Samsung Not Giving Up Despite Apple Verdict: Internal Memo

Apple won a huge $1 billion patent-infringement victory against Samsung Aug. 24, but the company says in an internal memo that the fight is far from over.

With the ink not yet even dry on the California jury verdict Aug. 24 that gave Apple a $1 billion victory in its patent-infringement lawsuit against Samsung, an internal memo released by Samsung says that it is not giving up in its legal fight against the allegations.

"The [U.S. District Court for the Northern District of California] verdict starkly contrasts decisions made by courts in a number of other countries, such as the United Kingdom, the Netherlands, Germany and Korea, which have previously ruled that we did not copy Apple's designs," Samsung stated in its memo. "These courts also recognized our arguments concerning our standards patents."

The seven-paragraph internal memo, published on Samsung's global blog, was released to summarize the company's reaction to the verdict, according to the company.

"Certainly, we are very disappointed by the verdict at the U.S. District Court for the Northern District of California (NDCA), and it is regrettable that the verdict has caused concern amongst our employees, as well as our loyal customers," said the statement. "However, the judge's final ruling remains, along with a number of other procedures. We will continue to do our utmost until our arguments have been accepted."

Not leaving anything to the imagination, Samsung officials said in the memo that they still intend to prove that their products are based on original designs that contain their own innovations. The company's contempt for Apple and its legal attacks was very clear in the Samsung memo.

"History has shown there has yet to be a company that has won the hearts and minds of consumers and achieved continuous growth, when its primary means to competition has been the outright abuse of patent law, not the pursuit of innovation," said the memo. "We trust that the consumers and the market will side with those who prioritize innovation over litigation, and we will prove this beyond doubt."

Speculation has been rampant throughout the legal dispute between the two technology powerhouses that whoever lost the patent-infringement fight in California in this case probably wouldn't just walk away and let the issues rest there. Instead, an appeal was almost a certainty by whichever side lost due to the huge issues at stake regarding patents and innovation in the still-growing mobile technology market.

For both companies, the stakes are truly huge because of the case's implications for competition in the multi-billion dollar mobile device market.

Samsung and Apple are the first and second best-selling smartphone vendors in the market, respectively, according to figures from research firm IDC. In the second quarter, Samsung smartphone sales jumped by 173 percent over the second quarter of 2011, to 50.2 million units.

Apple's sales grew by 27.5 percent, to 26 million units. The next two vendors on the list, Nokia and HTC, both suffered double-digit sales declines as customers gravitated to the top-selling Samsung and Apple devices.

Apple, however, holds a substantial lead in the sale of tablets, according to a report from IHS. In the fourth quarter, Apple held a 62 percent share of the global tablet market, with Samsung's Galaxy Tab line a distant second at 6.4 percent.

In the Aug. 24 verdict in California, a federal court jury found that Samsung infringed on Apple's mobile device patents in the design of its tablets and smartphones and directed Samsung to pay $1.05 billion in damages.

Samsung products found to have violated Apple patents included the Samsung Galaxy Tab and Galaxy 10.1 tablets and such smartphone models as the Captivate, the Galaxy S line, the Fascinate and the Epic 4 G. In the case of most patents, the jury ruled that Samsung's infringement of them was "willful."

If the jury verdict is upheld after the inevitable appeals, the $1.05 billion damages award has the potential to take a significant bite out of Samsung's cash reserves, which totaled $23.8 billion according to its second quarter earnings report released July 27.

The verdict was handed down after a three-week trial and three days of deliberations.

Elsewhere around the world, Apple and Samsung in 2012 have split other court decisions around the world regarding patent-infringement cases.

In July, a German court ruled for Samsung in a similar patent-infringement case involving product designs. In that case, the German court rejected an appeal by Apple regarding Samsung's newer Galaxy Tab 10.1N tablets. Apple had appealed an earlier court decision that found that the latest, redesigned Galaxy Tab 10.1N tablets are different enough and don't infringe on Apple's designs. At the same time, however, the German court also ruled that Samsung's earlier Galaxy Tab 7.7 tablet computers can no longer be sold anywhere in the European Union because they infringe on Apple patents.