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Apple And Samsung Fight Over Billions

|About: Apple Inc. (AAPL)

The two giants in the technology industry are at loggerheads yet again, with a trial that is expected to re-litigate the damages that Samsung was ordered to pay in August of 2012. In the original case, Apple (NASDAQ:AAPL) accused the Korean company of using the look and feel of the Apple iPhone and iPad for its own products. When Samsung, countersued, it was clear that Apple was in for a protracted fight.

The Patent Infringement Case
The legal case began in 2011 and involved similarities between Samsung and Apple products that did not exist until the iPhone and iPad were released to the public. The case was argued before a 9-person jury in San Jose, California. Apple's attorneys were able to present enough evidence to show that Samsung actively used the Apple exterior design to appeal to customers. Two months later, Samsung filed a countersuit also alleging patent infringement. The jury agreed with Apple and awarded the company with $1.5 billion in damages. Samsung's countersuit got them nothing.

Decreasing the Damage Amount
Apple's argument was that they lost the customers they would have were it not for the similar design of the Samsung products. However, the story did not end with the jury's decision. Samsung continued to contest the amount of damages, and Judge Lucy Koh decided that this figure may not accurately reflect what Samsung owed Apple. She contends that the figure could not be reasonably calculated based on the documents that were available to the court. In fact, this figure may not be able to be calculated at all.

Samsung's ability to deliver a similar design of the products at a lower cost would not necessarily translate to more Apple sales, which has had a considerably higher price point. She struck $450.5 million from the settlement amount. This leaves a remainder of about $600 million for Samsung to pay.

The few hundred million dollars that remains in question is not a crushing amount for either Samsung or Apple. The two companies have had a number of settlement discussions but have been unable to come to any sort of agreement. Licensing rates for patented technologies is part of the dispute, which has held up any further progress.

For consumers, the legal wrangling will have little effect. Samsung has already re-designed covers to avoid similarities between the two companies products. For investors, further monitoring of the two titans is warranted. Apple filed yet another suit against Samsung in February of 2012. Appeals of both suits are expected to go on for some time.

For investors, Apple should continue to be a core holding in the technology section of your portfolio.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.