Analyst: Apple-Samsung Settlement Hinges on Anti-Cloning Provision



By this point, the multi-faceted intellectual property dispute between Apple (NASDAQ:AAPL) and Samsung (SSNLF.PK) feels like it’s as old as time itself. The two companies have jousted in court rooms so many times over the past few years and have traded so many victories and defeats that it can sometimes be hard to tell what new developments are important, and what are superficial.

This spring, though, observers of the ongoing feud are in store for a significant development. Apple and Samsung are scheduled to head to court in northern California on March 31 in order to have another significant patent dispute sorted out. The case is somewhat similar to one that occurred in 2012, in which Apple accused Samsung of infringing on several of its patents.  The trial lasted for about a month, and at the end of the day, Samsung was forced to pay about $600 million in damages, with another $450 million vacated for future review.

Come this March, the two companies will head back to court in California over a dispute involving a different set of patents, including some that involve Samsung’s flagship Galaxy S III smartphone. The same judge, Lucy Koh, will preside over the coming trial.

However, letting a jury decide the fate of what could be billions of dollars in licensing fees and penalties is not necessarily in the best interest of both tech giants. Apple has historically fared better in court-determined settlements, but there’s no guarantee that it will slide to a favorable ruling in the coming case. The dispute between the two companies may best be settled the old fashioned way: with a face-to-face negotiation between the CEOs. At the request of Judge Koh, this is exactly what will happen on February 19. Apple and Samsung’s top executives and in-house legal council will sit down to see if they can reach a mutually palatable agreement.

Like the fiscal negotiations in Washington, though, there are some conditions in the Apple-Samsung debate that must be met if any settlement is to be reached. In Apple’s case, this is an anti-cloning provision. Such a provision would mean that, once the dust from the current battle settles, Apple would still have the right to sue Samsung if, as Florian Mueller put it, ”Samsung’s products resembled Apple’s offerings too closely in ways that could actually be avoided by means of designarounds.”

As Mueller sees it, Samsung will have to agree to this provision if there is any hope of a deal from the February settlement negotiations. The provision, though, is an anathema to Samsung. Mueller notes that, “It’s definitely at odds with the strategy that enabled Samsung to become the global market leader in smartphones.”

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