

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      6. Samsung had a phone with rectangular shape and rounded corners before iphone, but apple removed that phone from evidence and samsung was not allowed to show their own evidence, because they were a little bit late… on appeal it will be different

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      7. Here’s my view on it all:
        Apple have managed to, no Apple (thanks to the LG Prada) have saw what was coming next, refined it and pretty much led most smartphone makers down that path. During this process they have managed to patent what should be the STANDARDS for this generation on touchscreen ‘smart phones’

        Now we have strategic ‘choke points’ created by Apple to stunt the opposition and thanks to their potential duopoly with microsoft you can’t make a phone that has a flat, rectangular touchscreen device with a bezel.

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      8. Ok fanboy answer me this. Lets say I make this new cool laptop that I market really well and it becomes a huge success. Now I decide I changed the laptop market so it now belongs to me. So I submit a patent for a hinged screen attached to a keyboard and the “geniuses” at the USPTO decide to grant it. Is it ok for nobody else to be able to create a laptop in the traditional sense ever again?

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      9. “If Samsung was capable of innovating like Apple, it would have been Samsung that would have come up with iPhone first “. Couldn’t the same be said for Apple then? If Apple was capable of innovating they would have invented the first cell phone. I understand that the first cell phones came out in the 80′s; however, time has no bearing on innovation. Apple took an existing idea (cell and smartphones in general) and improved on it. We all know that the original Galaxy S looked alot like the iPhone…and it probably infringes on trade dress. But newer phones such as the Galaxy Nexus or the S III do not look like iPhones…they are clearly different devices that have improved on the iPhones original innovations and that is what this whole fight is about…how can Apple patent a rectangle with rounded corners and glass on the front…that would be like patenting the inclusion of a speaker and microphone on a cell phone and then suing people for it…it is obvious and thus should not be protected under IP laws

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      10. Maybe you should look at the “2006 Samsung iPad” and see who came up with the basic look first before deciding who can innovate. At least Apple’s patent on Samsung’s case design wasn’t upheld. If we had a more sensible legal system, Samsung would not be charged $2 million for a patent claim that Groklaw found they never violated, nor would we have groups with legal authority insisting things like demonstration of products that predate the iPhone product group at Apple and include the same iPhone features in question don’t count as prior art. I don’t have the stomach to check more than 3 of these patents, but so far, giving Apple a patent for the look of Samsung’s product is the most sensible.

        I will admit that Apple is often first to market with market changing products, but they’re not very innovative. Someone has always beaten them to market on technical terms, but it usually lacks a level of quality for mass appeal.

        P.S.
        Smartphones date back to 1994, with most of iPhone’s features being on the market before Apple had a product to sell. The only thing new that I know of was a phone having multi-touch.

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    2. This kind of reply always makes me shake my head. It’s not a “free market” when there are government regulations that enforce monopolies, which is what patents are – monopolies enforced by government regulation – not “free markets.”

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    3. Would you rather have, “Why innovate when you can duplicate?”

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      1. what an original and innovative comment

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      2. Apple fanboys are mentally ill.

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  3. How much did google paid you for this article? Can you be detailed about that pls?

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    1. Sean, give me a break. Comments like yours show why it may be impossible to assemble an impartial jury for a patent trial. No one at GigaOM accepts money or favors for coverage (it’s unethical and, under FTC rules, illegal)

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    2. Sean,
      What part of the article do you object to? Can you be detailed about that pls?

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  4. The same could be said of much of our civil litigation system. They are crazy expensive, and not sophisticated enough to determine important business matters, contracts, etc. I guess juries make sense for criminal matters, for our safety, they make no sense at all in civil matters.

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  5. This is hyperbole and link bait. If you can explain how the jury got it wrong, by all means, go for it, but don’t crap on the system with a straw man argument.

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    1. If you don’t think reason #1 is at all considerable, then you are merely using a straw man argument.

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      1. “Could be influenced” doesn’t mean “influenced.” Again, show me where the jury made poor decisions based on the testimony and evidence, not what could have been.

