8/24. A trial jury of the U.S. District Court (NDCal) returned its verdict in Apple v. Samsung, on Friday evening, August 24. The jury found that Samsung infringed six of Apple's patents, and awarded just over $1 Billion in damages. See, Amended Verdict Form [20 pages in PDF].

This is the patent infringement (and related claims) case involving technology used by Apple in its smartphones and tablets. The defendants are several Samsung companies, which make competing products that use the Android operating system for mobile devices.

However, Apple's suit is also directed at limiting competition to the Apple iPhone and iPad from all competing Android based devices. Hence, this verdict is a victory for Apple and its shareholders, and a defeat not only for Samsung and its shareholders, but also for other Android based device makers, and Google, the developer of Android.

Apple alleged in its complaint, the original of which it filed on April 15, 2011, that numerous Samsung mobile phones and computer tablets infringe patents, trade dress, and trademarks related to Apple's iPhone and iPad. See, story titled "Apple Files Patent Infringement Complaint Against Samsung" in TLJ Daily E-Mail Alert No. 2,222, April 18, 2011. Samsung counterclaimed for patent infringement.

The jury found valid all seven of the patents that Apple alleged Samsung infringed. The jury found that some or all of the 28 Samsung devices at issue infringed six of the seven patents in suit. The jury awarded a total of $1,049,343,540 in damages to Apple. The jury also found willful infringement as to five patents.

The jury found that Apple did not infringe any of the Samsung patents in suit.

The jury found for Apple, in a more limited way, on Apple's trade dress dilution and trade dress infringement claims.

The jury issued no verdict regarding injunctive relief. In cases in which a jury has been demanded, the jury renders a verdict on factual issues involving legal rights and remedies (which include damages for patent infringement). The court (in this case Judge Lucy Koh) tries factual issues involving equitable rights and remedies (which include injunctive relief). See also, 35 U.S.C. § 283.

Hence, following the jury verdict, Apple filed a motion for injunctive relief, which the court has not yet decided.

Also, while the jury found willful infringement, 35 U.S.C. § 284 provides in part that "the court may increase the damages up to three times the amount found or assessed". And, Judge Koh has not yet ruled regarding awarding up to treble damages for willful infringement.

Apple stated in a release that "We are grateful to the jury for their service and for investing the time to listen to our story and we were thrilled to be able to finally tell it. The mountain of evidence presented during the trail showed that Samsung's copying went far deeper than even we knew. The lawsuits between Apple and Samsung were about much more than patents or money. They were about values. At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy. We applaud the court for finding Samsung's behavior willful and for sending a loud and clear message that stealing isn't right."

Samsung stated in a release that "Today's verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices. It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies. Consumers have the right to choices, and they know what they are buying when they purchase Samsung products. This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple's claims. Samsung will continue to innovate and offer choices for the consumer."

This case is Apple, Inc. v. Samsung Electronics Co., Ltd., et al., U.S. District Court for the Northern District of California, D.C. No. CV-11-1846-LHK, Judge Lucy Koh presiding. Apple is represented in this action by the law firm of Morrison & Foerster. Samsung is represented by the law firm of Quinn Emanuel.

8/22. The Department of Justice's (DOJ) Antitrust Division filed with the U.S. District Court (SDNY) its reply memorandum [PDF] in support of its motion for entry of final judgment in the e-books antitrust case against Apple and five e-book publishers. The DOJ and three publishers settled. Apple does not want the District Court to approve the proposed final judgment (PFJ) that implements that settlement.

The DOJ wrote that "A recurring theme in the various oppositions to entry of the consent decree is that the government fails to understand that the sale of e-books is unlike other businesses, and that the application here of long-settled prohibitions against price-fixing risks ruin for the industry. While e-books are a relatively new arrival on the publishing scene, a plea for special treatment under the antitrust laws is an old standby. Railroads, publishers, lawyers, construction engineers, health care providers, and oil companies are just some of the voices that have raised cries against ``ruinous competition´´ over the decades. Time and time again the courts have rejected the invitation to exempt particular businesses from the reach of the Sherman Act."

