Does the Apple-Samsung Truce Mean the End of the Patent War?

A man uses a mobile phone as he walks past an Apple store in Beijing on April 14, 2014.

Wang Zhao/ AFP/ Getty Images

In an unexpected announcement last week, rival smartphone makers Apple and Samsung agreed to a ceasefire in the ongoing patent litigation battles in all countries except for the U.S. “Apple and Samsung have agreed to drop all litigation between the two companies outside the United States,” said the companies in a joint statement obtained by The Wall Street Journal. “This agreement does not involve any licensing arrangements, and the companies are continuing to pursue the existing cases in U.S. courts.”

The exclusion of any U.S.-based litigation is an important exception for Apple, since the Cupertino-based company has had the most success against Samsung in U.S. courts. Samsung was ordered to pay Apple about $930 million in total damages after several patent-infringement trials over the past two years. However, even though Apple won the most recent trial in May of this year, the verdict was widely viewed as a symbolic victory for Samsung since the Korea-based company was ordered to pay only $119 million instead of the $2.2 billion that Apple was seeking. Apple was also found to be infringing on Samsung’s patent that covers a method for retrieving and classifying digital data and was ordered to pay $158,400 in damages. With damages awards that likely didn’t even cover the cost of litigation, both companies appeared to emerge as losers in the last major patent-infringement battle in the U.S.

Although the exclusion of any U.S.-based lawsuits from the deal still leaves room for plenty of litigation between these two companies, the truce appears to reveal a growing realization from Apple that its long-running smartphone patent battle against Samsung and other rivals has largely been an exercise in futility. Despite the multi-million dollar damages awards, Apple’s patent-infringement lawsuits have failed to put a dent in Samsung’s finances or its majority share of the worldwide smartphone market.