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    2. Do you think taking about 2 minute per question to answer 700 questions in such a complex case is considered properly evaluating the case? Not even bothering (or accounting in my math) to reading and understand the more than 100 pages of jury instructions?

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      1. On dating site, they usually ask has more than 100 questions about yourself. The first 70 answer is truly about myself, which I took time to read, the rest is about someone else that I don’t even think I answered those questions. 700 questions about something that you don’t even know? I guess the juries truly answered first 30 questions, the rest, either random mask the answer or be influented

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    3. Read the Groklaw link that is cited.

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  6. This is a great post… I hope that things change, because this case was silly. The fact that the jurors said “we wanted to send a message” just shows that it’s not about what was right but what they felt.

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  7. I’ve heard a lot of opinion about the jurors, but I’ve heard nothing about the quality of Samsung’s Lawyers. Better lawyers — a better outcome for Samsung. Perhaps they were holding back for the appeals process?

    Apple had something truly special and unique when they invented the iPhone. But the patents didn’t really identify what that was. Maybe it’s not possible to protect a complicated, amalgam of technology with a handful of patents.

    At the end of the day, even though Apple prevailed, Samsung can still make an iPhone killer.

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    1. Oh I agree with you Samsung’s legal team was not on the ball, late filings, misteps abound and perhaps Samsung will chose to replace them going forward (or not since they would be at a disadvantage or worse off starting from scratch). But their legal team seemed to make a lot of errors.

      I also find issue with Judge Koh and the time allotted for each side, it seems as though Samsung had literally two legal cases to fight vs Apple’s single case. Samsung had to defend position of being accused of infringing on patents that may or may not (or should or should not have ever been approved) plus they had to rush to prove Apple violated their patents. I don’t see Samsung going after Apple on the Intel patent issue if they actually felt it was a non-starter due to patent exhaustion.

      Still Apple has ZERO issue with stealing others patents without paying or negotiating payment and they have been sued many times in the past and lost, but with their cash on hand they could fight any legal action and really never lose any money.

      Yet Apple FAILS to sue any of the phone mfg’s in China over what is litteraly blatant copying right down to the singular round button, physical design and layout etc. Apple just doesn’t seem all that interested in fighting the battles in China, perhaps they should learn to legally enforce their patent claims in every market.

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  8. You could make the same points in other areas of the law.

    (1) Juries are influenced by brand loyalty (the “thin blue line” of police in criminal cases for example, or a favored local shopkeeper in a slip-and-fall lawsuit brought by an out-of-towner)

    (2) Juries are too easily swayed by all kinds of strange things (the lawyer’s necktie, the witness’s fumbling for words)

    (3) Jury trials consume a lot of money no matter what the area of law.

    But 9 times out of 10, a jury of ordinary people does a better job at figuring out who’s lying and who’s telling the truth than a judge would.

    Moreover, in the United States, you have a constitutional right to a trial by jury for anything serious. It would require an amendment to change that. Are you sure you want to put the Bill of Rights at risk in the amendment process just because a few high profile patent cases aren’t handled perfectly?

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    1. What judge Posner is proposing is to fight the validity of patents in the USPTO. It is the USPTO that is granting these wide scope patents, and they should be dealing with the mess they are creating.

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      1. USPTO is who issued all those bad patents in the first place. They approve everything hard enough to read and hope that courts will sort out the rest.

        Patents on obvious things and patents on things with clear prior are are a consequence of USPTO. Before USPTO can decide patents disputes, it should first fix its own broken internal processes.

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      2. Judge Posner is right the patent laws need fundamental change. What if another company had patented sharper square edges. No other company would be able to produce a phone( without paying a licence at least). WP8 has resizable tiles which are in essence are widgets does Android now sue Microsoft (I think they should – payback). The point is somethings in design are logical other are unique. Rounded edges square grid layout phone icon etc are logical. Resizing widgets voice command etc can be considered unique features. Apple has patented fundamental design based on evolution and ergonomics. Samsungs error was it idolised the iPhone but actually made a better product. Lesson see what others are doing and do it better.

