Jury Finds Both Apple and Samsung Guilty of Patent Infringement, Samsung to Pay $119.6 Million, Apple to Pay $158,400

After three days of deliberations and several weeks of testimony, the jury reached a unanimous verdict in the second Apple vs. Samsung trial (via CNET). The jury found that Samsung willfully infringed on three of the five patents involved in the lawsuit, ordering the South Korean company to pay $119.6 million, far from the $2 billion total Apple was hoping for.

All of Samsung's devices were found to have infringed on the '647 data syncing patent, while some were found to have infringed on '721, slide-to-unlock. Samsung was not found to have infringed on '959, universal search, or on '414, background syncing. Judge Koh had also previously ruled that Samsung had infringed on Apple's '172 autocomplete patent.

As for Samsung's claims against Apple, Apple was found guilty of violating the company's '449 patent related to an "Apparatus for recording and reproducing digital image and speech", and was ordered to pay Samsung $158,400.

In this second lawsuit, which began on March 31, Apple argued that Samsung owed it $2.2 billion in damages for infringing on five separate iPhone patents. Samsung argued that Apple had infringed on two of its own patents, asking for $6.2 million in damages.

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Over the course of the trial, Apple called in numerous experts to argue why it was owed $2 billion, chalking the total up to lost profits and reasonable royalty estimates. Samsung argued that Apple's $2 billion request was ludicrous, insisting it should owe only $40 million, or $1.75 per device.

While Samsung focused on proving that Apple was actually targeting Android in its suit, calling multiple Google witnesses like former Android chief Andy Rubin, Apple presented the jury with testimony from its own employees on the design, development, and marketing of the original iPhone.

During the trial, news broke that Google agreed to cover lawyer fees and potential damage awards related to some of the patents in the lawsuit. Four of the five patents Apple has accused Samsung of infringing on are part of the Android operating system, but the two Google had agreed to help with were not the same patents Samsung was found guilty of infringing.

This damages award adds to the recalculated damages from the original Apple vs. Samsung trial, in which Samsung was ordered to pay Apple a total of approximately $890 million. This suit focused on newer devices, including the Galaxy S III, Galaxy Note II, Galaxy Tab 10.1, the iPhone 4/4s/5, the iPad 2/3/4, the iPad mini, and fourth and fifth generation iPod touch.

Update 5:50 PM PT: Apple issued the following statement to Re/code following the verdict:
"We are grateful to the jury and the court for their service," Apple told Re/code. "Today's ruling reinforces what courts around the world have already found: that Samsung willfully stole our ideas and copied our products. We are fighting to defend the hard work that goes into beloved products like the iPhone, which our employees devote their lives to designing and delivering for our customers."
Update 6:05 PM PT: Apple's lawyers claim to have identified an error, suggesting one product (the Galaxy S2) found to infringe on the '172 patent received no damages award. The jury will need to return on Monday to finalize the damages award.

Update 5/4 11:40 AM PT: After calculating damages for the missing Galaxy S2, the jury has awarded Apple an additional $4 million and adjusted the damages for some other products, keeping the overall amount that Samsung owes at the original $119.6 million.

Apple Considering 'Full Health and Fitness Services Platform' Modeled on the App Store

Apple allegedly is looking beyond the iWatch wearable device and may be creating a new health and fitness ecosystem modeled on its successful iOS App Store, claims a mobile health executive who recently spoke to Reuters. Similar to the iOS App Store, this new platform may allow companies to develop their own mobile medical applications that could tie into Apple's iWatch wearable device.
One mobile health executive, who asked not to be named, told Reuters he recently sat down with an Apple executive from the iWatch team. He said the company has aspirations beyond wearable devices, and is considering a full health and fitness services platform modeled on its apps store.
As part of iOS 8 later this year, Apple is rumored to be launching a new Healthbook app, which is expected to serve as a repository for health-related data acquired from a variety of sources. Based on the breadth of data the app appears to be able to track, it is unsurprising that Apple will be looking to open up the ecosystem to third parties to help users fill out all of the various content areas.

One company that could benefit from an Apple health and fitness ecosystem is Nike, which has scaled back its work on its Fuelband hardware to focus on expanding its software-based NikeFuel platform. Though Nike CEO Mark Parker would not directly comment on specific plans with Apple, Parker did note in a recent CNBC appearance that Apple is a longtime partner and that he is "excited about where that relationship will go forward."

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iWatch concept by Todd Hamilton, based on the Nike FuelBand

Much of today's report focuses on Apple's health- and sensor-related hires over the past several years, most of which have previously been detailed and which have been focused around non-invasive monitoring of vital health parameters such as sleep, oxygen saturation and blood glucose levels. Apple has hired talent from notable companies such as pulse oximetry company Masimo, medical sensor company Vital Connect and Philips Sleep Research.