The DOJ initiated this action on April 11, 2012. Simultaneously, three publisher defendants (Hachette, Harper Collins, and Simon & Schuster) settled with the DOJ. See, complaint [36 pages in PDF] and proposed final judgment (PFJ). See also, stories titled "DOJ Sues Apple and Book Publishers Alleging E-Book Price Collusion" and "Analysis of DOJ's Sherman Act Claim Against Apple and E-Book Publishers", and related stories in TLJ Daily E-Mail Alert No. 2,368, April 11, 2012.

Apple and two publisher defendants (Penguin and Holtzbrink, which includes Macmillan) continue to contest the allegations. Some best selling authors and brick and mortar stores are working in alliance with the contesting defendants to, among other things, generate public comments in opposition to the PFJ.

See also, story titled "Scott Turow Criticizes DOJ E-Books Action" in TLJ Daily E-Mail Alert No. 2,371, April 14, 2012.

As required by the Tunney Act, 15 U.S.C. § 16, the DOJ solicited public comments on the PFJ.

On July 23, 2012, the DOJ filed with the District Court the comments that it received in response to its this notice. See, DOJ web page with hyperlinks to comments. The DOJ also filed with the District Court its response [66 pages in PDF].

Apple submitted a blunt and angry comment [9 pages in PDF] in opposition to the settlement. Apple is not a party to the settlement, and is not bound by its terms. However, the PFJ requires that the settling defendants, among other things, terminate certain contracts with Apple.

Apple wrote that "the Government has intervened in a rapidly growing and evolving market about which it appears to understand very little. Indeed, the Government's actions to date reflect a fundamental misunderstanding of eBook competition, Apple's role in the market, and the potential impact of this Proposed Judgment."

Barnes & Noble, a book retailer, and not a party to the case, submitted a comment [27 pages in PDF] in opposition to the proposed settlement. It argues that the PFJ would harm brick and mortar book stores.

The Consumer Federation of America (CFA) submitted a comment [25 pages in PDF] defending the PFJ. It wrote that "The self-interested claims of brick-and-mortar retailers and celebrity authors who profit from price fixing at the expense of consumers must not mislead the court into thinking that (1) the public interest lies in anything short of restoring full price competition to the book publishing marketplace or (2) that the harm to competition inflicted by the agency cartel price-fixing for digital distribution of books at a critical moment in the nascent development of new digital business models can be repaired without a significant period of close oversight and scrutiny."

The DOJ filed a motion for final judgment, and memorandum in support [7 pages in PDF], on August 3, 2012.

Apple filed an opposition on August 15. It argues that it has not yet settled, but the PFJ would penalize it, by terminating the contracts between the settling defendants and Apple.

The Authors Guild filed an opposition [5 pages in PDF] on August 15.

Holtzbrinck/MacMillan filed an opposition on August 15, while Penguin filed its "observations" on August 15. Both filings are published online here.

Penguin wrote that "The Emperor has no clothes."

Joe Wayland (at right, with clothes) is the acting Assistant Attorney General in charge of the DOJ's Antitrust Division.

He signed the complaint, which alleges that "Apple and Publisher Defendants reached an agreement whereby retail price competition would cease (which all the conspirators desired), retail e-book prices would increase significantly (which the Publisher Defendants desired), and Apple would be guaranteed a 30 percent ``commission´´ on each e-book it sold (which Apple desired)." (Parentheses in original.)

Apple and the publishers "jointly agreed to alter the business model governing the relationship between publishers and retailers. Prior to the conspiracy, both print books and e-books were sold under the longstanding ``wholesale model.´´ Under this model, publishers sold books to retailers, and retailers, as the owners of the books, had the freedom to establish retail prices. Defendants were determined to end the robust retail price competition in e-books that prevailed, to the benefit of consumers, under the wholesale model. They therefore agreed jointly to replace the wholesale model for selling e-books with an ``agency model.´´ Under the agency model, publishers would take control of retail pricing by appointing retailers as ``agents´´ who would have no power to alter the retail prices set by the publishers. As a result, the publishers could end price competition among retailers and raise the prices consumers pay for e-books through the adoption of identical pricing tiers. This change in business model would not have occurred without the conspiracy among the Defendants."

