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Apple and others reach settlement agreement in anti-poaching class action suit
The anti-poaching class action lawsuit that embroiled a number of high profile tech companies has come to an end. The New York Times reports that Apple, Google, Intel, and Adobe all reached settlement agreements with the plaintiffs party to the dispute. Terms of the settlement were not disclosed, but the plaintiffs had argued that the lost wages added up to $3 billion. Three smaller settlements with other defendants, which included Lucasfilm, Pixar and Intuit, were reached last year for $20 million. "This is an excellent resolution of the case that will benefit class members," Kelly M. Dermody, a lawyer at Lieff Cabraser Heimann & Bernstein, the plaintiffs' legal team, said in a statement. "We look forward to presenting it to the court and making the terms available." If you recall, Apple and slew of other tech companies entered into anti-poaching agreements from 2005 through 2009 whereby parties to the agreement all agreed not to recruit employees from one another. The class action suit was subsequently brought forth by five software engineers in 2011 who alleged that the anti-poaching agreements minimized their job prospects and ultimately worked to compress employee salary rates in Silicon Valley. The lawsuit made headlines many times over, often because filed court documents relayed interesting email exchanges between some of tech's most high-powered executives. For instance, some emails revealed that Steve Jobs at one point intimated that Apple might sue Palm if Palm didn't agree to stop recruiting Apple employees. In another instance, emails revealed that Steve Jobs angrily called Google co-founder Sergey Brin over Google's efforts to recruit Safari employees.
Apple files motion protesting Samsung assertion that Apple doesn't practice patents at issue
Apple and Samsung have only been at it for a day and already the two companies are squabbling. In a motion filed earlier this afternoon, Apple expressed displeasure with the fact that Samsung, during its opening argument, asserted that Apple doesn't practice the patents it's asserting against the Korean tech giant. Consequently, Apple filed a motion seeking permission from the court to present evidence and testimony which would serve to prove that Apple "has practiced and continues to practice the '414, '172, and '959 patents." In the interest of clarification the aforementioned patents relate to Asynchronous data synchronization, predictive typing, and unified search, respectively. Apple's motion reads in part: During opening statements, Samsung's counsel repeatedly made irrelevant, misleading, and even untrue statements that have undoubtedly caused the jury to form impressions that are highly prejudicial to Apple. Over and over again, Samsung's counsel represented that Apple has never practiced the '414, '172, and '959 patents-even though, as Samsung knows, Apple has sold and continues to sell products that use each of Apple's asserted patents. The Court's order limiting Apple's ability to contend that it practices the '414, '172, and '959 patents at trial does not (and cannot) permit Samsung to affirmatively present false factual statements to the jury; but now that Samsung has done precisely that, Apple should be permitted to respond with testimony and evidence demonstrating that Apple practices those patents. What's more, Apple wants Judge Lucy Koh to instruct the jury that whether or not a party practices an asserted patent is irrelevant towards the issues of patent infringement and validity. Apple's motion also seeks a revised jury instruction in the wake of Samsung mentioning the injunctive relief Apple is seeking. Apple contends that in referencing the idea of a permanent injunction, Samsung is prejudicing the jury. Permanent injunctive relief is an equitable remedy for the Court-and the Court alone-to decide following the jury's verdict. Samsung is asking the jurors to decide this case based on the consequences of their verdict, not the facts or the law. Samsung's statement risks that the jury will think that Apple is not entitled to damages or, even worse, that it should find no liability to avoid the possibility of an injunction. It is an improper invitation to jury nullification. Koh subsequently ordered Samsung to file a response to Apple's motion by 6:00 PM today. A determinative judgement on the motion should be coming soon. I''ve uploaded Apple's motion to Scribd, along with a transcript of Samsung's opening statement which contains a number of excerpts Apple took umbrage with. Apple Uses Patents And here's the transcript of Samsung's opening statement. Transcript Opening Statments
Apple/Samsung trial, day 1: Phil Schiller was extremely concerned with Samsung's advertising efforts