Apple's latest reported hire is MIT researcher Eric Winokur, who worked on ear-worn devices for monitoring blood pressure and heart rate. Information about Winokur's hiring surfaced alongside a sketchy rumor claiming Apple is planning to launch an EarPods model with integrated heart rate and blood pressure sensors. While a new Tumblr blog post reveals that the claim was indeed fabricated, Apple patent applications suggest the company has indeed considered the integration of biometric sensors into its headphone line in the past.

Apple's sensor-laden iWatch has been rumored for several years, with most recent rumors suggesting that it may debut late this year. It is not expected to be unveiled at the company's Worldwide Developers Conference set for early June.

iOS 7 Security Flaw Leaves Stored Email Attachments Unencrypted [Updated]

Apple states that it uses data encryption to protect email message attachments, but a report from security researcher Andreas Kurtz, via ZDNet, claims iOS 7.0.4 and later does not include this security feature.

security-flaw-email-attachmentsKurtz detected this flaw in iOS by accessing the file system on an iPhone 4 running iOS 7.1 and 7.1.1. Browsing through the email folder for an IMAP account, Kurtz discovered that the email attachments were stored in an unencrypted state. Besides the iPhone 4, Kurtz also was able to reproduce this vulnerability on an iPhone 5s and an iPad 2 running iOS 7.0.4.
I verified this issue by restoring an iPhone 4 (GSM) device to the most recent iOS versions (7.1 and 7.1.1) and setting up an IMAP email account1, which provided me with some test emails and attachments. Afterwards, I shut down the device and accessed the file system using well-known techniques (DFU mode, custom ramdisk, SSH over usbmux). Finally, I mounted the iOS data partition and navigated to the actual email folder. Within this folder, I found all attachments accessible without any encryption/restriction
Kurtz reported this issue to Apple, which acknowledged the flaw, but provided no timetable for patching it. This isn't the first security issue Apple has faced this year. The company recently patched a serious SSL connection verification flaw in both iOS and OS X that allowed an attacker with a "privileged network position" to capture data protected by SSL/TLS.

Update 3:11 PM PT: In a statement given to iMore, an Apple spokesperson said the company is working on a fix for the issue.
"We're aware of the issue," an Apple spokeswoman told iMore, "and are working on a fix which we will deliver in a future software update."

Apple's Stock Price Breaches $600 for First Time in 18 Months

Apple's share price has closed above the $600 mark for the first time since October 2012, some 18 months ago. It illustrate a significant recovery for Apple's stock, which hit a low of $388/share in late June 2013.

The price is mostly psychological, made even more so by the fact that Apple will split its stock by a 7/1 ratio next month, dropping the price down to roughly $85 per share at current prices. The stock split is meant to allow more investors the opportunity to invest in the company.

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Apple's market capitalization is roughly $518 billion, well ahead of Exxon Mobil's $444 billion. Apple is the most valuable publicly traded company in the world. The company's all time high share price is $702.10, originally hit in September 2012.

Samsung's 'Infringe First and Stall as Long as Possible' Strategies Are Nothing New

On the day that a San Jose jury submitted a final verdict on the damages that Samsung owes Apple in the second United States patent infringement lawsuit between the two companies, Vanity Fair has published a lengthy piece that takes a look at Samsung's long (and successful) history of using patent infringement as a business tactic.

Back in 2010, before Apple filed an initial lawsuit against Samsung, executives from Cupertino (including lawyers) met with Samsung executives in Seoul, where it was made clear by Samsung VP Seungho Ahn if Apple chose to pursue a lawsuit, Samsung would countersue with its own patents. "We've been building cell phones forever," Ahn told Chip Lutton, an Apple lawyer at the time. "We have our own patents, and Apple is probably violating some of those."

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The iPhone compared to the Samsung Galaxy S

As it turns out, stealing key ideas from other companies and then using its own portfolio of patents to draw out lawsuits is a tactic that Samsung used long before Apple came into the picture.
According to various court records and people who have worked with Samsung, ignoring competitors' patents is not uncommon for the Korean company. And once it's caught it launches into the same sort of tactics used in the Apple case: countersue, delay, lose, delay, appeal, and then, when defeat is approaching, settle.
In 2007, Sharp filed a lawsuit against Samsung, alleging that the South Korean company had violated its patents. Samsung countersued, drawing out the lawsuit as it continued to produce TV sets using the stolen technology, building up its TV business. Samsung was found guilty of patent infringement years later in 2009, at which point it settled with Sharp to avoid an import ban.

There's a similar story with Pioneer, who filed a patent infringement lawsuit against Samsung over plasma television technology in 2006. Samsung countersued, dragging on litigation and appeals until a 2009 settlement. The long and expensive legal battle caused Pioneer to shut down its television business while Samsung thrived. Samsung has pulled the same stunt with Kodak, Apple, and several other technology companies.

