Samsung, National Champion or Corporate Evil?

[논둑길맨발로]

September 4, 2012, 4:32 PM KST

Gallup Confirm‎s: This Is Samsung Country

Search Korea Real Time1

By Evan Ramstad

The data is in: South Korea is Samsung 005930.SE +4.52%country.

And South Koreans really dislike the U.S. jury decision on Aug. 24 that found Samsung Electronics Co. infringed Apple Inc AAPL +0.62%. patents and assessed $1 billion in damages.

Watercooler talk, newspaper editorials and Internet postings convinced us last week that South Koreans considered the verdict more than another turn in the long dispute between Apple and Samsung – it’s a slap in South Korea’s face by the United States.

Agence France-Presse/Getty Images

April 2012 file photo

On Monday, a Joong Ang Ilbo columnist wrote that the verdict was “no surprise” and is “the ‘American style’ of doing things when their interests are threatened. It is the yardstick Americans have stuck to in every economic and business battle. Anything that Americans are not tops at is evil and dangerous.”

Whew. We’ll put that down as an extreme expression‎ of the public sentiment. A survey released Monday by Gallup Korea at last anchored the mood with some hard data. The results are sure to please Samsung executives, as they show the vast majority of the 606 South Koreans who were polled have accepted the company’s spin on the outcome.

The questions and results:

Question 1: Recently, there was a verdict that Samsung lost in the U.S. that Samsung infringed Apple’s smartphone and tablet PC patents. Do you think this verdict was fair or unfair?

Fair 15%

Unfair 64%

No opinion 21%

Among the respondents, 245 said they owned a Samsung smartphone and, of those, 74% said the verdict was unfair. Fifty-four of the respondents said they owned an Apple smartphone and, of those, 50% said the verdict was unfair.

Question 2: A South Korean court decided that Samsung didn’t infringe a design patent that Apple claimed was infringed. Do you think this verdict was fair or unfair?

Fair 44%

Unfair 27%

No opinion 29%

Out of the 245 Samsung smartphone users, 57% said fair and 25% said unfair. Out of the 54 Apple smartphone users, 35% said fair and 52% said unfair.

Question 3: Samsung argues that, due to the U.S. verdict, customers will be harmed. Do you sympathize or not sympathize with this argument?

Sympathize 57%

Don’t sympathize 27%

No opinion 16%

Question 4: If you were to buy a new smartphone, which brand would you buy?

Samsung 57%

Apple 12%

LG 4%

Other 1%

No opinion 25%

Question 5: How much do you like Samsung Electronics?

Like 59%

Like/dislike evenly 24%

Don’t like 13%

No opinion 5%

Question 6: How much do you like Apple?

Like 24%

Like/dislike evenly 17%

Dislike 37%

No opinion 23%

http://blogs.wsj.com/korearealtime/2012/09/04/gallup-confirm‎s-this-is-samsung-country/

Gee, I guess Koreans really DO back Samsung

by Robert Koehler on September 5, 2012

in IT Korea

At the WSJ’s Korea Real Time, Evan Ramstad cites poll data that suggests Korea really is “Samsung country.”

Watercooler talk, newspaper editorials and Internet postings convinced us last week that South Koreans considered the verdict more than another turn in the long dispute between Apple and Samsung – it’s a slap in South Korea’s face by the United States.

On Monday, a Joong Ang Ilbo columnist wrote that the verdict was “no surprise” and is “the ‘American style’ of doing things when their interests are threatened. It is the yardstick Americans have stuck to in every economic and business battle. Anything that Americans are not tops at is evil and dangerous.”

Whew. We’ll put that down as an extreme expression‎ of the public sentiment. A survey released Monday by Gallup Korea at last anchored the mood with some hard data. The results are sure to please Samsung executives, as they show the vast majority of the 606 South Koreans who were polled have accepted the company’s spin on the outcome.