Day 1 of Apple and Samsung's second California trial is now in the books. On Tuesday, both Apple and Samsung presented their opening arguments, with both sides naturally presenting vastly different takes on the smartphone revolution. Apple of course contends that Samsung piggy-backed off of its hard work, blatantly copying many of Apple's design decisions and patented technologies. Attorney Harold McElhinny, representing Apple via the law firm Morrison Foerster, said that Samsung's products may very well infringe upon 50 of Apple's patents, but asserting every patent wouldn't be feasible. So instead, McElhinny articulated that Apple decided to assert 5 patents that together were infringed by 37 million Samsung phone and tablet sales. While much has been made of Google taking a more prominent role in this second trial, McElhinny emphasized that "It's Samsung, not Google selling these phones. It's Samsung making these things, and infringing." All told, Apple is seeking $2 billion in damages, a lofty figure that many in the tech/legal realm seem to agree is rather excessive. Addressing this very point, McElhinny reportedly said during opening arguments that "the reason the damages are high are because the scope of Samsung's infringement was massive." Most notable from Tuesday's proceedings is that Apple's Phil Schiller took the stand where we learned that Apple's marketing chief was keenly aware of and concerned with a January 2013 Wall Street Journal article titled, "Has Apple Lost Its Cool to Samsung?" Following the publication of that article, Schiller reportedly sent an email to Apple's ad agency stating that "We have a ton of work to do to turn this around." Also of note is that Samsung, when cross-examining Schiller, noted that Apple's marketing chief was "obsessed" Samsung's youth-based advertising efforts, even going so far as to tell Tim Cook that Apple should consider a new ad firm. Apple of course kept its ad agency -- TBWA\Chiat\Day -- and over the last few months we've some of the best Apple ads we've seen in some time. Court proceedings will resume this coming Friday.
Judge Cote grants class action status to consumers in e-book lawsuit
Reuters is reporting that a federal judge has given consumers the go-ahead to proceed with a class action lawsuit against Apple for colluding with a number of publishing houses to raise the price of e-books. U.S. District Judge Denise Cote said the plaintiffs had "more than met their burden" to allow them to sue as a group. She rejected Apple's contentions that the claims were too different from each other, or that some plaintiffs were not harmed because some e-book prices fell. "This is a paradigmatic antitrust class action," wrote Cote, who has scheduled a trial later this year to determine damages, which could reach hundreds of millions of dollars. Of course, Apple's ongoing e-book price fixing saga with the US Justice Department and U.S. District Judge Denise Cote in particular is not without its fair share of controversy. Recall that Apple expressed major reservations about Cote choosing Michael Bromwich to serve as the company''s external anti-trust compliance monitor, even attempting, albeit unsuccessfully, to remove him. What's more, those who feel Apple has been getting a raw deal in all of this have pointed out that Cote, in the past, has been accused of pre-determining which side she favors in a legal dispute. That said, it's worth pointing out that the Reuters report relays that Cote this past Friday "denied Apple's motion to exclude the opinions of Apple's two damages" while at the same time deciding to throw "out the opinions of Apple's two damages experts, saying they were not based on 'rigorous application of economic methods.'" And speaking of economics, and with respect to Cote's statement that Apple's e-book saga represents a "paradigmatic antitrust class action", two Professors of Economics earlier this month published a 30-page amici curiae brief articulating that Judge Cote's ruling in favor of the US Justice Department was completely misguided and belied a fundamental lack of understanding of economics. The brief, put together by Bradford Cornell from CalTech and Janusz Ordover of NYU, reads in part: Efficient markets depend on firms acting in their independent business interests. In this case, the District Court's failure to consider the economics of the vertical agreements between Apple and the Publisher Defendants led it to infer that Apple facilitated and participated in a horizontal price-fixing conspiracy. The District Court never considered evidence and economic reasoning that the vertical agreements were in Apple's independent business interest in entering e-book retailing, wholly apart from any horizontal conspiracy. The provisions of the agreements at issue-agency, 'most-favored-nation' (MFN) clauses, and price caps-can be instrumental in facilitating new entry, particularly into markets with an entrenched, dominant firm. In this case, the District Court disregarded economic evidence and reasoning that these provisions served Apple's independent business interest in entering the e-book market, where Amazon was a near-monopolist. The District Court also ignored economic evidence and reasoning suggesting that Apple's entry into e-book retailing, and not the MFNs, allowed the Publisher Defendants to persuade Amazon to switch from a wholesale to an agency business model. The District Court also erred in equating price increases for some e-books with harm to competition. Apple's entry into the e-book retail market dramatically increased competition by diminishing Amazon's power as a retail monopolist (and its ability to pursue a "loss-leader" strategy that inefficiently priced e-books below their acquisition cost). That increased competition gave publishers more bargaining power, thereby bringing ebook pricing closer to competitive levels. These errors threaten to chill competition by discouraging the use of common vertical contracting techniques that are often essential to facilitating the expensive and risky investments needed for entry into highly concentrated markets. Our antitrust laws should encourage, not penalize, vertical contracting arrangements that facilitate entry and enhance competition.
