Saturday, September 22, 2012

Apple seeks U.S. Samsung sales ban, $707 mln more in damages

Apple Inc has asked for a court order for a permanent U.S. sales ban on Samsung Electronics products alleged to have violated its patents along with additional damages of $707 million on top of the billion-dollar verdict won by the iPhone maker last month.

Samsung has responded by asking for a new trial.

The world's top two smartphone makers are locked in patent battles in 10 countries as they vie for top spot in the lucrative, fast-growing market.

Apple (AAPL.O) scored a legal victory over Samsung (005930.KS) in late August when a U.S. jury found that the Korean firm had copied critical features of the iPhone and awarded the U.S. firm $1.05 billion in damages.

In a motion filed late Friday U.S. time, Apple sought a further $400 million damage award for design infringement by Samsung; $135 million for willful infringement of its utility patents; $121 million in supplemental damages based on Samsung's product sales not covered in the jury's deliberation; and $50 million of prejudgment interest on damages

 through December 31. The requests together come to $707 million.
Apple wants the injunction to cover "any of the infringing products or any other product with a feature or features not more than colorably different from any of the infringing feature or features in any of the Infringing Products."

Such a wide-ranging sales ban could result in the extension of the injunction to cover Samsung's brand-new Galaxy S III smartphone.


Samsung, in a filing to the U.S. court, asked for a new trial to be held.

"The Court's constraints on trial time, witnesses and exhibits were unprecedented for a patent case of this complexity and magnitude, and prevented Samsung from presenting a full and fair case in response to Apple's many claims," Samsung said.

"Samsung therefore respectfully requests that the Court grant a new trial enabling adequate time and even-handed treatment of the parties."

In a separate statement, Samsung lamented the fact that patent rulings should cover issues such as the shape of the product in addition to technological points.

"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," it said.
The Korean firm earlier this week said it plans to add Apple's new iPhone 5 to the existing U.S. patent lawsuits, stepping up its legal challenge as the two companies seek to assert rights to key technologies.
Apple said it wanted the court to award it damages that reflect "a rational and fair effort to address Samsung's willful misconduct that has and will impose lasting harm on Apple."

The Korean firm was the world's top smartphone maker in the second quarter of this year, shipping more than 50 million phones, nearly double Apple's 26 million iPhone shipments.

Both companies are raising their marketing spending to promote their latest products ahead of the year-end shopping season.

Facebook Can ID Faces, but Using Them Grows Tricky

SAN FRANCISCO — Facebook on Friday confronted a new obstacle over what to do with one of its most vital assets — pictures.
Julian Stratenschulte/European Pressphoto Agency
Facebook is under pressure from Wall Street to profit from its vast trove of pictures, and also from regulators over the use of personal information.

The company promised European regulators that it would forgo using facial recognition software and delete the data used to identify Facebook users by their pictures.

The decision could have wide repercussions on how facial recognition technology — a particularly sensitive technological advance — is used globally as surveillance cameras are increasingly installed in public spaces.

 “This is a big deal,” said Chris Hoofnagle, a law professor at the University of California, Berkeley who specializes in online privacy.

 “The development of these tools in the private sector directly affects civil liberties,” he explained. “The ultimate application is going to be — can we apply these patterns in video surveillance to automatically identify people for security purposes and maybe for marketing purposes as well?”

The agreement comes as Facebook is under pressure from Wall Street to profit from its vast trove of data, including pictures, and also from regulators worldwide over the use of personal information.

 The decision in Europe applies to the “tag suggestion,” a Facebook feature that deploys a sophisticated facial recognition tool to automatically match pictures with names. When a Facebook user uploads a photo of friends, the “tag suggestion” feature can automatically pull up the names of the individuals in the image.

The facial recognition software was developed by an Israeli company,, which Facebook acquired for an undisclosed price in June.

 The company quietly and temporarily pulled the plug on “tag suggestion” for all Facebook users several months ago. The company said on Friday it was to “make improvements to the tool’s efficiency” and did not say how soon it would be restored. However, the company promised European regulators on Friday that it would reinstate the feature on the Continent only after getting their approval.

 Facebook declined to say under what circumstances the “tag suggestions” would be back online in the United States or elsewhere.

Facebook’s promise to the European regulators is part of an investigation into whether the company’s data collection practices comply with European privacy rules. It was made with regulators in Ireland, where the company has its European headquarters.

 “We will continue to work together to ensure we remain compliant with European data protection law,” Facebook said in a statement.

 Europe is an important market for the company, as it struggles to prove its worth on Wall Street. About one in four Facebook users logs in from Europe. According to the company’s earnings figures, Europe accounts for just under a third of its advertising revenue.

Pictures have always been vital to Facebook. Pictures are what drew users to Facebook in its earliest days, and pictures are what continue to keep people coming back. Facebook users upload 300 million images a day. The company’s acquisition of Instagram, the photo-sharing site, eliminated its biggest rival in this area.

 Photo tagging is important for Facebook in the sense that it allows the social network to better analyze with whom its users interact in the real world.

 In addition to scrutiny from European regulators, Facebook has also come under fire from consumer protection groups and lawmakers in the United States over its use of facial recognition technology. At a hearing on Capitol Hill last July, Senator Al Franken, Democrat of Minnesota, described Facebook as the “world’s largest privately held database of face prints — without the explicit consent of its users.”

On Friday, Mr. Franken said in an e-mail statement that he hoped Facebook would offer a way for American users to opt in to its photographic database.

“I believe that we have a fundamental right to privacy, and that means people should have the ability to choose whether or not they’ll be enrolled in a commercial facial recognition database,” he said. “I encourage Facebook to provide the same privacy protections to its American users as it does its foreign ones.”

