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(3rd LD) Samsung, Apple banned from selling some products in S. Korea

All Headlines 16:37 August 24, 2012

(ATTN: ADDS Samsung's response at paras 9-11, minor edits throughout)

SEOUL, Aug. 24 (Yonhap) -- A South Korean court on Friday ruled Samsung Electronics Inc. and Apple Inc., the world's two top smartphone makers locked in a multi-billion dollar patent war, infringed on each other's patents, ordering monetary compensation and partial product bans to both sides.

In a court ruling, the Seoul Central District Court ruled Apple infringed on two of Samsung's five disputed patents, including those for wireless technology, ordering damage payments of 40 million won (US$35,279) and a domestic sales ban on patent-infringing products.

District Court Judge Bae Jun-hyun ordered Apple to stop selling patent-breaching products, blocking the Cupertino, California-based firm from selling the iPhone 3GS, iPhone 4, and iPad 1 and 2 in South Korea. The move does not include the latest products such as the iPhone 4S.

The court decision covers a lawsuit filed by Samsung in April 2011, which was a counterclaim against Apple's initial patent infringement case lodged in a U.S. district court in the same month, a move that spurred the "patent war of the century" between the world's two biggest smartphone makers fighting for dominance in the US$219 billion global smartphone market.

Over another patent suit filed by Apple in June claiming Samsung infringed on its design and user interface patents, the court ruled that the Samsung violated a bounce-back feature, ordering the South Korean company to pay 25 million won in damages and to ban sales of products including the technology, such as the Galaxy S2 phone.

The bounce-back patent, which notifies users they are at the end of an electronic document by bouncing it back, has since been replaced by a new technology, leaving the South Korean tech giant relatively unscathed from the court ruling.

The district court, meanwhile, turned down Apple's claim on design patent infringements by Samsung. Bae said while the rounded corners and the large display of the devices are similar, Samsung's products are differentiated with a different home button. The judge also said Samsung's smartphone icons did not infringe Apple's.

While the court orders are valid in legal terms, the actual implementation is set to happen once the court sends the order to the two companies. The process usually takes one to two weeks.

Samsung welcomed the ruling on its home turf. "We welcome today's ruling, which affirms our position that Apple has been using our mobile telecommunications standards patents without having obtained the necessary licenses," the company said in a statement.

"Equally important, today's ruling also affirmed our position that one single company cannot monopolize generic design features," the company said, pledging to take "all available" measures to counter moves that deter market competition and consumer choice.

However, calls to an Apple spokesman in Seoul were unreturned.

Market watchers said the local ruling is unlikely to have a substantial impact on upcoming U.S. court moves, but said further action regarding compensation could impact the South Korean tech giant.

"A defeat in the U.S. could weigh on Samsung's profitability. Meanwhile, the trial results are likely to impact the future line-ups of both Apple and Samsung," said Kim Uno, an analyst at Hanwha Securities Co.

Another analyst, requesting anonymity, said Samsung is likely to have set aside allowances to brace for a possible defeat in the U.S. trial.

The Friday ruling comes ahead of a jury verdict in the U.S. that may come as early as Saturday, Korean time. The case, in which Apple is demanding $2.5 billion in compensation, is deemed more crucial in the wrangling between the two companies in terms of the money and market clout at stake.

A nine-member jury, consisting of Silicon Valley residents, wrapped up its second day of deliberations on Thursday. While some market watchers expect the jury to deliver a verdict this weekend, others forecast a verdict to come next week due to the complexity of the issue.

Shares of Samsung closed at 1,275,000 won on the Seoul bourse, slipping 0.93 percent from Thursday's close.



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