Primer on Apple vs. Samsung Part II
Apple and Samsung's second major patent trial gets underway in California today. While the parties involved remain the same, the products and patents at issue are substantially different. Undoubtedly, in the coming weeks we'll be inundated with day-to-day reports relaying the latest news from the courtroom. To help provide a little bit of context to the legal proceedings, below is a breakdown of the patents and products at issue, along with information detailing how Apple and Samsung's second legal case differs from the first. What this case isn't about In stark contrast to Apple and Samsung's first trial, the second trial does not involve any design patents which can encompass the physical design of a product as well as certain software aesthetics. Remember all the talk about the iPad's rounded corners and iOS's grid layout? There will be no such discussion this time around. Design patents aside, it's worth noting that a number of important utility patents Apple asserted during the first trial -- inertial scrolling, multi-touch navigation, and tap to zoom -- will not be at issue during the second trial. What this case is about After a few months of narrowing down the number of patents to be asserted at trial, Apple will be asserting 5 of its patents against Samsung while Samsung will be asserting just two patents against Apple. Apple's accused products Samsung alleges that these Apple products infringe upon their patents: the iPhone 4, iPhone 4S, iPhone 5, iPad 2, iPad 3, iPad 4, along with the 4th and 5th generation iPod Touch. Samsung's accused products Apple meanwhile claims that the following Samsung products infringe upon their patents: the Samsung Galaxy S II, S III, Galaxy Note, Galaxy Nexus, Galaxy Note II, Galaxy S II Epic 4G Touch, Galaxy S II Skyrocket, Galaxy Tab 2 10.1, and the Samsung Stratosphere. Note that Apple had tried to include the Galaxy S 4 but the court didn't allow it. Apple's asserted patents '647 patent, claim 9 - Data Tapping This patent details a method by which a device detects certain types of data -- i.e dates, URLs, email addresses, phone numbers -- and subsequently presenting users with a pop-up menu which enables then to perform a clickable action. As a simple example, you receive a text message asking for plans "next Friday." Your device recognizes the data structure and enables you to tap on the 'next Friday' string to create a calendar event for that day. Or, let's say, you receive an email with an embedded phone number. Your device recognizes that the string is likely a phone number and lets you tap on it to initiate a phone call. Note that Apple has wielded this patent before, successfully asserting it against HTC to secure a ban on the sale of select HTC Android devices before the US International Trade Commission (ITC). This patent was initially filed in 1996 and expires in 2016. '959 patent, claim 25 - Unified Search This patent details a method for locating information from a number of sources all at once, including the Internet and local storage. This feature is often referred to as Unified Search. While Apple initially asserted this patent against versions of Android's Quick Search Box, it has also accused the Google Now search app of infringing the patent as well. '721 patent, claim 8 - Slide to Unlock This '721 patent is rather straight forward and covers a process by which a device allows a user to unlock a device by pressing on a predefined location and continuously dragging an input (i.e fingers) along a set path that corresponds to an unlock image. Claim 8 of the patent specifically covers a display with "with visual cues" that lets a user know in which direction he/she should move to unlock the device. This patent was filed in December of 2005, shortly after Apple began working on the iPhone project in complete secrecy. '414 patent, claim 20 - Asynchronous data synchronization This patent details a process by which two devices -- say a smartphone and a desktop computer -- can synchronize data while simultaneously allowing other processes to run. The patent summary reads in part: This description relates to systems, methods and computer readable media which allow for synchronization tasks and non-synchronization tasks to be executed concurrently. ... In at least certain embodiments, a method as described herein allows a user to operate both a host and a device while the two systems are performing synchronization operations. Hence, for example, a user may manipulate or view a calendar while a synchronization operation, which synchronizes structured data from, for example, the calendar or other databases such as a contact database, is being performed. '172 patent, claim 18 - GUI for providing word recommendations This patent covers a system and interface for offering