 The Electronic Privacy Information Center, an advocacy group in Washington, filed a complaint with the Federal Trade Commission over Facebook’s use of automatic tagging. The complaint is pending. The commission has a consent order with Facebook that subjects the company to audits over its privacy policies for the next 20 years.

 Personal data is Facebook’s crown jewel, but how to use it artfully and profitably is arguably its biggest challenge. Facebook has access to a tremendous amount of information about its one billion users, including the photos they upload every day. Marketers have pushed for greater access to that data, so as to tailor the right message to the right customer. Consumers and lawmakers have resisted, to different degrees in different countries around the world.

 “They are pushing the edges of what privacy rules may allow, just as an aggressive driver might with parking rules,” said Brian Wieser, an analyst with the Pivotal Research Group, a research firm in New York. “You don’t know you’ve broken a law until someone says you’ve broken a law.”

Several independent application developers are experimenting with how to use facial recognition technology in the real world, and have sought to use pictures on Facebook to build products of their own. 

For example, one company in Atlanta is developing an application to allow Facebook users to be identified by cameras installed in stores and restaurants. The company, Redpepper, said in a blog post that users would have to authorize the application to pull their most recent tagged photographs. The company said its “custom-developed cameras then simply use this existing data to identify you in the real world,” including by offering special discounts and deals.

IPhone 5 defines Apple success, Tim Cook-style

(Reuters) - Tim Cook is no Steve Jobs when it comes to leading Apple Inc. As the debut of the new iPhone 5 just proved, that may not be a bad thing.

The taller, thinner and lighter phone prompted a rush on Wall Street to raise price targets for Apple stock, but the optimism was not because of a big technological advance or design breakthrough; the "wow" factor that was the trademark of the late Apple co-founder Jobs was decidedly absent.

Rather, it was the speed of the global launch that astounded, validating the new CEO's much-touted wizardry at the essential but unglamorous task of managing a supply chain.

"We are positively surprised regarding the pace of the rollout, since we had expected a bigger impact from component constraints," Barclays analyst Ben Reitzes said.

By next Friday, the iPhone 5 will be in 31 countries, and will be in 100 by the end of the calendar year. That would be 30 more than the rollout of the predecessor phone, the 4S, over a similar period, Jeffries analyst Peter Misek calculated.

That means Apple has worked out supply constraints and inked deals now with 240 carriers. It will get enough phones out the door in the next 10 days to have a material effect on earnings.

"His skills fit the time period and the flow of product," said Raymond Miles, professor emeritus at Haas School of Business, University of California, Berkeley, adding that Apple may be at a stage where it needs "someone with a production vision."

The iPhone launch offers some other, subtler indications of how Apple is changing under Cook. In public events, Jobs stood out in his black turtleneck, and performed carefully crafted one-man stage shows. At the press event for the iPhone 5, Cook blended into a pack of executives all sporting a uniform of jeans and untucked casual dress shirt.

Indeed, one might say that practical, low-flash, but high-impact actions are emerging as the Cook trademark. He has introduced a dividend to pay out part of the more than $100 billion cash stockpile, raised salaries for a rabidly loyal but low-paid workforce in the Apple stories, and sped up product rollouts.

Under Cook, more Wall Street analysts have been invited to headquarters to talk to executives, particularly Chief Financial Officer Peter Oppenheimer and head of Internet services Eddy Cue. Cook himself addressed investors at a Goldman Sachs conference, a rarity for Apple executives, and initiated investigations into allegations of labor abuse in its supply chain.


Insiders say he is a refreshing presence after the prickly Jobs, who was admired but feared. Cook is also known for his ability to track vast amount of data and zero in on a critical parameter.

One person familiar with the CEO notes that under Cook, the company has continued to rapidly increase its revenue, retain all the senior executives, maintain its product rollout schedule and avoid huge blunders.

On the flip side, the imbroglio over the sub-par mapping software in the iPhone 5 suggests that Jobs' obsessive perfectionism and attention to user experience is already being missed.

Apple Maps, which offers soaring 'flyover' views of major cities, has displaced Google Maps on the new iPhone software. But the new program has no public transit directions, limited traffic information, and flat-out mistakes, such as putting one city in the middle of the ocean.

"Apple made this maps change despite its shortcomings because they put their own priorities for corporate strategy ahead of user experience," said Anil Dash, a widely followed technology pundit, reflecting widespread annoyance and consternation.

Jobs would have put the whole company to work on the problem, as each negative review of the widely used feature would have irked him, said the person familiar with Apple's inner workings. The issue facing Cook now is how fast he reacts to the Maps problem and how quickly it gets fixed, the person said.

Jobs himself allowed email synchronization software MobileMe to launch in 2008, to deadly reviews. Fortune magazine reported Jobs telling the entire development group, "You should hate each other for having let each other down" and immediately replaced the group's head.

"No CEO, not even Steve Jobs, would be able to catch all the problems in every new feature of a new complicated product, like the iPhone 5," said Harvard Business School professor David Yoffie. "The big question is how will Tim respond now?"

More broadly, there is also the question of whether Apple under Cook can produce products that are revolutionary rather than evolutionary. His products thus far - the iPhone, the new iPod line and an expected iPad mini - represent improvements, rather than game changers.

In the meantime, Cook is topping Jobs' sales record: IPhone 5 preorders hit 2 million in 24 hours, twice the level of the 4S, and analysts expect a smaller iPad mini in October.

Investors do not seem to need much more convincing about Cook's ability to captain the ship: the average price target for Apple stock is now $763, up 6 percent from a month ago, thanks to analysts raising targets in the wake of the "wow-less" launch event.