I have to say, I was a bit surprised the results were as lopsided as they were. Sure, Samsung might be seen by some as a national champion, but there are many who also see it as the epitome of corporate evil—and not without reason. Surely, I thought, there’d be plenty of left-minded Koreans who’d hold their nose and root for the Americans just to see them stick it to Samsung.

Clearly I was wrong.

Of course, this may have nothing to do with nationalism—it could be just that many Koreans recognize the potential harm the verdict has done to consumer choice and IT innovation. Right?

1 Veritas September 5, 2012 at 2:17 pm

Blaming nationalism and saying things like “the U.S. is Apple country” might make one feel better but it also seems to miss the big picture – it also forgets (or ignores) that while Smasung might have a complicated relationship with Korean citizens, so does Apple. There are plenty of people who loath Apple in the states, for one reason or another. That, and you have to remember that Google, also an American company, might have a lot to lose as a result of this verdict (although they were quick in their effort to distance themselves from it).

Labeling Apple as the the “evil American company” and chalking up everything to “American nationalism” is easy, simple, and quite frankly, also kind of dumb. Things aren’t that simple.

2 KWillets September 5, 2012 at 2:54 pm

Few non-Koreans believe that Apple has much to stand on: http://www.theverge.com/2012/8/24/3265909/apple-vs-samsung-you-be-the-jury-poll .

For most Americans, Apple is a quasi-foreign company that gets most of its profit from Asian-manufactured gadgets.

3 red sparrow September 5, 2012 at 3:13 pm

On Bloomberg news today (at least as I write this) the headline story is: Samsung Abuses Workers At Its China Plants, Labor Group Says

Two stories below and without a hint of irony it reads: Verdict Shows Samsung Needs to Copy Apple Culture

One might say that is exactly what Samsung is doing by abusing its Chinese workers.

4 silver surfer September 5, 2012 at 5:07 pm

Thank God Samsung didn’t invent the smartphone.

Otherwise we’d have to endure articles linking pinch-to-zoom with the uniquely Korean use of metal chopsticks.

5 Wedge September 5, 2012 at 7:11 pm

From the WSJ comments:

http://stat.ameba.jp/user_images/fc/41/10004485263.jpg

6 cm September 5, 2012 at 8:22 pm

There’s another similar patent case involving Dupont vs Kolon has been widely reported in Korea. Dupont was awarded with $920 billion dollars by an American court in Virginia. South Korean media has widely reported that the US is using patent cases and their courts to protect their market against encroaching Korean companies.

7 Jakgani September 5, 2012 at 8:25 pm

They obviously didn’t survey the die-hard apple-fan Koreans, who all walk around proudly with their latest apple gadgets.

8 Barreira September 5, 2012 at 10:35 pm

>>I have to say, I was a bit surprised the results were as lopsided as
>>they were. Sure, Samsung might be seen by some as a national
>>champion, but there are many who also see it as the epitome of
>>corporate evil

Didn’t FDR say, “yes he’s a bastard, but he’s our bastard”?

By the way, I think the US public comments about this case really show how deeply the “free market/competition” belief is ingrained in US culture – The comments on US side are very much divided, with many frank and pointed criticism of Apple – *even though* this is one successful company that Americans could be proud of, employs many many high paying workers in US (notwithstanding manuf. outsourcing – it’s “designed in California” , etc., going against a major foreign competitor that arguably benefits from many direct and indirect subsidies ….

…Maybe I haven’t seen the world enuff, but heck, I can’t think of too many countries where, under similar circumstances, the public would not automatically & sheepishly just line up behind its “home team”.

Anyway, the Koreans public will eventually come around and see Apple’s perspective, when Chinese “Samsungs” mercilessly rip off Samsung’s innovation, which is bound to happen in the near future, as Samsung moves up the innovation chain.

9 Barreira September 5, 2012 at 10:39 pm

…. except of course, that because China is such a big potential market for Korea, no Korean company will ever sue a major Chinese competitor, no matter how obvious the theft or grievous the harm….

