Samsung Electronics, Apple call end to patents war outside U.S.

Wed Aug 6, 2014 5:28am EDT
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By Hyunjoo Jin and Dan Levine

SEOUL/SAN FRANCISCO (Reuters) - Samsung Electronics Co Ltd (005930.KS: Quote) and Apple Inc (AAPL.O: Quote) said they had agreed to drop all patent litigation outside the United States, scaling down a protracted legal battle between the smartphone rivals.

The iPhone and Galaxy handset makers issued nearly identical statements announcing the global ceasefire while vowing to pursue ongoing litigation in the United States, which analysts say involves much bigger amounts of potential damages.

The stand-down is likely to enable Samsung Electronics, the world's top smartphone maker, to shift its focus to its Chinese rivals such as Xiaomi rather than fighting a costly and prolonged legal war with Apple around the world, analysts said.

"It appears that Samsung and Apple, the market leaders, made a strategic alliance as China's Xiaomi is emerging as a formidable rival," said Cho Chang-hoon, a business professor at Sogang University in Seoul.

Last week, Samsung Electronics posted its weakest earnings since the second quarter of 2012, partly hit by rising competition from Chinese smartphone makers.

Xiaomi took China's smartphone crown in the second quarter after replacing Samsung Electronics as China's largest smartphone vendor, data from Canalys shows.

The legal battle between Samsung Electronics and Apple began in the United States in 2011 when Apple first filed a suit alleging that Samsung "slavishly" copied elements of its iPhones, the device which launched the industry.

Days after the initial Apple suit was launched in the United States, Samsung Electronics sued its Cupertino, California-based rival in South Korea, Japan and Germany, kicking off a series of tit-for-tat cases that spread around the world.   Continued...

A sales assistant holding Samsung Electronics' Galaxy 5 smartphone (L) and Apple Inc's iPhone 5 smartphone (R) poses for photographs at a store in Seoul July 16, 2014. REUTERS/Kim Hong-Ji