The complaint alleges that "Apple facilitated the Publisher Defendants' collective effort to end retail price competition by coordinating their transition to an agency model across all retailers."

The complaint explains that "Over three days in January 2010, each Publisher Defendant entered into a functionally identical agency contract with Apple that would go into effect simultaneously in April 2010 ..."

Moreover, these contracts with Apple also provided that "the Publisher Defendants would raise retail e-book prices at all other e-book outlets, too", so that "electronic versions of bestsellers and newly released titles would be priced according to a set of price tiers contained in each of the Apple Agency Agreements ..."

Then, after executing the Apple agency contracts, these publishers "acted to complete the scheme by imposing agency agreements on all their other retailers", who thereby "lost their ability to compete on price".

The effect, the complaint alleges, was to raise prices that consumers pay. Previously, the most popular e-books were sold for $9.99. After the defendants implemented their scheme, these same e-books sold for $12.99 or $14.99.

Penguin argued that "The Government has made and critically relied upon the naked assertion that the advent of the agency method of selling eBooks ... resulted in a steep increase in overall eBook prices, ... and its prohibition is necessary to reduce prices and allow competition to re-emerge ... Yet the Government has offered no empirical proof to clothe this claim."

"It is too complicated for purposes of this short submission to in any substantive way get into all of what the data show about pre- and post-agency eBook prices."

But, Penquin continued, "what is absolutely clear from that data is that the price of new release Penguin eBooks did not unvaryingly move from $9.99 to $12.99 post-agency. And, ... many of these eBook prices would have been less under the agency model."

The DOJ responded in its August 22 reply that Penguin used data that predated culmination of the conspiracy. The DOJ wrote that "straightforward analysis of Penguin's prices before and after conspiracy culmination reveals that Penguin did indeed raise its prices as soon as it gained the power to do so. In four weeks spanning the time when Penguin took retail pricing power from Amazon, the average price for a Penguin e-book sold through Amazon increased 17 percent, and the average price for a Penguin ``new release´´ e-book sold through Amazon increased 21 percent."

This case is U.S. v. Apple, et al., U.S. District Court for the Southern District of New York, D.C. No. 1:12-cv-02826-UA.

TLJ experienced some e-mail delivery problems with TLJ Daily E-Mail Alert No. 2,436, August 24, 2012. Hence, that issue is now in the TLJ web site.

Day one of four of the Republican National Convention.

Deadline to submit comments to the Office of the U.S. Trade Representative (OUSTR) regarding the complaints filed with the World Trade Organization (WTO) by the US, Japan and EU against the People's Republic of China (PRC) regarding its rare earth materials export policies. See, notice in the Federal Register, Vol. 77, No. 146, Monday, July 30, 2012, at Pages 44706-44707.

Day two of four of the Republican National Convention.

Day three of four of the Republican National Convention.

9:30 AM - 1:00 PM. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) will hold one in a series of meetings regarding consumer data privacy in the context of mobile applications. See, notice in the Federal Register, Vol. 77, No. 149, Thursday, August 2, 2012, Pages 46067-46068. Location: Auditorium, DOC, Hoover Building, 14th Street and Constitution Ave., NW.

12:00 NOON. The World Wide Web Consortium's (W3C) Tracking Protection Working Group will meet by teleconference. The call in number is 1-617-761-6200. The passcode is TRACK (87225).

2:00 - 4:00 PM. The Small Business Administration (SBA) will host a webcast program on the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Program (STTR) reauthorization act. See, notice in the Federal Register, Vol. 77, No. 151, Monday, August 6, 2012, at Page 46909.

Day four of four of the Republican National Convention.

6:00 - 9:15 PM. The DC Bar Association will host a presentation titled "Can They Fire Me For Putting That on Facebook?". The speakers will be Diane Seltzer (Seltzer Law Firm), Julienne Bramesco (Clearspire Law Co.), and Lily Garcia (Clearspire Law Co.). The price to attend ranges from $89 to $129. Reporters are barred from attending most DC Bar events. CLE credits. See, notice. For more information, call 202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.

