Apple Loses Ground Against Samsung
Apple (NASDAQ:AAPL) may have reached an obstruction in its ongoing courtroom battles with Samsung (SSNLF.PK); the U.S. Patent and Trademark Office ruled the company’s “pinch-to-zoom” patent, the very same patent that Apple built its Samsung case around, was invalid.
What prompted this ruling?
In August, a jury determined that the six patents in question, including the “pinch to zoom” patent, were valid and found that Samsung had “willfully” infringed on many of them. As a result, the Korean electronics manufacturer was fined $1.05 billion.
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However, according to a court document filed by Samsung in a San Jose Federal District Court on Wednesday, the office rejected that patent because earlier patents covered the same invention. However, the agency’s decision is only preliminary. Apple can challenge the ruling as it did when the patent office struck down another of it’s “touchscreen heuristics” patents in October.
While the patent, No. 7,844,915, covers the technology that enables a smartphone or tablet screen to distinguish between single-touch and multi-touch gestures, the software is much narrower in scope than its name would imply. It is referred to as the “pinch-to-zoom” patent because the software allows Apple device users to magnify text with a pinch-like motion, but as The New York Times noted on Wednesday, “Apple’s legal documents refer to it as controlling a ‘scroll versus gesture’ feature.”
CHEAT SHEET Analysis: Is this ruling a negative catalyst for Apple’s stock?
One of the core components of our CHEAT SHEET Investing Framework focuses on catalysts that will move a company’s stock. In this case, the patent office’s decision has set back Apple’s campaign against Samsung by opening up the possibility of a new trial. As The Wall Street Journal reported, Samsung said in its court filing that the developments supported its request for a new trial. After all, the billion-dollar penalty was imposed after the jury found that the company had violated the “pinch to zoom” patent.
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