Samsung’s record of IP theft, other ruthless business tactics, and why Apple might win the battles but still lose the war

“On August 4, 2010, amid the bustle of downtown Seoul, a small group of executives from Apple Inc. pushed through the revolving door into a blue-tinted, 44-story glass tower, ready to fire the first shot in what would become one of the bloodiest corporate wars in history,” Kurt Eichenwald writes for Vanity Fair. “The showdown had been brewing since spring, when Samsung launched the Galaxy S, a new entry into the smartphone market. Apple had snagged one early overseas and gave it to the iPhone team at its Cupertino, California, headquarters. The designers studied it with growing disbelief. The Galaxy S, they thought, was pure piracy. The overall appearance of the phone, the screen, the icons, even the box looked the same as the iPhone’s. Patented features such as “rubber-banding,” in which a screen image bounces slightly when a user tries to scroll past the bottom, were identical. Same with “pinch to zoom,” which allows users to manipulate image size by pinching the thumb and forefinger together on the screen. And on and on.”

“Steve Jobs, Apple’s mercurial chief executive, was furious. His teams had toiled for years creating a breakthrough phone, and now, Jobs fumed, a competitor—an Apple supplier no less!—had stolen the design and many features. Jobs and Tim Cook, his chief operating officer, had spoken with Samsung president Jay Y. Lee in July to express their concern about the similarities of the two phones but received no satisfactory response,” Eichenwald writes. “”

“After weeks of delicate dancing, of smiling requests and impatient urgings, Jobs decided to take the gloves off. Hence the meeting in Seoul. The Apple executives were escorted to a conference room high in the Samsung Electronics Building, where they were greeted by about half a dozen Korean engineers and lawyers. Dr. Seungho Ahn, a Samsung vice president, was in charge, according to court records and people who attended the meeting. After some pleasantries, Chip Lutton, then Apple’s associate general counsel for intellectual property, took the floor and put up a PowerPoint slide with the title ‘Samsung’s Use of Apple Patents in Smartphones,'” Eichenwald writes. “Then he went into some of the similarities he considered especially outrageous, but the Samsung executives showed no reaction. So Lutton decided to be blunt. ‘Galaxy copied the iPhone,’ he said. ‘What do you mean, copied?’ Ahn replied. ‘Exactly what I said,’ Lutton insisted. ‘You copied the iPhone. The similarities are completely beyond the possibility of coincidence.’ Ahn would have none of it. ‘How dare you say that,’ he snapped. ‘How dare you accuse us of that!’ He paused, then said, ‘We’ve been building cell phones forever. We have our own patents, and Apple is probably violating some of those.'”

“The message was clear. If Apple executives pursued a claim against Samsung for stealing the iPhone, Samsung would come right back at them with a theft claim of its own,” Eichenwald writes. “The battle lines were drawn… Conversations eventually broke off, and Jobs grew increasingly eager to take Samsung to court and fight. [Then Apple COO Tim] Cook continued counseling patience, arguing that it would be better to have a negotiated resolution than to duke it out with a company of such importance to Apple’s business. Then, in late March 2011, Samsung introduced its latest tablet computer, this time with a 10-inch screen. It struck Apple executives as a knockoff of the company’s second version of its tablet, and they weren’t surprised: Samsung had already proclaimed that it would change its own model to rival the iPad 2. Cook’s caution was shoved aside. On April 15, 2011, the company filed a federal lawsuit in California against Samsung for infringing on the patents of both the iPhone and the iPad.”

Tons more in the full article – very highly recommendedhere.

MacDailyNews Take:

I don’t know which is worse: Samsung’s slavish copying or that there are tens of millions of dullards and/or morally-crippled consumers who would buy such obvious knockoffs. What kind of person rewards thieves, especially such obvious ones? What kind of person hands over their money to make sure that crime pays? What’s wrong with you people, exactly?

It makes me sad that there are outfits like Samsung Electronics on the planet, as I was with Microsoft before them. People who work for Samsung Electronics should be ashamed. It makes me even sadder to see people supporting blatant criminals, whether it be blindly or, worse, knowingly. To those people I say: Get some morals, will you, or how about at least acquiring a modicum of taste?

What you’re doing is supporting criminal activity. It’s like you’re buying knockoff Coach handbags, but you’re paying pretty much the Coach price! Not too smart, eh? Oh, sure, you might have “saved” a bit upfront on your fake iPhone (maybe you got one of those Buy One Get One or More Free deals), but you’re paying the same data rates – after a couple years, you’ve pretty much paid the same anyway! So, in the end, you’re saving little or nothing while:

a) depriving the company who basically inspired your inferior, fragmented product;
b) depriving yourself of the real deal and the real experience, and;
c) rewarding the criminal, encouraging them to steal even more.