10 R. Elgin September 5, 2012 at 11:11 pm

Per #9, this is partly why I think the “Trans-Pacific Partnership (TPP)” is being promoted, because the Koreans would not go after the Chinese for IP theft alone but as part of a treaty organization, there would be backing.
Though Singaporean Prime Minister Lee Hsien Loong asked Chinese leadership to consider joining, I would bet that they will not want to be a part of an organization they can not control.

11 Barreira September 6, 2012 at 12:20 am

Very interesting Elgin.

IMHO China’s top priority right now is staightforward – catch up on various key tech areas asap regardless of IP issues.

The standard pitch to US companies is that by transferring their IP (including manuf. know how) to PRC-companies/factories, they will get a slice of the China market, vast in wealth etc.

Not sure why US companies continue to believe that once their IP has been hollowed out, and there is nothing more for PRC to take, the Chinese govt. will allow them (i.e., foreign companies) to “get rich” off the Chinese consumers and companies.

… Ask the Taiwanese and Japanese investors who are being pushed out by the PRC competitors they helped to create…. Same thing with Korean factory owners who rushed to set factories in China (transferring capital and know how), and are now being squeezed out….

Joint venture with PRC partners is no safer – ask Yahoo.

The “valuable China market” is a brilliant piece of marketing (or a scam, if you wanna be rude) – in practical terms, that market is out of reach of foreign companies (Korean companies included). In the long run, and at best, a small select group of well connected foreign companies will be permitted to make “reasonable” profits. (This concept should be familiar to Koreans – ask ‘em about Lonestar. The Chinese can play this game too).

12 WangKon936 September 6, 2012 at 12:21 am

One thing I will say is that polls in Korea are capricious things. If Lee Kun-hee or Lee Jae-yong get caught in another scandal, those numbers will probably flee south.

13 Barreira September 6, 2012 at 1:27 am

>>… in Korea are capricious things.

Isn’t that what makes Korea interesting? Lots of changes overnight….

14 R. Elgin September 6, 2012 at 2:35 am

. . . The “valuable China market” is a brilliant piece of marketing (or a scam . . .

That depends on how you enter and for what purpose. I’ve met one Greek fellow who has made his fortune having industrial parts made up in the PRC, which he then sells elsewhere. I’ve met others who had real “caveat emptor” moments there when commissioning production work there and a few creative folk who have had a shave when they acquire a Chinese partner.

As for South Korea, doing business here is most times more about who you are connected to instead of “is the idea good” but then that leads back to the wretched state of entrepreneurship that exists in South Korea.

I’ve two great ideas and opportunities rejected purely because someone in Korean Government did not want to fund a project that had a foreigner in a prominent position on the project although the project was a definite plus for South Korea. They wanted to give the money to project of far lesser quality and people of lesser ability simply because it was lead by a someone that was of Korean blood.

I have had to pursue private funding, as a result and, considering situations as such, it will be more difficult for South Korea to really take advantage of creative ideas when government personnel are blinded by jingoism, mediocrity and a culture of bribery and connection. Instead, they will end up copying a foreign model, just like Samsung has done.

To blame a company, like Apple, for the problems that exist here in business and government is very dishonest and will gain no sympathy from me.

15 Barreira September 6, 2012 at 8:38 am

>>As for South Korea, doing business here is most times more about
>>who you are connected to instead of “is the idea good”…

Yup….

>>I’ve two great ideas and opportunities rejected purely because
>>someone in Korean Government …
>>…. wanted to give the money to project of far lesser quality and
>>people of lesser ability simply because it was lead by a someone that
>> was of Korean blood.

You could also replace “was of Korean blood” with:
(1) “went to the same school as Korean decision maker” or
(2) “is a relative/friend of Korean decision maker” or
(3) “went to room salon with Korean decision maker”?

