Apple 2.0

Covering the business that Steve Jobs built

Samsung counter-sues Apple

April 22, 2011: 7:04 AM ET

The move comes a week after it was charged with "slavishly" copying the iPhone and iPad

Image: Mobilzer

In a classic legal tit-for-tat, Samsung announced Friday that it had filed patent infringement suits against Apple (AAPL) in South Korea, Japan and Germany.

A week earlier it had been sued by Apple in a California federal court for violating a broad range of Apple's intellectual property rights. According to that suit, Samsung's Galaxy smartphones and tablets have been "slavishly" copying the look, feel and even the packaging of the iPhone and iPad.

The legal battle is ironic on several levels.

Apple's beef is really with Google (GOOG), which makes the Android operating system that owes so much to Apple's software development work. But rather than pursue Google, which earns no money from the sale of Android, Apple has been pursuing manufacturers of the Android phones that have, in some markets, overtaken the iPhone.

"When a nail sticks out, [people] try to pound it down," Samsung's chairman Lee Kun-hee told reporters Thursday, according to the Wall Street Journal.

Meanwhile, Samsung and Apple continue to do a lot of business together.

Apple bought nearly $6 billion worth of Samsung components last year, and according to COO Tim Cook, it is Samsung's single largest customer. But with the Galaxy products, he told analysts on Wednesday, "we felt the mobile communication division of Samsung had crossed the line, and after trying for some time to work the issue, we decided we needed to rely on the courts."

Rather than answer Apple's charges directly, Samsung's suits change the subject. According to a company spokesman they allege that Apple infringed on a series of Samsung patents covering mobile communications technology. Specifically:
  • Technology to optimize data transmission
  • Techniques for reducing power usage during data transmission
  • 3G technology for reducing data-transmission errors
  • A method of tethering a mobile phone to a PC

Samsung shares dropped 2.6% Friday, representing roughly $3.6 billion in shareholder value, according to applepatent's Patrick Igoe. "I have to imagine," he wrote Friday, "there are people in Samsung's memory, SSD, display, and processor businesses who are not thrilled to see this escalate."

Also on Fortune.com:

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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