logo
  Join        Login             Stock Quote

Apple: Patent Ruling A Potential Setback

 December 20, 2012 10:35 AM
 


(By Mani) After re-examining Apple's "pinch and zoom" patent (No. 7,844,915), the US Patent and Trademark Office (USPTO) rejected all 21 claims of the patent, a positive for Samsung.

Apple, Inc. (NASDAQ: AAPL) can contest the ruling as part of the proceedings and defend its patent, but for the moment the '915 claims are at risk and tentatively invalid. This is a setback for Apple, especially in its intellectual property (IP) battle with Korea's Samsung.

Earlier this year, a US federal court jury found Samsung to have infringed five Apple patents involving scrolling, pinching and zoom functionality, the home screen GUI and design aspects. The infringement of the ‘915 patent was in part used by the jury in deciding to award Apple $1.05 billion in damages from Samsung.

[Related -Google Inc (GOOG): Why Nest Labs Deal Is A Wakeup Call For Apple Inc.?]

However, Samsung is appealing that decision, and if a key patent used in the case is no longer valid, Samsung's case for overturning the decision, and the amount of damages, is much stronger.

"Having the ‘915 patent (and any others) invalidated also likely impacts Samsung's (and other companies') willingness to pursue a licensing agreement with Apple," Oppenheimer analyst Ittai Kidron said in a client note.

Apple has been involved in several patent infringement cases with Android vendors such as HTC, Motorola. While the results are mixed, it did use the courts to push HTC to come to terms on a licensing agreement.

[Related -Apple Inc. (NASDAQ:AAPL): Why Gross Margins Will Expand In 2014 and Beyond?]

"We believe Samsung is unlikely to pursue a licensing agreement in the near term given Apple's recent setbacks with the USPTO," Kidron noted.

In April 2011, Apple slapped its first patent infringement suit against Samsung while Apple and Motorola Mobility were already engaged in a patent war on several fronts. By August 2011, Apple and Samsung were litigating 19 ongoing cases in nine countries, and it expanded to 10 countries in October by involving various mobile devices.

By July 2012, the two companies were fighting in more than 50 lawsuits around the globe, with billions of dollars in damages claimed between them. While Apple won a ruling in its favor in the U.S., Samsung won rulings in South Korea and Japan, and the UK.

Clearly, this IP battle isn't over, but unlike the earlier positive court decision against Samsung, the latest one is a setback for Apple. The legal uncertainty could put some pressure on Apple's shares. That said, we still believe the shares are overextended to the downside and embed too much pessimism regarding headwinds and execution.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageOld Bank's New Breakout has Big Rally Potential

One of my favorite things to see in a long candidate is a pattern of beating Wall Street's earnings read on...

article imageIs The Stock Market's 5-Year Return A Useful Proxy For Valuation?

Tobin’s Q, a market-valuation metric, is back in the news, in part thanks to a widely read Bloomberg read on...

article image4 Dogs To Sell Immediately

Despite the chorus of analysts and investors calling for the long-awaited correction, the market is showing read on...

article imageThe Fed's Magical Mystery Tour

What's going on at the Fed? Notorious dove, Charles Evans of the Chicago Fed, gave a speech in read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.