One reason why capital allocation is better left to markets and not government bureaucrats…. VC’s are not any more ethical, but at least they are focused on return on capital…. Cheers Elgin.

16 cm September 6, 2012 at 12:32 pm

We know Samsung equals Korea, and nationalism goes with Samsung, no doubt about that considering 20 percent of Korea’s economy depends on Samsung. Without Samsung, the Korean economy will be bankrupt and there will be no jobs. There’s nothing to debate here on that regard.

But forget that for a minute. The more I read about this foreman of the jury in the trial, the more I’m convinced that the California decision was a mistrial with the jurors not doing their jobs properly.

http://www.groklaw.net/article.php?story=20120904190933195

For Apple’s sake, this foreman should stop blabbering all over the news. As per the court’s instructions, the jury should have questioned whether the Apple’s patents are valid. But the foreman directly said himself, they did not fulfill those instructions because he says it wasn’t their job.

Just on that alone, the appeals court really should strike this decision down. If it doesn’t, then the Korean media claims that the US is using the courts as an excuse to practice protectionism will all of a sudden doesn’t sound so far fetched after all.

17 Barreira September 6, 2012 at 1:20 pm

Cm#16,

>>The more I read about this foreman of the jury in the trial, the more
>>I’m convinced that the California decision was a mistrial with the
>>jurors not doing their jobs properly.

Jury verdicts are always messy. Like watching sausage being made.

But the foreman’s statement in the linked article, by itself, does not suggest error: Q: “Did you have the opportunity to ask ‘Is this something that should be patentable?’ during the trial?” A: “No, however it was not the function of this jury to ask that. We were bound to use the law as it is today. The patents were issued the judge instructed us not to second guess the current patent system.”

The foreman was right – the jury was asked *specific* questions about validity of *specific* patents, but was told not to “second guessing the current patent system.” No foul there.

Anyway, don’t worry, Quinn Emanuel (Samsung’s lawyers) are well known for its slash-and-burn tactics – if there was any juror error/misconduct, they will dig it up. That’s the beauty of the adversarial system….

By the way, I would not lose sleep over the Korean public opinion on the verdict – they would have claimed that “US is using the courts as an excuse to practice protectionism” no matter what….

Bear in mind that this was a jury trial in a case brought by Apple, a private party – How could “US” (meaning the US govt., I guess) be controlling this? Is the suggestion that the US Dept. of Commerce told the jurors how to vote? Again, this was a jury trial…. It’s one thing to claim jury bias, but something else to believe that this is part of a grand protectionist US policy move….

BTW, if any of you think the Judge in the case was biased or incompetent, Judge Lucy Koh is Korean-American, Harvard College + Harvard Law School graduate, former Assistant US Attorney for the Central District of Calif., young, tough, and no-nonsense. Basically, the model Korean American (if there is such thing)….

18 cm September 6, 2012 at 1:28 pm

#17,

There are no questions or doubts about the judge, it’s the foreman and the jury that needs to be answering further questions about how they reached this decision. Pay attention to Groklaw’s point which addresses your point:

“That is so wrong it’s not even just wrong. The verdict form [PDF] and the jury instructions [PDF] specifically asked them to address that very question.”

Verdict form here:
http://www.groklaw.net/pdf3/ApplevSamsung-1890.pdf

Jury instructions here:
http://www.groklaw.net/pdf3/ApplevSamsung-1903.pdf

19 cm September 6, 2012 at 1:34 pm

Barreira, you are so wrong, you should read the forms. It is the jury’s duty to decide on the validity of the patents claimed, the jury head has clearly said they did not see it as their duty. How could they miss this if they had gone through the forms carefully? If they did go over this carefully, then this decision was a deliberate decision to completely ignore the court instructions. If they did miss this by accident, then this is simply negligence of huge proportions. Either way, this is inexcusable, and the decision should struck down by the appeals court.