word recommendations while a user is typing on a device. The user can then accept the recommendation or ignore it depending on the gesture performed. Samsung's asserted patents Samsung in recent weeks narrowed its portfolio of asserted patents from four down to two. In doing so, Samsung removed two standards-based patents from the suit. Samsung's remaining patents are as follows: '449 patent, claim 27 - "Apparatus for recording and reproducing digital image and speech." '239 patent, claims 15 - "Remote video transmission system." This patent may have implications with respect to Apple's FaceTime feature. It's worth mentioning that this particular patent was acquired by Samsung in October of 2011, about six months after Apple initially initiated its litigation against Samsung for patent infringement. Procedural information Apple will present its evidence and witnesses first, after which Samsung will be given the opportunity to refute and cross-examine. Following that Samsung will trot out its own evidence and list of witnesses. As for the jury and its mission to render a ruling, they will first be tasked with determining whether or not a device infringed the claims of a patent and whether or not the patent itself is valid. If a device is found to be infringing, the jury will then determine if the infringement was willful and ultimately come up with a damages award. Note that with respect to Apple's '172 patent, Judge Lucy Koh has already found that the Samsung Admire, Galaxy Nexus, Galaxy Note (excluding one release), Galaxy SII (excluding one release), Galaxy SII Epic 4G Touch (excluding one release), Galaxy SII Skyrocket (excluding one release) and Stratosphere infringe claim 18 of the '172 patent. That said, the jury with respect to the '172 patent will only need to determine whether claim 18 of the '172 patent is valid. As for familiar faces who may show up in the courtroom, Phil Schiller is all but a guarantee while Scott Forstall and Andy Rubin may be called to testify as well. Let the games begin.
Steve Jobs wasn't even okay with Google hiring former Apple engineers
Earlier this week, PandoDaily released a treasure trove of information pertaining to the anti-poaching agreements many top Silicon Valley tech firms entered into a few years back, including an email showing showing that Steve Jobs angrily called Google co-founder Sergey Brin over Google's attempt to hire an engineer from Apple's Safari team. Indeed, it largely appears that many top executives from firms like Intel, Google, and Apple were all party to tacit agreements not to directly solicit employees from each other. In looking over some of the publicly filed legal documents in the case, we happened to stumble upon this email thread which seems to indicate that Steve Jobs wasn't even on-board with Google hiring engineers who no longer worked at Apple. The emails below involve Steve Jobs, Jean-Marie Hullot (a former NeXT employee who worked as the CTO of Apple's Application Division from 2001 through 2005), and Alan Eustace who currently works as Google's Sr. VP of Knowledge (i.e Search). Previously, Eustace worked as Google's Senior VP of Engineering and Research. The context of these emails isn't entirely clear as Hullot never worked at Google, but it appears that Hullot may have been interested in joining Google with some of his trusted former Apple employees back in mid-2006. The email string shows that Steve Jobs, in corresponding with Eustace via email in April of 2006, "strongly preferred" that Google not hire Apple engineers who had left the company in December of 2005. I've since reached out to Hullot to confirm if he was, in fact, contemplating joining Google in 2006, which would of course help contextualize the email exchanges below. On April 25, 2006, Alan Eustace wrote the following email to Jobs: Steve, Jean-Marie would like to hire 4 people that used to work for him at Apple in Paris. Three left in Apple in December, and one gave notice in December, but was encouraged to complete his current assignment, which he agreed to do. Jean-Marie did not believe that you would object to his hiring these specific people, as long as we don't hire anyone else from Apple in Paris, but I wanted to confirm this with you, before I open the office, or any of these people start. Are you OK with this? If not, I'm willing to cancel the entire thing. If you are OK with it, I'll make sure to run the project area by you to make sure that there are no conflicts of interest with work that they did at Apple. Alan Jobs responded the next day: Alan, We'd strongly prefer that you not hire these guys. Steve. The following day, Eustace wrote the following to Hullot: Jean-Marie, Steve is opposed to Google hiring these engineers. He didn't say why, and I don't think it is appropriate for me to go