Apple Wins Ruling, Sanctions in Samsung Infringement Suit

By Joel Rosenblatt - May 6, 2012 6:23 AM GMT+0700

Apple Inc. (AAPL) won sanctions against Samsung Electronics Co. for its failure to produce source code in a patent-infringement case in federal court in San Jose, California.

U.S. Magistrate Judge Paul S. Grewal wrote in his ruling yesterday that Samsung “plainly violated” a court order requiring it to turn over code to Apple, and ruled that Samsung won’t be able to offer evidence in the case about its efforts to “design around” three patents at issue in the case.

In its lawsuit, Apple claims that Samsung’s 4G smartphone and Galaxy Tab 10.1 tablet computer infringe its patents. In December, U.S. District Judge Lucy Koh in San Jose ruled against Apple’s request to block Suwon, South Korea-based Samsung from selling that phone and tablet in the U.S. That order followed an Australian court ruling lifting an injunction on the tablet there.

Samsung, which was the world’s largest seller of smartphones last year, and Cupertino, California-based Apple have filed at least 30 lawsuits against each other on four continents since April 2011.

In his ruling, Grewal said producing source code in patent litigation is “disruptive, expensive, and fraught with monumental opportunities to screw up.” Still, under federal law there is no exception to the requirement, especially when a defendant in a patent suit challenges the opposition’s failure to analyze the accused product’s source code, the judge said.

Design-Around

Grewal said he focused on Samsung’s so-called design-around source code developed for products with the “specific intent” of avoiding Apple’s patent claims. The ruling targets that code because “by their very nature design-arounds impact key questions of liability, damages and injunctive relief,” Grewal wrote.

“They are inevitably designed with substantial input from counsel for the specific purpose of distinguishing other products at issue,” Grewal wrote. “In short, they matter. A lot.”

Adam Yates, a Samsung spokesman, didn’t immediately return an e-mail after business hours seeking comment on the ruling.

“It’s no coincidence that Samsung’s latest products look a lot like the iPhone and iPad, from the shape of the hardware to the user interface and even the packaging,” Apple said today in an e-mailed statement. “This kind of blatant copying is wrong, and we need to protect Apple’s intellectual property when companies steal our ideas.”

The case is Apple Inc. v. Samsung Electronics Co. (005930), 11-01846, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net