Samsung hit Apple with the same tactic following the release of the iPhone. As has been documented during the ongoing global lawsuits between the two companies, Samsung evaluated the iPhone feature-by-feature and came up with 126 instances where Apple's iPhone was better than its own offerings, which led to the development of the Galaxy S.
Bit by bit, the new model for a Samsung smartphone began to look--and function--just like the iPhone. Icons on the home screen had similarly rounded corners, size, and false depth created by a reflective shine across the image. The icon for the phone function went from being a drawing of a keypad to a virtually identical reproduction of the iPhone's image of a handset. The bezel with the rounded corners, the glass spreading out across the entire face of the phone, the home button at the bottom--all of it almost the same.
Following the release of the Galaxy S and Samsung's refusal to sign licensing agreements with Apple due to its former history of successfully avoiding significant penalties for copying intellectual property, Apple filed its first lawsuit against Samsung. Samsung, of course, followed, leading to where we are today -- Samsung has thus far been ordered to pay Apple just over a billion dollars in the United States after two lawsuits, but appeals are far from over. Samsung has continued to develop its Galaxy line of devices and has cemented itself as Apple's biggest competitor.
Meanwhile, as has happened with other cases where Samsung violated a company's patents, it has continued to develop new and better phones throughout the litigation to the point where even some people who have worked with Apple say the Korean company is now a strong competitor on the technology and not just a copycat anymore.
The full story, which covers Samsung's history, its past patent lawsuits and other legal woes, Apple's creation of the original iPhone, and the dispute between the two companies, can be read over at Vanity Fair.

Apple to Host iPhone Upgrade Event at Retail Stores

Apple is planning to hold an iPhone upgrade event at its stores this week in an effort to boost sales, a source told 9to5Mac. Starting this week, Apple will be emailing owners of older iPhone models who are upgrade eligible about the new event, and will apparently separate from Apple's current iPhone trade-in program.
This event will be held in multiple states across the United States, and Apple is said to be preparing for an influx of visitors to its stores on the levels of traffic driven to stores for new product debuts. Apple will brief Apple Retail management on the initiative tomorrow, according to the source.
Apple will be launching other new marketing and sales initiatives to help increase iPhone sales as well. There's no word on what types of marketing and initiatives Apple could use, but they will be tied to Apple's retail stores.

New Apple retail chief Angela Ahrendts, who officially joined the company on May 1 and began her first full week today, will oversee the program.

Apple once again noted that iPhone sales hit another record for Q2 2014, making up 57 percent of Apple's sales for the quarter for all products. CEO Tim Cook also noted in the conference call that Apple has started selling iPhone 4's in the "very, very low single digit percentage" and last year said he wanted to sell more iPhones in stores.

Apple Expanding 'Buzz Marketing' Team Focused on Product Placement

Apple yesterday posted a job listing for a "Buzz Marketing Manager" based out of New York (via Dwight Silverman and Business Insider), with the description outlining a position responsible for managing such areas as product placement in film and television and fostering relationships with "high-profile influencers" to promote the Apple brand.
- Product placement in film & television. Work with the creative side of film & TV to place Apple products. This includes getting necessary approvals, managing and trafficking product inventory, following up with studios, and monitoring media for successful placements.

- Build and maintain relationships with high-profile influencers. Influential Apple users could be directors, actors, artists, athletes, designers and select brands or institutions. Determine which relationships have potential to maximize benefit to Apple.

- Leverage relationships to book events at Apple Store Soho. Collaborate with Apple Retail, PR and iTunes to ensure maximum positive outcome for the effort. Produce a podcast for each event into iTunes and maximize the promotional value of the content through PR efforts and partner channels.
Apple describes the role as new and reporting to the head of worldwide Buzz Marketing, suggesting that Apple is expanding its efforts in the area.

Buzz marketing has been receiving significant attention recently, in large part due to Samsung's aggressive efforts in the area led by the "Oscar selfie" posted by Ellen Degeneres. The stunt, which became the most retweeted Tweet in history, was quickly revealed to have been coordinated by Samsung, which was a promotional sponsor

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Modern Family's "Game Changer" episode with iPad promotional tie-in

Apple's Buzz Marketing program has been in place for two decades, however, having been developed and led by longtime Apple employee Suzanne Lindbergh until her departure for Jawbone last October. On her LinkedIn profile, Lindbergh highlights her role in helping produce over 1,500 events for Apple's in-store Meet the Filmmaker/Actor series, as well as her work on Apple's original "Hello" teaser ad for the iPhone and a promotional tie-in for an episode of Modern Family days before the launch of the original iPad.