For three years, Apple and Samsung have clashed on a scale almost unparalleled in enterprise history, their criminal battle costing more than one thousand million greenbacks and spanning four continents. Beginning with the wonderful secret undertaking that created the iPhone and the overdue Steve Jobs’s fury while Samsung—an Apple provider!—introduced a shockingly comparable tool,

Kurt Eichenwald explores the Korean employer’s report of patent infringement, among other ruthless enterprise tactics, and explains why Apple might win the battles but still lose the struggle. On August 4, 2010, amid the bustle of downtown Seoul, a small institution of executives from Apple Inc. Driven through the revolving door right into a blue-tinted, 44-tale glass tower, equipped to fire the primary shot in what could grow to be one of the bloodiest corporate wars in history. The showdown had been brewing in view that spring, when Samsung released the Galaxy S, a brand new access into the telephone market.

Apple had snagged one early distant place and gave it to the iPhone group at its Cupertino, California, headquarters. The designers studied it with developing disbelief. The Galaxy S, they notion, was natural piracy. The standard look of the telephone, the display, the icons, and even the box appeared the same as the iPhone’s. Patented capabilities were equal, including “rubber-banding,” in which a display photo bounces slightly while the consumer attempts to scroll beyond the lowest. Same with “pinch to zoom,” which permits users to control photo size by pinching the thumb and forefinger collectively at the display. And on and on.


Steve Jobs, Apple’s mercurial leader government, become livid. His groups had toiled for years developing a leap forward cellphone, and now, Jobs fumed, a competitor—an Apple supplier no much less!—had stolen the design and lots of features. Jobs and Tim Cook, his chief operating officer, spoke with Samsung president Jay Y. Lee in July to specify their concern about the similarities between the two telephones but obtained no first-rate response. After weeks of sensitive dancing, smiling requests, and impatient urgings,

Jobs decided to take the gloves off. Hence the meeting in Seoul. The Apple executives had been escorted to a convention room high within the Samsung Electronics Building, in which they had been greeted by approximately half of a dozen Korean engineers and lawyers. Dr. Seungho Ahn, a Samsung vice chairman, was in fee, consistent with court information and those who attended the assembly.

After some pleasantries, Chip Lutton, then Apple’s associate popular counsel for highbrow belongings, took the ground and placed a PowerPoint slide titled “Samsung’s Use of Apple Patents in Smartphones.” Then he went into a number of the similarities he considered particularly outrageous. However, Samsung executives showed no reaction. So Lutton decided to be blunt. “Exactly what I stated,” Lutton insisted. “You copied the iPhone. The similarities are completely beyond the opportunity of coincidence.”

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Ahn might have none of it. “How dare you assert that,” he snapped. “How dare you accuse us of that!” He paused, then stated, “We’ve been constructing cellular phones forever. We have our very own patents, and Apple might be violating a number of those.” The message became clear. If Apple executives pursued a claim towards Samsung for stealing the iPhone, Samsung might come proper returned at them with a theft claim of its own. The war strains were drawn. In the months and years that were observed,

Apple and Samsung would clash on a scale almost unheard of within the commercial enterprise globally, costing the two organizations greater than a thousand million greenbacks and engendering tens of millions of pages of legal papers, a couple of verdicts and rulings, and more hearings. Ut that can be Samsung’s motive all alongside. According to various courtroom facts and those who have labored with

Samsung ignoring the competition’s patents isn’t unusual for the Korean employer. And once it’s caught, it launches into the same type of tactics used within the Apple case: countersue, put off, lose, put off, enchantment, and then, while defeat draws close, settle. “They never met a patent they didn’t assume they could like to apply, regardless of who it belongs to,” says Sam Baxter, a patent lawyer who once treated a case for Samsung. “I represented [the Swedish telecommunications company] Ericsson, and they couldn’t lie if their lives relied on it, and I represented Samsung and that they couldn’t tell the fact if their lives depended on it.”

Samsung executives say that the pattern of match-countersuit criticized by a few outsiders misrepresents the agency’s technique to patent problems. Because it’s by far one of the world’s largest patent holders, the organization often unearths others in the technology enterprise who have taken its intellectual property. Still, it chooses now not to record proceedings to venture those movements. However, as soon as Samsung itself issued, the executives say, it’ll use countersuits as a part of a defense approach.

With the Apple litigation, the combat isn’t over—beginning statements for the maximum latest patent lawsuit, which asserts that 22 more Samsung merchandise ripped off Apple, had been heard in the U.S. District Court in San Jose, California, on April 1. While both sides have grown weary of the litigation, courtroom-ordered agreement talks have failed. The most current attempt occurred in February, but the two sides quickly told the courtroom they couldn’t remedy the dispute independently.

No count number of the monetary outcome, Apple can also nicely emerge from the prison wrangling as the loser. Two juries have located that Samsung did indeed plot to scouse borrow the iPhone’s appearance and generation, that is why a California jury, in 2012, provided Apple more than a billion dollars in damages from Samsung (decreased to $890 million in overdue 2013 after the judge determined that some of the calculations had been faulty). But, because the litigation drags on,

Samsung has grabbed and grown a percentage of the marketplace (currently 31 percent versus Apple’s 15.6 shares), now not handiest through pumping out the “Apple-ish, simplest, less expensive” era; however, by way of growing its revolutionary capabilities and merchandise. “[Samsung] transitioned to a higher degree of competition than they were at that time, and I suppose a part of that changed into a result of them having to combat this warfare with Apple,” a former senior Apple executive says.

It was surely simply another page from the Samsung playbook, often used earlier than When some other organization introduced a breakthrough technology, muscle in with much less expensive versions of the identical product. And the method had labored, helping the Samsung Group to develop from almost nothing into an international behemoth. Samsung was founded in 1938 using Lee Byung-chull, a college dropout and the son of a rich Korean landowning circle of relatives.

When Lee became 26, he used his inheritance to open a rice mill, but the enterprise quickly failed. So it was on to a new endeavor, a small fish-and-produce exporting concern that Lee named Samsung (Korean for “three stars”). Over the years that were observed, Lee accelerated into brewing and then, starting in 1953, added a sugar-refining organization, a wool fabric subsidiary, and more than one insurance agency.

Jeffery D. Silvers
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