20 Barreira September 6, 2012 at 2:05 pm

Hi cm, maybe I missed it – you can educate me….

I don’t hear the foreman saying the jurors checked off a finding of validity (or no invalidity) without actually considering the issue.

What the foreman says in the linked article is this: Q: “Did you have the opportunity to ask ‘Is this something that should be patentable?’ during the trial?” A: “No, however it was not the function of this jury to ask that. We were bound to use the law as it is today. The patents were issued the judge instructed us not to second guess the current patent system.”

He seems to be saying that the jury was told to follow the jury instructions on what the current patent laws say (on patentability of certain features, etc.) and not to second guess it – just apply the current patent laws.

21 cm September 6, 2012 at 2:14 pm

Barreira, nobody can read his mind, what he was thinking. But he did not come back to the interview to explain himself further (if this was indeed a misunderstanding) after he was backed into a corner. That to me, speaks volumes.. that what you just explained.. was not the case.
I could be wrong though. But there are lot of people (non-Koreans) who are questioning the decision making after reading and listening to this foreman blabber on.

22 Barreira September 6, 2012 at 2:58 pm

As I said, its like watching sausages being made….
In practical terms, the threshould for overturning a jury verdict is like rent, too damn high.

23 tinyflowers September 6, 2012 at 5:33 pm

His answer is bullshit because the reason he gave for refusing to consider the validity of *specific* patents was that he was told not to second guess the patent system itself. These are two separate issues that he seems to have confused. He’s misappropriating the judge’s instruction not to “second guess the current patent system” and interpreting it as “don’t second guess these patents.”

24 Barreira September 7, 2012 at 6:24 am

#23,

The jury does not have to consider the validity of any issued patent – issued patents are *presumed valid* as a matter of law. It’s the infringer (Samsung) that has the burden of proving that the patents are *invalid*. (And the infringer’s burden of proof is *very* high – it has to show invalidity by “clear and convincing” evidence).

It is also correct that jurors cannot second guess the validity of an issued patent – one may not agree with Apple’s patents, or with the US patent system that allowed such patents to issue, etc. but it’s not your job as a juror to second guess an issued patent.

Nothing I saw in the articles, interviews, etc. indicates that the jury checked off the boxes (e.g., see verdict finding no. 11) that say Samsung failed to meet its burden to prove invalidity, without actually considering the evidence allegedly supporting invalidity presented by Samsung.

Of course, if I am missing something, let me know….

25 tinyflowers September 7, 2012 at 8:51 am

The jury does not have to consider the validity of any issued patent

Incorrect. Did you even read that groklaw article? The jury is specifically tasked with determining the validity of the patents in this trial. There is an entire section in the jury instructions that deals with this.

From page 44 of the jury instructions:
“A utility patent claim is invalid if the claimed invention is not new… If a patent claim is not new we say it is “anticipated” by a prior art reference.”

From page 46:
“Not all innovations are patentable. A utility patent claim is invalid if the claimed invention would have been obvious to a person of ordinary skill in the field at the time of invention.”

So when the jury foreman was asked “Did you have the opportunity to ask ‘Is this something that should be patentable?’ during the trial?” his answer “No, however it was not the function of this jury to ask that.” is completely at odds with what he was specifically instructed to do. I don’t know how you can get around that.

It is also correct that jurors cannot second guess the validity of an issued patent – one may not agree with Apple’s patents, or with the US patent system that allowed such patents to issue, etc. but it’s not your job as a juror to second guess an issued patent.

Incorrect. It is the court that determines the validity of a patent, not the USPTO. In this case the jury was specifically tasked with determining the validity of Apple’s patents.

26 Barreira September 7, 2012 at 11:47 am

#25,
In a patent infringement case, the plaintiff’s patent is presumed valid, but the infringer is allowed to attempt to invalidate it. The infringer has the burden of proof – i.e., the infringer has to affirmatively show that the patent invalid.

