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Conspiracy, Bribery, and Corruption: Why Patent Infringement is just the Start of Samsung’s Problems

With samsung applea new lawsuit filed this week and a jury verdict returned last week, the Samsung-Apple patent war has entered its Nth round of litigation.

After nearly 3 years of litigation in courts around the world it’s easy to become numb to the story, but it’s worth noting that there’s a deeper story here than the usual squabbling.

This blogger has a general low opinion of patent litigation, but a recent article in Vanity Fair has shown me that there’s more to the Apple-Samsung fight than simply jealous competitors.

The Samsung Apple dispute started in 2010, when Samsung released the Galaxy S, a smartphone with a 4″ screen. Apple was not happy:

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.

Just to give you an idea of the similarities, here’s the Galaxy S next to the then current iPhone:

samsung apple

While both Samsung and Apple have copied ideas from their competitors or simply duplicated ideas first expressed elsewhere, Samsung’s shady behavior goes much further than that.

Take, for example, the first known instance of Samsung conspiring to fix prices:

Still, some Samsung executives saw a path for boosting profits by boldly and illegally fixing prices with competitors in some of their top businesses. The first products known to have been the focus of one of Samsung’s major price-fixing conspiracies were cathode-ray tubes (C.R.T.’s), which were once the technological standard for televisions and computer monitors.

When the conspiracy was finally exposed in 2007 onward (long after CRT stopped being a viable market), Samsung ended up paying a few hundred million in fines in Europe, the United States, Japan, and South Korea.

And then there is the LCD price-fixing conspiracy:

The success of the C.R.T. conspiracy apparently sparked similar schemes. By 1998 the market for L.C.D.’s—a newer technology that used liquid crystal to create the image and competed directly with the C.R.T.—was taking off. So in November, a Samsung manager spoke with representatives from two of the company’s competitors, Sharp and Hitachi. They all agreed to raise L.C.D. prices, according to investigators. The manager passed the exciting information on to a senior Samsung executive, and the L.C.D. conspiracy grew.

That conspiracy resulted in lawsuits by Dell, AT&T, and other companies, as well as numerous fines in China, the United States, and elsewhere.

And let’s not forget Samsung’s conspiracy to rig the global market for RAM:

The decision to fess up to the L.C.D. scheme may not have been driven just by Apple’s suspicions. Samsung was already in law enforcement’s sights: sometime earlier a co-conspirator in another criminal price-fixing conspiracy had given up Samsung. That scheme, beginning in 1999, involved Samsung’s huge business for dynamic random-access memory, or DRAM, which is used in computer memories. In 2005, after it was caught, Samsung agreed to pay $300 million in fines to the U.S. government. Six of its executives pleaded guilty and agreed to serve sentences of 7 to 14 months in American prisons.

That cost Samsung over $300 million in fines in the US alone.

And now that you know that Samsung has conspired with their competitors in no less than 3 different industries, it should probably come as no surprise that the company is massively corrupt. It’s so bad that Samsung’s former general counsel blew the whistle:

In 2007, its former top legal officer, Kim Yong-chul, who made his name as a star prosecutor in South Korea before joining Samsung, blew the whistle on what he said was massive corruption at the company. He accused senior executives of engaging in bribery, money-laundering, evidence tampering, stealing as much as $9 billion, and other crimes.

After few senior managers were prosecuted aside from the CEO (they got him for tax evasion), Mr Kim went on to write a book detailing his experiences with Samsung.

There are plenty more examples of Samsung’s misdeeds in the Vanity Fair article, including examples of many patent infringement lawsuits, but I’m going to cut the list here.

The point I want to make, folks, is that one party in the Samsung-Apple dispute is guilty of massive and repeated conspiracies. I don’t know about you but that radically changes my view of Apple’s complaint’s about Samsung copying Apple’s ideas and patents.

Apple’s accusations of Samsung infringing upon Apple patents and copying Apple’s designs aren’t just bitter grapes on the part of Apple; Samsung is engaging in a concerted and organized campaign to rip off anyone they can for as long as they can.

P.S. For once, I am happy that Samsung doesn’t have much of a presence in ebooks, otherwise I would be expecting to one day read about Samsung conspiring with publishers.

Vanity Fair

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George May 5, 2014 um 6:55 pm

Hopefully I don’t have to give up my Galaxy S4, though.

jjj May 5, 2014 um 7:07 pm

Hilarious how you somehow think that past infractions have any relevance and that you don’t even attempt to look at how twisted Apple is.
Lower morality that Apple is hard to imagine but hey America needs heroes ,reality is irrelevant.

Nate Hoffelder May 5, 2014 um 7:14 pm

If you like I could bring up the patent infringement suits brought by Pioneer, Sharp, InterDigital, Kodak – the list is long, and in nearly every case Samsung lost.

I stuck with the conspiracy and related issues because I thought they were the most damning, not because that’s all I could find.

Robby May 5, 2014 um 10:08 pm

I wonder when will these companies think about progress of science and tech instead of profits only.

In my book, Both Samsung and Apple are bad. I have used Samsung phones and they lag when compared to other Android phones and are least vfm.

The all virtuous apple charges over a 100$ for extra 16 GB space

Al the Great and Powerful May 5, 2014 um 10:08 pm

I’ll be happy to cheer them both down the drain. Samsung’s villainy doesn’t excuse Apples crimes.

Hayden May 6, 2014 um 12:21 am

This is the feeling that I agree with most. None of the major players are guilt free. The difference is in the level of guilt. They fight with big teams of lawyers to knock out the little guys. They keep appealing lost cases in the hope of getting a friendly jury/judge.

By all means buy whichever gadget you prefer but don’t tell me that one company is worse or better than the other.

I am sure that we could find a number of legal cases lost by Apple, Google, Amazon, Microsoft and so on. Some people might say that Samsung is deliberate in its actions whilst other companies just try to tread a fine legal line and sometimes get into trouble. Still the amount of imitation and use of similar ideas and technology is rampant.

Valentine May 6, 2014 um 4:17 am

Both are bad, and the trials are a joke, the only ones laughing are the lawyers.

Trademark and copyright laws are fairly similar all over the world, but only in the USA you can see them fighting it out …

Nate Hoffelder May 6, 2014 um 5:39 am

There have been lawsuits in Europe, Japan, Australia, and those are just the ones I could find quickly.

Top Twos-Day: Too Easy Peasy | Roxie's Blog May 6, 2014 um 7:08 pm

[…] In other news, well, no forgive me I got carried away. LOL. The other significant to cross my desk this week, “Conspiracy, Bribery, and Corruption: Why Patent Infringement is just the Start of Samsung’s Problems.” Since Apple and Samsung’s heated litigation, new info has emerged, says Nate Hoffelder. Full story and background to catch you up to speed at The Digital Reader… […]

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