Samsung, Apple agree to drop patent litigation outside of U.S.

Apple (NASDAQ: AAPL) and rival Samsung Electronics agreed to abandon all of their existing patent litigation against each other outside of the United States. However, the companies have not reached any kind of a formal settlement surrounding their patents, and the battles will go on in U.S. courts.

"Apple and Samsung have agreed to drop all litigation between the two companies outside the United States," the companies said in a joint statement. "This agreement does not involve any licensing arrangements, and the companies are continuing to pursue the existing cases in U.S. courts."

The companies agreed to drop claims against each other in Australia, Japan, South Korea, Germany, Netherlands, the UK, France and Italy, according to Bloomberg. Apple first sued Samsung for patent infringement related to the iPhone in the U.S. in 2011.

Samsung is the world's largest smartphone maker and Apple is No. 2, and as the market has grown more competitive, the two companies have increasingly turned to patent litigation to seek sales bans on each other's products. As the Wall Street Journal notes, Samsung agreed earlier this year not to seek injunctions in Europe for five years over the use of key patents. That came after the European Union made a formal complaint against Samsung in late 2012 for seeking injunctions when other companies said they would license Samsung's patents.

The U.S. is where Apple has had the most success in the courts against Samsung. In May, a jury gave Apple a damage award of $119.6 million in its patent-infringement trial against Samsung, which was far less than the $2.2 billion Apple had sought. In November 2013, Apple won $290 million in damages from Samsung after a jury ruled in its favor in a retrial of the smartphone titans' 2012 patent infringement clash. Apple won $1 billion in damages in a courtroom victory against Samsung in August 2012, though the damages in the ruling were later slashed by $450.5 million after U.S. District Court Judge Lucy Koh ruled the jury had erred in calculating the damages.

Samsung has appealed both decisions and Apple has not received payment from the awards yet. Meanwhile, Apple has failed to get far-reaching U.S. sales bans on Samsung phones. Apple has also failed to blunt the momentum of Google's (NASDAQ: GOOG) Android platform, which was seen as a motivation for the lawsuits against Samsung. According to research firm Strategy Analytics, Android captured a record 85 percent of the global smartphone market in the second quarter.

Samsung is also facing its own struggles in the market. The company's mobile sales have recently slipped and profit from its handset business has started to erode amid intense competition from local OEMs and ODMs in markets like China and India.

"The U.S. litigation is the most important. There is the most at stake. Apple in particular is hesitant to let it go," Michael Carrier, a patent-law expert and law professor at Rutgers University, told the Journal. "I think Apple is coming to the realization step by step that this litigation is not worth it."

For more:
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this The Verge article
- see this Reuters article

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