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      3. Perhaps the answer is a forced review of the patents. A patent appeal if you will, where the accused asks for a clarification of the patent in question to make certain it’s valid. Prior art claims could be introduced as well and if a review of the evidence proves that the patent shouldn’t have been issued, the USPTO would revoke the patent.

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    2. Actually, the constitutional right to a jury is only applicable to criminal trials, not civil. Just the same as “beyond reasonable doubt” applies in criminal trials and “preponderance of evidence” is for civil trials. To understand the difference in criminal vs. civil, ask OJ Simpson (sorry ’bout bringing him up).

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    3. The Bill of Rights guarantees the right to a “jury of your peers.” How exactly are these 9 people peers to either Apple or Samsung?

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  9. Why were these “reasons” not presented before the verdict came out? Had the verdict favored Samsung would these “reasons” be any different? It seems everyone has suddenly become smart enough to comment on everything from jury’s intelligence to their use. This is really second rate journalism.

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    1. +1

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      1. If this the the first time you two have heard of this issue, you should come out for some sun a bit more often. This is not a new argument about patent trials.
        This has been going on for years, and it is getting worse with the wide scope patents being granted, the propagation of patent trolls, and the strategy by some tech companies to use the courts and questionable patents to protect market positions.

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    2. None of these arguments are new. They have been around for decades. Recently though the problem has been brought to the forefront by massive patent trolling. Also if you hadn’t noticed this huge trial just took place over patents that are EXTREMELY broad and general. Hence all the articles about how fubared the patent system has become.

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  10. So now we’re throwing out our whole legal system? Um… yea… I think some IT folks have let this whole thing get to their head a little. Today has been one of the biggest jokes on blogs with rabid Fandroids spewing hate all over the place. What a joke.

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    1. The joke is people choosing to keep a blind eye on a failing patent system that is no longer serving the purpose it was intended.

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      1. So you wouldn’t change your stand if the jury had favored Samsung?

        I am no Apple fan, neither do I own any of their products. But I have some sense of design and aesthetics and I know how difficult it is. And Apple deserves to protect it’s designs. Simply saying Apple had patented a rectangle really goes to show how little techies understand design. Which also explains why Samsung always wanted to and actually copied Apple’s designs.

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      2. Man, the bit I don’t understand is that the Android fans seem to think it is fair that a company can copy all the parts of a phone that they absolutely hate. It makes no sense whatsoever.

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      3. But it is – its helping Appl..I mean Ameeiv…I mean China have a monopoly

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      4. 888Charled

        Perfectly astute observation.

        What this trial showed is how biased Fandroids are and that justice is the least of their concerns.

        Because the outcome was against their wishes

        1. The jury is composed of only idiots

        2. The judge is an idiot

        3. Apple is evil

        4. The patent system is broken

        5. Creating special effects in movies is the same as inventing (I’d love to see the Fandroids howl if some ever invents the warp drive how you can’t patent it because George Lucas alread “invented” it in Star Wars

        Now if the jury rule in favor of Samsung, Fandroids would then claim

        1. The jury is smart like them and that’s why they were able to rule in 21 hours

        2. The judge is super smart like them

        3. Apple got what it deserved precisely because it is evil

        4. The patent system worked

        5. This proves that Samsung can legally copy the phone they all hate so much

        The fact of the matter is, the only biased ones are Fandroids themselves. Doesnt matter how the jury foreman clearly explained in interviews how they efficiently went about determining infringement.

        Talk about bitter frothing-at-the-mouth weeping and knashing of teeth of Biblical proportions. Like this article.

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      5. gautamonline: If you can explain to me, and everyone else, just how the iPhone’s rectangular shape provides a unique and distinctive feature that’s exclusive to ONLY the iPhone, then please go ahead.

        Until then, in my eyes at least, a rectangle is still a rectangle, no matter how hard you try to change it.

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    2. That argument can go both ways. Considering possibilities, if Apple had lost, iPhone supporters would be taking the same stance the Fandroids are taking.

      The joke is that you think being an Android fan is a bad thing.

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      1. no, the joke is the patent system

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