back for clarification. I can't risk our relationship with Apple to make this happen over his objections. If you have any good ideas (or even bad ones), please let me know. right now, it looks like if you want to keep this great team together, it will have to be at another company. Alan Adding a bit more context to these emails, a 2008 article from TechCrunch details that Hullot and other members from Apple's Paris engineering team were actually given pink slips. Hullot and much of the Paris engineering office was let go from Apple in 2006 after Hullot reportedly lost an internal political battle over the direction of the iPhone. But under French law, laid off workers can receive 80% pay for up to 18 months after losing their jobs, directly from the government. Hullot kept five of his top engineers to work on fotonauts, while the French government paid their wages. Not surprisingly, many of the software engineers currently at fotonauts, where Hullot is now CEO, are former Apple engineers. Update: PandoDaily has since published a story adding even more context to the story. As it turns out, Google was hoping to open up an engineering center in Paris. In one of the first emails sent to Jobs on the matter, Alan Eustace wrote: Steve, Google would like to make an offer to Jean-Marie Hullot to run a small engineering center in Paris. Bill [Campbell], Larry [Page], Sergey [Brin] and Jean-Marie believe it is important to get your blessing before moving forward with this offer. Jean-Marie has worked very hard to leave Apple on the best possible terms, and has agreed to abide by the terms of his non-solicit and non-compete clauses. He loves Apple, and would not do anything to hurt you or the company. Google's relationship with Apple is extremely important to us. If that relationship is any way threatened by this hire, please let me know and we will pass on this opportunity. Alan Eustace SVP, Engineering Google, Inc. While Jobs' initial response seemed to indicate that he was okay with this so long as Google's engineering center didn't relate to "cell phone handsets", he ultimately was reluctant to give the hiring his blessing. A final email from Eustace to Jobs makes it overtly apparent that keeping Jobs happy was of utmost importance to Google. Steve, Based on your strong preference that we not hire the ex-Apple engineers, Jean-Marie and I decided not to open a Google Paris engineering center. I appreciate your input into this decision, and your continued support of the Google/Apple partnership. Lastly, I've uploaded the pertinent Steve Jobs email string to Scribd, which can be viewed below. Steve Jobs hiring
Emails reveal that Steve Jobs angrily called Sergey Brin over Google's recruitment of Apple's Safari team
During a period spanning 2005 through 2009, Apple and several other high-profile tech companies effectively signed off on anti-poaching agreements, whereby they agreed not to recruit employees from one another. The participants included Apple, Google, Adobe, Intuit, Lucasfilm, Pixar, and Intel. News of these agreements first made headlines back in 2010 when the aforementioned companies settled a lawsuit on the matter brought on by the US Justice Department. In 2011, the story made headlines once more when a group of software engineers filed a class action lawsuit against those same companies alleging that the anti-poaching agreements operated to limit their negotiation power, ultimately resulting in lower salaries. In the most recent peek into the backhanded deals that once limited employee mobility in Silicon Valley, PandoDaily this weekend published a boatload of new information about the case along with a number of emails demonstrating that Steve Jobs was none too thrilled with Google's efforts to recruit Apple engineers. Steve Jobs angrily calls Sergey Brin On February 13, 2005, Google co-founder Sergey Brin fired off the following email regarding an "irate" phone call he received from Steve Jobs regarding Google aggressively recruiting Apple's Safari team. In truth, court documents show that Google was primarily interested in a star engineer on Apple's Safari team. A few days later, Brin sent the following email to a few Google employees, including former Google and current Apple board member Bill Campbell. The email relays another "irate" phone call Jobs made to Brin. So I got another irate call from jobs today. I don't think we should let that determine our hiring strategy but thought I would let you know. Basically, he said "if you hire a single one of these people that means war." I said I could not promise any outcome but I would discuss it with the executive team again. I asked if he expected us to withdraw offers and he said yes. In reviewing the data below again, I do think this could be treated as not just an employee referral since he