CEOs of Apple, Samsung in US court mediation over patent row

The chief executives of Apple Inc and Samsung Electronics Co Ltd came face to face on Monday in court-directed mediation in the United States over a dispute in which the iPhone maker claims the South Korean company has "slavishly" copied some of its products.

Apple's Tim Cook and Samsung's Choi Gee-sung have been instructed by a federal judge to appear for mediation in San Francisco to help resolve the bitter patent litigation between the two firms.

The US case, the most closely watched in a global patent war between the two companies involving some 20 cases in 10 countries, is set for trial at the end of July in San Jose, California. Each company denies the other's allegations of patent infringement.

Patent expert Florian Mueller cautioned against any expectations that mediation, which is being increasingly used to try to resolve US civil disputes, would lead to a significant breakthrough in the case.

"This dispute isn't ripe for settlement," he said. "Under the present circumstances, the two companies' delegations should spend a couple of fun days in Yosemite Park or Napa Valley, rather than meet in court only to pretend they're being constructive."

Apple, the maker of hit products such as the iPod, iPad and iPhone, has a complex relationship with Samsung, a conglomerate that makes computer chips, gadgets including its Galaxy range of smartphones, and televisions.

While Samsung's smartphones and tablets run on Google's Android operating system and compete with Apple's products, Samsung is also a key components supplier to Apple.

The US company, which investors value at close to $600 billion, has accused Samsung of "slavishly" copying the iPhone and iPad through products that run on Android. Samsung, which has a stock market value of about $161 billion, has counter-sued with claims accusing Apple of infringing its patents.

A Samsung representative declined to comment, while Apple spokeswoman Kristin Huguet reiterated a prior statement that Apple needs to protect its intellectual property against "blatant copying".

Both companies have a lot at stake in the case. Their share prices hit record highs this year as they reported soaring profits, partly fueled by their dominant position in the smartphone sector.

Samsung sold 44.5 million smartphones in the first quarter of 2012, giving it a 30.6 percent share of the global high-end market. Apple's sales of 35.1 million iPhones gave it a 24.1 percent share.

'Big gap'

On Sunday in Seoul, the head of Samsung's mobile division said the South Korean company wanted to resolve differences with Apple.

"There is still a big gap in the patent war with Apple," JK Shin said, before departing for the United States for the mediation talks. "But we still have several negotiation options."

The latest mediation session on Monday and Tuesday will be overseen by US Magistrate Judge Joseph Spero. He declined to comment.

Samsung argues its technologies are worth 402,000 won ($350), or 60 percent of the iPhone retail price of 671,000 won, on the basis that 3G is the only function differentiating the phone from Apple's digital music player iPod Touch.

In July 2010, just a month after Samsung introduced its first Galaxy product, Apple expressed its concerns to Samsung over its smartphone design and interface and demanded changes, according to Apple lawyers.

Samsung didn't reflect those issues and continued to release products that copied Apple's innovation, they said.

"Apple needs more time than it originally thought to reach a tipping point at which it has serious leverage over Samsung," said Mueller.

Reuters in San Francisco

(China Daily 05/22/2012 page17)