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Samsung, Apple Agree to Drop Patent Disputes Outside the US

Samsung, Apple Agree to Drop Patent Disputes Outside the US

By Agence France-Presse | Updated: 6 August 2014 15:35 IST

Arch-rivals Samsung and Apple have decided to drop a series of bitter patent disputes pending in multiple courts outside the United States, the South Korean electronics giant said Wednesday.

The two companies have been locked in a prolonged war of legal attrition in close to a dozen countries, with each accusing the other of infringing on various patents related to their flagship smartphone and tablet products.

"Samsung and Apple have agreed to drop all litigation between the two companies outside the United States," Samsung said in a statement.

"This agreement does not involve any licensing arrangements, and the companies are continuing to pursue the existing cases in US courts," it added.

The patent row kicked off in earnest back in 2011, when Apple sued Samsung in a US court, and swiftly went trans-continental with cases being heard in South Korea, Germany, Japan, Italia, the Netherlands, England, France and Australia among others.

The fight will continue in US courts where Apple has accused its South Korean rival of massive and wilful copying of its designs and technology for smartphones and tablets, and has asked for a bar on US sales of Samsung smartphones and tablet computers.

Samsung has counter-claimed that Apple had used some of its technology without permission.

Despite the multiple cases, neither company has managed to land a knockout legal blow against the other, and a number of judges have urged the two giants to settle their differences out of court.

The two firms had been pushed into talks by a court order that saw Apple CEO Tim Cook and his Samsung mobile communications counterpart JK Shin attend a full-day negotiation session in early February, along with their advisors and legal teams.

But despite several follow-ups, the mediator's settlement proposal was not taken up and the litigation continued.

In the latest development in May, a jury in federal court in California awarded Apple close to $120 million in damages in one of its patent suits with Samsung.

The award was only a fraction of the more than $2 billion Apple had sought at the outset of the trial, and the result was seen as partial victory for both sides.

The sudden truce comes amid growing questions about the merit of Apple's strategy to pursue rivals through courts as a way to protect the iPhone.

"They have nothing to gain with a prolonged legal battle because the market situation has changed no more merit of the old strategy to expand market share through attacks on rivals," Daishin Securities analyst Claire Kim told AFP.

Due to challenges from Chinese and Indian firms, Apple and Samsung will try to maintain their solid status in the premium smartphone market through innovation, she said.

"The two giants are not expected to expand lawsuits in the US because of the pressure to produce attractive new high-end products," she said.

Samsung's second-quarter net profit plunged 19.6 percent from a year ago to 6.25 trillion won ($6.1 billion), as competition from cheap Chinese phones and the strong won saw sales slump in its key mobile business.

Alarm bells have been sounding for a while over Samsung's reliance on smartphone sales in mature markets such as Europe and the United States.

Efforts to expand sales in emerging markets, most notably China, have stumbled over the growing challenge posed by smaller rivals producing cheaper handsets.

There is a general consensus that smartphone evolution has hit a barrier that will only allow incremental improvements on existing design and technology, rather than market-changing reinvention.

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