Apple, Samsung Again Fail to Settle Patent Case Before Trial

Feb 22, 2014 5:40 pm ET

(Updates with company responses in 10th paragraph.)

Feb. 22 (Bloomberg) -- Apple Inc. and Samsung Electronics Co. told a judge they again failed to settle their dispute over smartphone technology, with their next trial in federal court in California set to begin March 31.

Apple Chief Executive Officer Tim Cook, Samsung mobile chief Shin Jong-Kyun and other executives from both companies attended a full-day session with a mediator in the first week of February, and representatives from both sides had several follow-up phone calls with the mediator, according to a joint status report filed late yesterday.

“Notwithstanding these efforts, the mediator’s settlement proposal to the parties was unsuccessful,” Apple and Samsung said in their report to U.S. District Judge Lucy Koh in San Jose, who had urged them to pursue settlement talks before the trial. “Parties remain willing to work through the mediator jointly selected by the parties.”

The world’s top two smartphone makers have spent hundreds of millions of dollars in legal fees on claims of copying each other’s features in a global battle to dominate the market.

“Even though Apple seems to be winning across the board” in courtrooms, “they’re not winning in the marketplace,” Stanford Law School professor Mark A. Lemley said in an interview before the report was filed. Favorable verdicts, rulings and even court orders blocking the sales of Samsung products “don’t seem to be slowing Samsung’s momentum very much,” he said.

Smartphone Shipments

Samsung accounted for 28.8 percent of global smartphone shipments in the three months ended Dec. 31, down from 29.1 percent a year earlier, Framingham, Massachusetts-based market researcher IDC said in a Jan. 27 statement. Apple’s share fell to 17.9 percent from 20.9 percent.

Apple and Samsung previously tried and failed to reach an agreement in court-ordered settlement negotiations. In 2012, in their first patent-infringement case in San Jose, U.S. Magistrate Judge Joseph C. Spero handled negotiations. The companies also met at least twice in 2011 to discuss settling their dispute before the U.S. International Trade Commission, according to an Apple filing.

Apple has asked Koh to impose a sales ban on more than 20 Samsung smartphones and tablets from the companies’ first trial in San Jose, as they prepare for the second trial.

Moral Principle

Whether the iPhone-maker thinks “it’s getting something out of the litigation” or the company believes “there’s a moral principle at stake,” it is “not willing to let it go,” Lemley said. Samsung would seem to benefit from a licensing deal, though it doesn’t have much motivation to settle if Apple is determined to get an injunction or wants Samsung to pull major features from its phones, Lemley said.

Adam Yates, a spokesman for Suwon, South Korea-based Samsung, and Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined to comment on the court filing.

The case is Apple v. Samsung, 12-630, U.S. District Court, Northern District of California (San Jose). The first San Jose case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California (San Jose).

--Editors: Peter Blumberg, Michael Hytha