Two tech titans battling over patents

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Apple iPad and a Samsung Galaxy Tab 10.1 (right). Closely watched trial will decide the U.S. smartphone and tablet markets.

Apple Inc.'s $2.5 billion patent-infringement lawsuit against Samsung Electronics Co. began Monday in federal court in California with the selection of the first U.S. jury to consider the global smartphone dispute.

U.S. District Judge Lucy Koh in San Jose, who practiced as an intellectual-property litigator in Silicon Valley for eight years, is presiding over the trial. Jurors will decide each company's contentions that its rival infringed patents covering designs and technology for mobile devices, with potential damage awards reaching billions of dollars.

The case is the first U.S. jury trial of a battle being fought on four continents for dominance of a mobile-device market that Bloomberg Industries said was $312 billion last year. Apple, the iPhone-maker based in Cupertino, Calif., just 11 miles from the courthouse, won't benefit from any bias from a jury drawn from Silicon Valley, said Stanford Law School professor Mark Lemley.

"Just as many people in the valley work for Android companies like Google as work for Apple," Lemley said in an e-mail, referring to Google Inc.'s Android operating system that some Samsung products use. "I expect that a Silicon Valley jury will be more technologically sophisticated than most, and that may work in Samsung's favor."

Samsung, based in Suwon, South Korea, has countersued and will present allegations that Apple is infringing two patents covering mobile-technology standards and three utility patents. Samsung is demanding royalties of as much as 2.4 percent for each device sold, according to a court filing.

Samsung said in a court filing that it planned to show jurors evidence that in 2006, before Apple's January 2007 introduction of the iPhone, Samsung was developing the next generation of mobile phones, envisioning "a simple, rounded, rectangular body dominated by a display screen with a single physical button on the face."

Apple's $2.5 billion in damages is based on contentions that Samsung copied the iPhone and iPad. Apple also wants to make permanent a preliminary ban it won on U.S. sales of a Samsung tablet computer and to extend the ban to Samsung smartphones.

Apple is trying to deflect Samsung's infringement contentions in part by arguing that Samsung deceived the European Telecommunications Standards Institute, according to a court filing. Samsung was pushing the organization to adopt certain standards without disclosing that it had applied for patents covering the same technology, Apple contends.

In the second quarter of this year, consumers worldwide bought 406 million mobile phones compared with 401.8 million in the same period last year, according to IDC, a Framingham, Mass., information service covering consumer technology markets. Samsung and Apple shipped almost half of those phones, IDC said.

Samsung extended its lead over Apple during the second quarter, shipping 50.2 million mobile phones, representing 32.6 percent of the market, compared with 26 million units, or 16.9 percent of the market, for Apple, according to IDC.

Samsung chief executive Choi Gee Sung and Apple CEO Tim Cook tried and failed to settle the San Jose case at a court-ordered May 21 meeting in San Francisco. Previously, officials met in September, December, and May 4 to discuss a related dispute before the U.S. International Trade Commission.