If you read the verdict form, you will notice that it does *not* ask anywhere whether Apple proved that its patents are *valid* – Apple does *not* have to do this; its patents are deemed to be valid. And the jury is not allowed to second guess those issued patents (even if individuals jurors personally believe that the patent system is screwed up, shouldn’t have allowed Apple to patent certain designs elements, etc etc)..

You will also notice that the same verdict form asks whether Samsung proved that the Apple patents are *invalid* by clear and convincing evidence. In this case, the jury checked the box that said Samsung failed to do this.

I know this may sound like sophistry (Plaintiff proving validity vs Defendant proving invalidity), but trust me, they are not the same thing, and the shifting of burden of proof to defendant/infringer makes a huge difference at trial.

If you understand this, the foreman’s statements in that particular interview do not by themselves indicate error. (I would more worried about some other statements that other jurors (?) allegedly made, about not considering or disregarding some (?) prior art).

27 Barreira September 7, 2012 at 11:53 am

Tinyflowers, listen, I am learning a lot about Korea from this blog, but it pains me when I read a lot of conclusory statements about this case, the patent system, and IP…. Trust me, I am not making this stuff up. Here’s something that may give more accurate guidance on this:

http://www.patentlyo.com/patent/2011/06/microsoft-v-i4i-supreme-court-affirms-strong-presumption-of-patent-validity.html

28 cm September 7, 2012 at 12:30 pm

Barreira, you must be reading something totally different from what all the other people are reading. Read the jury instructions for heaven’s sakes. Tinyflower even pasted the parts of it also.

And your link doesn’t prove anything. It is up to the jury to decide if the patents are valid or not. What your link says is that the jury did indeed deliberated on that question and came to the conclusion that the patents were valid. They addressed the questions and therefore they did their duty properly.

Now that’s totally different from what the jury did in the Apple-Samsung case. They went against their instructions and did not even bother to address the question whether the patents were valid. They just presumed valid because the jury’s foreman thought he knew the law better than anybody else and directed the group into not questioning the validity of the patents. Instead, they just checked all the squares as “YES” for boxes with the questions that ask are these patents valid without discussion, debate, analysis, logic, conclusion, fact checking, nothing.. then came back with a decision in less than a day. They are to examine all evidences and ponder them. Instead they took one email evidence and determined the entire case on that merit alone. This jury did a half assed job. Their verdict should be over turned. Certainly the amount of fine against Samsung is also a total joke.

29 Barreira September 7, 2012 at 12:39 pm

For the last time, the jury does not get to determine whether the patent is VALID – read the verdict form. There are NO questions whether the patent is valid.

They do get to find whether the patent is INVALID.

If you grasp this, and read the foreman’s statements under this light, you will notice that his statements by themselves do NOT prove jury error.

30 Barreira September 7, 2012 at 12:40 pm

>>And your link doesn’t prove anything
Yes, what does the US Supreme Court knows about patent law…. Sigh…..

31 cm September 7, 2012 at 12:50 pm

#30,
I meant that link you posted, doesn’t prove your stance.

“They do get to find whether the patent is INVALID. ”

So what are we arguing about? It’s the same thing. What’s clear is according to the juror’s foreman, they did not deliberate on this question. Velvin Hogan, who was so eager to answer all the questions from the start, did not come back to the interview , and after he was undressed and humiliated.

32 tinyflowers September 7, 2012 at 10:46 pm

Barreira, I don’t disagree with you that the defendant has the burdon of proof on patent validity. Although you keep hammering that point home for some reason, you will see that I never actually argued that point.

But you seem to be completely ignoring what Velvin Hogan has said here. It’s kind of hard for a defendant to attempt to prove patent invalidity when the jury foreman thinks that it’s “not the function of this jury to ask that.”

http://www.rjkoehler.com/2012/09/05/gee-i-guess-koreans-really-do-back-samsung/#comments