Not a lot of sense being made in any aspect of your toting around that Android phone, is there? Oh, right it’s “open.” Smirk. And, yes, every one of us with the real thing knows that you’re carrying around a half-assed fake, you tasteless wonder.

Didn’t you people have parents? If so, what did they teach you, if anything? Sheesh.SteveJack, MacDailyNews, August 6, 2012

[Thanks to MacDailyNews Reader “eonicman” for the heads up.]

53 Comments

    1. What an abomination of a post. How dare you post such insane drivel. I think you were clearly trolling in an attempt to paint yourself as a typical Apple fanboy, but none of us who post here regularly are that inhumane.

      1. No, the post is fine. Koreans are the abomination and have been for centuries. Just ask their neighbors. They have just adjusted their most unbecoming behavior to suit the new world conditions.

        Please save the kumbaya rantings for your church meetings.

        1. You mean like how America ended chattel slavery, stopped lynching black people by the hundreds and no longer entertains the thought of nuking whole cities as a geopolitical show of strength? Everybody has “adjusted their most unbecoming behavior to suit the new world conditions,” you racist numbskull.

          And you’re the one who could stand to benefit from a couple church meetings.

        2. I think you’ll find that Great Britain ended slavery in 1833, America didn’t stop until thirty years later.
          Please try to get your historical facts straight.

        3. Pull your head out of your ass, Rorschach. The discussion was obviously within the context of domestic policy. Who would think that I meant the end of slavery, period, when it remains an ongoing struggle around the world today?

          And slavery didn’t “stop” in America in 1863. That was when Lincoln issued the Emancipation Proclamation, a war time directive with strict limitations based on his executive powers as Commander in Chief. Slavery in America wasn’t officially abolished until the 13th Amendment was formally ratified in 1865. I think you’re the one who needs to brush up on history.

  1. This is a very good article from VF. I suggest we all use as another reference for the lying Apple Haters that are clearly in red alert this week. The web is full of amazing nonsense from these subhuman trolls.

    1. Title: “why Apple might win the battles but still lose the war”

      I haven’t seen or heard anything suggesting that Apple is doing things wrong and will lose anything, much less a war in any near future.

      1. Perhaps the story suggest that no matter what you do and how many time Samsung is caught, it will not change their corrupt business practice. Eventually wearing down the competition till they can’t compete with cheap lower priced knockoffs.

    1. They are all massing on CNET, ZDNET and all the other sites that non tech savvy consumers go to. The plan is to brainwash neophytes into thinking that supporting a US Garage Startup company like Apple is evil.

      Supporting a Foreign Company that practices illegal activities and cheap knockoffs like Samsung is good.

  2. May those who masterminded Samsung’s criminal business model succumb to virulent necrotizing fasciitis, unless they already have, which would explain their monstrous behaviour

  3. Ultimately Apple need to move their component supply away from Samsung. But as the article clearly states Samsung are adept at stealing tech and doing anything to kill competitors. So Apple will need to be very clever in gradually taking way their business from Samsung.
    I’m sure Tim Cook is working those angles and building up a supplier base that will compete with Samsung and be able to starve off the underhanded attacks that will no doubt ensue.
    Samsung has deep pockets but Apple is smarter and wealthier. It will take time but in the end Apple will prevail.

  4. Korean business tactics are well known to those in the industry. It doesn’t matter whether the disagreement is with a wife, lover, business partner or competitor. Korean business tactics almost revel in using force, lies and deceit.

    The article covers some of it. I had a friend who use to have Korean clients in the import business and he quickly became soured on representing them as he could never figure out what was true, unless he just assumed everything was a lie.

    1. Amazing story in Vanity Fair exposing Samsung’s international crime wave.

      Samsung is the vital part of the Korean economy and thus has the Korean politicians, Korean government and for all we know Lucy Koh also in their pocket. Koreans seem to accept this corrupt existence because they are strongly nationalistic and of one mind.

      It is a shame that the U.S. could lose thousands of military lives defending such an immoral country. Maybe we should pull all our thousands of military out of this corrupt nation and cut our potential loses.

  5. These days after the passing of Steve Jobs Apple’s idea factory has run dry. The best they can do with iOS 7 is to copy and rip off features from Android, Samsung TouchWiz, WebOS and Windows Phone 8. There’s no originality left in Apple. Cook & Ive have turned Apple into the world’s biggest copying machine, bar none. Sad but true.

