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Samsung’s forthcoming injunction (ban on products) will hurt more than the $1 billion fine [Apple vs Samsung, Opinion]


Yesterday Samsung lost in court against Apple [2]. As a result, Samsung was ordered to pay US$1,049,393,540 to Apple. Some people may feel the roughly $1.05 billion fine is Samsung’s punishment for ‘copying’ Apple, and it is true — the fine, which is no small sum, is Samsung’s punishment. However, it is the equivalent of a slap on the wrist for a company that rakes in billions in profits every year. The real consequence of the Apple v Samsung [3] verdict is yet to come: an injunction on Samsung products in the United States.

As expected, a hearing for the ban on the sale of Samsung products (an injunction hearing) is set for September 20, 2012. At that hearing, Samsung [4] and Apple [5]lawyers will argue why or why not to place an injunction on Samsung products that were found to infringe on Apple IP. Despite Samsung hoping otherwise, Apple will more likely than not be granted an injunction against most, if not all, of the Samsung products that were found guilty by the jury. If you think $1.05 billion is a huge loss for Samsung, just imagine the loss of revenue that will result as a ban on sale of roughly 20 Samsung products in the United States.

Aside from loss of revenue, Samsung will take a hit to its brand value, see its marketshare decline, and hurt the relationship it has with carriers who now have to pull Samsung products off their shelves.

Granted, the Samsung products that were put on trial are older models. Samsung has released other devices after the trial began (e.g. Galaxy S III [6], Galaxy Tab 10.1 2, Galaxy Note [7], Galaxy Note 10.1, etc.), and those devices, which are the biggest money makers in Samsung’s current portfolio, were not part of the trial and hence can’t be part of the injunction hearing set for September 20, 2012 (unless Apple tries to pull a fast one over Samsung). So we can’t really say conclusively exactly how much Samsung will suffer by having its older models banned from market. We can say, however, that Samsung will suffer.

Another potential ramification is Apple will now go after Samsung’s newer models. Wait a second; you must be thinking didn’t he just say Apple can’t go after Samsung’s newer models that were released after trial? Yes, I did just say that. However, take note that I said Apple cannot go after the newer models as part of the injunction hearing set for September 20. Apple can still use its courtroom victory, and impending injunction, as a springboard to try to score quick bans on Samsung’s hot selling Galaxy S III, Galaxy Note, etc. Of course the question of how successful Apple will be in going after Samsung’s other products is still a toss up but if Apple is indeed successful, those bans may be, as they say, the straw that breaks the camel’s back.