After 3 weeks of heated testimony, the jury found Samsung (SSNLF.PK) willfully infringed on Apple's (AAPL) patents. Not just on one patent. Not two. The jury's verdict: Samsung swiped numerous Apple design, utility, and trade dress patents. Apple was exonerated of copying any of Samsung's patents. Samsung's penalty: $1.05 billion.
It was a big Apple victory. While under the $2.5 billion Apple was seeking, the judgment costs Samsung all the profits made selling those smartphones/tablets identified as knock-offs and then some. Samsung sold 21 million smartphones from Q2 2010 through Q2 2012 in the U.S. for $7.5 billion in revenue. In five minutes, all those earnings went poof.
What's a billion between frenemies? After all, Apple earned $40 billion TTM. Samsung cornered $10 billion TTM. Definitely a major sting for Samsung.
Yet, the verdict means so much more than money for Apple. It safeguards Apple's innovation. It took four years for Apple to develop the iPhone, only 3 months for Samsung to mimic the phone's icon design. The verdict discourages stealing Apple's technology. Competitors will think more carefully before so closely mimicking Apple's new products.
Microsoft (MSFT) has already signed a cross-licensing agreement with Apple gaining access to the patents involved in the Apple-Samsung dispute. This arrangement provides a template for future licensing deals. The deal specifies "no cloned" products.
Appeals aside, the San Jose jury erected a major disincentive for would-be intellectual property theft. As for slavishly copying Apple's next-gen iPhone, that's so 2010.
Disclosure: I am long AAPL.
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