  6. Great article and MDN commentary. Agreed, the problem begins with the individuals who support thieves. There’s no difference between buying a stolen phone on the streets of New York, or buying a ripoff iPhone. It’s up to individuals to support the companies that truly innovate, and no reward thieves. The problem is complicated by an inordinate amount of money being spent on advertising “The Next Big Thing,” convincing people that the emperor’s clothes are beautiful. Also, as revealed in the court documents, Samsung has spent a lot of money attacking iPhone users and on PR to blacken the image of Apple — all smoke and mirrors and as underhanded as a CIA campaign. This is not a healthy company. Love Apple or not, at least it was founded on the principal of improving the lives of individuals though technology. Samsung, no so much…

    1. I think there are bigger things at stake than this particular battle.

      Since West (generalisation) is unable to compete with Asian cheap labour, in order to survive it has to rely on its brains, research skills and ultimately its Intellectual Property.

      Once the idea that anyone inventing something, or innovating can see their ideas ripped off, patents notwithstanding, then the supply of ideas as well as money for original research will dry up.

      If the principle is established that IP can be ripped off with impunity, then all sectors are at risk. Pharmaceuticals, bio-genetics and everything that requires intellectual input.

      The only way then is down….

      1. Agree. It is well known that the “rule of law” is highly correlated with developed societies and the wealth of nations. Those countries with a deeply embedded culture and legal system that protect property rights (individual rights, too) are wealthier and ‘more civilized’ than countries that do not.

        I just do not understand why, or when, the US legal system has become so apparently disdainful of enforcing intellectual property rights.

        1. Why? Well, it could be because of underlying cultural and economic forces, or because of imprecise patent law, judicial bias or corruption, grandstanding and delay tactics, inept lawyering, or other excuse. But from what I’ve seen, I’m going with stupidity.

  7. Don’t despair. Apple shall prevail in time.

    Meanwhile, with each case, Samsung is losing in the court of public opinion. People increasingly recognize the Apple iPhone as a superior product AND a better value. And with the recent case, Samsung has been found — once again — to have violated Apple’s IP. And to have done so willingly. This will not sit right with honest people. Samsung’s image will be increasingly tainted (at least, among those who now think highly enough of them to buy their products; I am not referring to the illuminati like most of us here) with each legal case it loses.

    Apple has no choice but to take the long view with respect to protecting its IP. Important precedent is being set, case by case. Apple has many more patents to defend, and I say: bring ’em on. Apple is at least covering its legal costs while Samsung is not. Apple may not have “blown Samsung up” (or Google, either), but they may yet bleed to death. Apple only has another few hundred more patents to argue, even if they are only arguing 5 at a time to keep it simple for juries …judges, too. Meanwhile, Apple is covering its costs, establishing important legal precedents, and moving forward. They will not forget. They will get the job done. Even if it takes time. Just ask MicroSoft.

    The situation makes me recall a book called _How Nature Works_ by Per Bak, a Danish Nobel prize-winning physicist. The book describes the concept of “self-organized criticality”, which turns out to describe a lot of natural phenomena. For example, if sand is dropped, one grain at a time, on a pile, at first nothing happens. Slowly, small slides begin to occur. And then bigger ones. And eventually, a huge sand pile avalanche happens. There a lot of little slides, fewer medium-size slides, and very few avalanches. The basic process is the same in each case — one grain of sand was added. But the outcomes differ as more grains accumulate. These cases are Apple’s grains of sand. They just have to keep dropping them on the same pile until the bigger avalanches start to happen.

  8. the article is interesting but the conclusion is WRONG.

    “After more than 1,000 days of litigation, hopefully one morning soon executives at Samsung and Apple will look at their reflection and, at long last, hit their limit of “no”s.”

    Samsung EXPECTS and WANTS Apple like all the other companies it has screwed to say ‘enough’ and back down because they are tired and want their comfort zone of ‘peace’ . That’s Samsung’s strategy M.O for years which the author explained so well .

    SO DO NOT GIVE THEM WHAT THEY WANT AND EXPECT.

    Samsung thinks other companies are ‘too soft’, so they will win in the end if they are a bully. To win over a bully is not to bend over, but fight like a madman, put the fear of God into them.

    Remember Winston Churchill’s Idea of HOW TO DEAL WITH BULLIES :

    ” We shall go on to the end. We shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our island, whatever the cost may be. We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender”

    THAT’S HOW YOU BEAT BULLIES.
    Jobs understood that : “go thermonuclear”.

    The difference between Apple and England in 1940 is that England was on the defensive against a juggernaut, but today Apple is big freaking giant that just made ten thousand million in profit last quarter and has plenty of resources to fight.