Deadline to submit post meeting comments to the President's National Security Telecommunications Advisory Committee (NSTAC) regarding its August 16 meeting. The agenda includes discussions of (1) the Nationwide Public Safety Broadband Network (NPSBN), (2) the DHS's National Cybersecurity and Communications Integration Center (NCCIC), and (3) the proposal to develop a separate out of band data network supporting communications among carriers, ISPs, vendors, and additional critical infrastructure owners and operators during a severe cyber incident that renders the internet unusable. See, notice in the Federal Register, Vol. 77, No. 146, Monday, July 30, 2012, at Pages 44641-44642.

Deadline to submit requests to the U.S. International Trade Commission (USITC) to testify at its September 12 hearing on the probable economic effect of providing duty free treatment for imports under the U.S.-Trans-Pacific Partnership Free Trade Agreement. See, notice in the Federal Register, Vol. 77, No. 155, August 10, 2012, at Pages 47880-47882.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-94 Rev. 1 [111 pages in PDF] titled "Guide to Intrusion Detection and Prevention Systems (IDPS)".

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-83 Rev. 1 [45 pages in PDF] titled "Guide to Malware Incident Prevention and Handling for Desktops and Laptops".

Deadline to briefs and statements to the U.S. International Trade Commission (USITC) in advance of its September 12 hearing on the probable economic effect of providing duty free treatment for imports under the U.S.-Trans-Pacific Partnership Free Trade Agreement. See, notice in the Federal Register, Vol. 77, No. 155, August 10, 2012, at Pages 47880-47882.

EXTENDED TO OCTOBER 31. Deadline to submit applications to the U.S. Patent and Trademark Office (USPTO) under its Humanitarian Awards Pilot Program. See, original notice in the Federal Register, Vol. 77, No. 26, February 8, 2012, at Pages 6544-6548. See also, extension notice in the Federal Register, Vol. 77, No. 160, August 17, 2012, at Pages 49782-49783.

Labor Day. This is a federal holiday. See, OPM list of 2012 federal holidays.

8/25. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) released more details about its meeting on August 27 regarding consumer data privacy in the context of mobile applications. See, original notice in the Federal Register, Vol. 77, No. 149, Thursday, August 2, 2012, Pages 46067-46068. This event will be at 9:30 AM to 1:00 PM in the DOC Auditorium, Hoover Building, 14th Street and Constitution Ave., NW.

8/24. The Executive Office of the President's (EOP) Office of Management and Budget (OMB) issued a memorandum to the heads of executive departments and agencies regarding government records. This memorandum contains much of the usual pretenses about transparency and accountability. Much of this memorandum pertains to government e-mail. For example, it states that "Federal agencies will manage all permanent electronic records in an electronic format" and "manage both permanent and temporary email records in an accessible electronic format". Its release follows letters from House Commerce Committee (HCC) Republicans to Obama aides on August 8 regarding use of personal e-mail accounts for official business. See, letter and letter.

8/23. The Copyright Office (CO) published a notice in the Federal Register (FR) that requests comments regarding adjudicating small copyright claims. The deadline to submit comments is September 26, 2012. The CO will hold two hearings, in New York City on November 15-16, and in Los Angeles on November 26-27. See, FR, Vol. 77, No. 164, August 23, 2012, at Pages 51068-51071.

8/23. Verizon announced that it will enable campaign contributions via text messaging. "Starting today, Verizon Wireless will put into operation a new program, recently authorized by the Federal Election Commission (FEC), which will enable Verizon customers to use text messaging to contribute to the campaign committees of the presidential campaigns of the two major political parties. Verizon Wireless intends to implement this new program carefully and in full compliance with the FEC's recent direction. The program is currently being limited to the two presidential campaigns in order to assess the service." See, release.

8/23. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register (FR) that sets the deadline of October 22 for submitting comments regarding the proposed final judgment in US v. Verizon, D.C. No. Case 1:12-cv-01354. See, FR, Vol. 77, No. 164, August 23, 2012, at Pages 51048-51064. See also, story titled "DOJ Approves Verizon Cable Deals" in TLJ Daily E-Mail Alert No. 2,429, August 15, 2012.

8/21. The House Commerce Committee (HCC) announced in a release that its Subcommittee on Communications and Technology will hold a hearing sometime in September regarding how to free more federal spectrum for commercial use.

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