    Bash the copycat and it’s immoral cohorts (google I’m looking at you) until they surrender ….

    ——
    When I was younger I worked in Asia for years. My Asian boss showed me the machete marks he has on his arms which he got while ‘climbing up’. I was working for him when his BMW 700 was set on fire by business rivals. He’s revenge was rebuilding his BMW and installing a U.S 20,000 stereo system (“see you can’t hurt me”). He had people watch over his daughters in case of kidnapping. I’ve talked to a kidnap victim and tong members… You want to play in Asia , grow some balls….

    1. Fact is Apple is earning fortunes despite everything Samsung throws at it, while Samsung is despite al its efforts treading water and indeed of late is finding its earnings on many fronts being pushed hard. Apple has withstood Samsung’s blitzkrieg and is actually growing stronger Samsung is now into holding on to what it has gained as other players grow stronger and eat away at its margins. Samsung didn’t achieve the knock out blow and from now on it is fighting a defensive battle. It has a long hard struggle to survive in the markets it is in for it is a wide ranging conglomerate that has no long term advantage and others learn to beat it at its own game. I suspect despite its apparent strength the powers that be at Samsung are very worried as its share price and profits come under pressure in important areas of its business. It failed in its admitted policy of replacing Apple where it matters and time will now do the rest by hitting increasingly its declining margins itself hitting at its marketing budget that’s so important at sustaining its sales. Only Apple can destroy itself certainly not a wannabe like Samsung while there are so many competitors out there ready to destroy Samsung bit by bit.

  9. Everyone in the anti samsung corner forgets that we (including apple) enable samsung to do what they do. Remember a long time apple “friend and ally ” called Google???
    This company would rather see samsung grow at the expense of apple so that they can make a buck.
    Without typical western short term greed , a snake like Samsung can never thrive

  10. You would think that a country with more military assets in Korea than Korea has, could just take out the Samsung Electronics Building and fix things permanently.

    Obama needs at least one win before he gets booted out of the White House.

    1. I would be happy to see all US military personnel come “home” from Korea for good. Give the money saved back to taxpayers. If South Korea wants to “run with the bid dogs”, I say let ’em.

      1. Hahaha …. “give it back to the taxpayers” … as if the US government was Michael Dell. Even if we pulled out of Korea completely, not a single penny would come back to us taxypayers. Our elected officials wouldn’t even use the savings to pay down the debt … they would spend it elsewhere, just as if they had found a $20 bill in the pocket of a pair of pants they hadn’t worn in awhile.

  11. I don’t see it that way. I think it will be the other way around. Samsung may win some battles, but Apple will win the war.

    Already it has been revealed how ruthless Samsung is, how they lied about sales figures, and what copy-cats they are.

    The consequences of these will be far and wide as competitors and partners will be more wary in their business dealings with Samsung.

    We are already seeing that happen with Apple reducing their reliance on Samsung. And I would especially like to see analysts always consider the “Samsung premium” when reporting sales figures.

  12. After reading the article, this Samsung company reads like a mafia organization. The only difference is the have a legitimate products that they sell but they are so underhanded. Apple should not give up the fight, make these bastards pay the court and attorney fees up the whazoo! Unfortunately when we have judges and jurors that are ambiguous when it comes to right and wrong, Apple will have many more pyricch victories.

  13. I have a friend who invented Eco Cement (look it up) he went around the world to promote it and now its used in some places without royalties to him. He’s too poor to sue! So his intellectual property is stolen.

    A girl made a Indi full length movie and it was downloaded by millions for free. Do you think she’ll make more movies?

    Apple is a bit bigger and yous whinge – join the real world.

    I have some provisional patents that remain secret till full patents are done when they become open to all. Guess what? They don’t become full patents because I’m poor!

    Do you care? You should! But music theft is the current morality world wide for all property. So Get Fcuk World! It can be destroyed for all I care!

    Android is Google’s entry into the private life of people. Its OS is free so that Google can know What u do
    Where u go
    Things u see
    Music u play
    so that Google can sell* ad space on the phone to companies, where it makes its ONLY money!!

    Its criminal oops coding errors record proves it – breaks into private set iPhones etc

    Finally some actiont – Google slapped with antitrust suit on “open” Android MADA contract.

    * Not by Click but also by hover nearby

    1. I don’t see anywhere that you are wrong. I think you are right, and this entire issue is moral — it operates at an individual level, but organizations must be held to a moral standard as well. Law encodes morality. When that fails—doom.

      DAMN this species and its pretensions to godhood.

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