referred essentially a whole team. So a compromise would be to continue with the offer we have made to REDACTED but not to make offers to any of the others unless they get permission from Apple. In any case, let's not make any new offers or contact new people at Apple until we have had a chance to discuss. -- Sergey Notably, court documents reveal that Apple and Google's anti-poaching agreement with one another went into effect on March 6, 2005, not too long after these emails were exchanged. Note that in late February of 2005, Apple VP of Human Resources Danielle Lambert sent the following email to Apple's recruiting group. Please add Google to your "hands-off" list. We recently agreed not to recruit from one another so if you hear of any recruiting they are doing against us, please be sure to let me know. Please also be sure to honor our side of the deal. The deals agreed to by the companies involved worked as follows: Hiring employees who independently expressed interest in a position was okay. Cold calling employees at other companies, however, was not allowed. Particularly interesting is that the anti-poaching agreements in question encompass many more companies than previously publicized. For instance, some of the other companies that appeared on Google's "Do Not Cold Call" list included Paypal, Comcast, and Genentech. With respect to Apple, their "Do Not Cold Call" list, as of July 2009, mentioned upwards of 27 companies, including Microsoft, AMD, Foxconn, Nvidia, Best Buy, Mac Zone, and more. This trial is certainly bound to get more interesting as it adds even more details to what is already a rather intriguing case. You might recall that previous documents brought to light relay that Jobs in 2007 threatened then Palm CEO Ed Colligan with legal action if Palm didn't agree to stop recruiting Apple employees. Further, Jobs in 2007 emailed Eric Schmidt -- who at that time was Google's CEO -- asking that Google's recruiting department stop recruiting an Apple engineer. Schmidt's response promised that he would "get this stopped." Lastly, make sure to head on over to PandoDaily for the full run down of just how deep and broad these anti-poaching agreements ran.
Apple wants Samsung to pay $40 per accused device, court documents reveal
In just a few weeks, Apple and Samsung will begin their second large-scale patent infringement battle in the US District Court for the Northern District of California. The trial comes just weeks after top executives from each respective company were unable to reach an amicable settlement agreement via court-ordered mediation. Earlier this week, Florian Mueller over at FOSS Patents unearthed court transcripts which help shed some light on the licensing terms Apple was and perhaps is hoping to extract from Samsung. Specifically, Apple is seeking US$40 per device from Samsung in licensing fees. As Mueller himself points out, that type of royalty rate is ridiculously high. A damages expert will argue on Apple's behalf that, if the parties had acted reasonably and rationally in a hypothetical negotiation, Samsung would have agreed to pay $40 -- forty dollars! -- per phone or tablet sold as a total royalty for the five patents-in-suit, which relate to (but don't even fully monopolize) the phone number tapping feature, unified search, data synchronization, slide-to-unlock, and autocomplete. The theory is that Samsung would simply have raised its prices accordingly. What's particularly interesting about Apple's proposed $40 fee is that it's higher even than previous Apple licensing proposals made to Samsung. Back in October 2010, Apple offered Samsung a $30 licensing fee per each smartphone device and a $40 licensing fee per each tablet sold. At the time, Apple indicated that it was willing to knock off 20% off its proposed royalty rate if Samsung agreed to cross license its own patents to Apple. That would have resulted in Samsung ponying up $24 to Apple for each smartphone sold and $32 for each Android tablet sold. Mueller further points out that the royalty rates Apple sought in the first trial included $3.10 for pinch-to-zoom, and $2.02 for both inertial scrolling and tap to zoom, representing a grand total of $7.14 for just three software patents. Mueller adds: Apple's royalty-type damages claim for five software patents is also far out of the ballpark of anything that has ever been claimed or rumored to be paid in this industry for entire portfolios. After Apple and Nokia settled in 2011, the highest per-unit royalty estimate I heard about (and this was just an analyst's claim, not official information) was in the $10 range -- for Nokia's huge portfolio of SEPs and non-SEPs, not for a handful of patents. Guesstimates of what various Android device makers pay to Microsoft -- again, for a portfolio license, not a five-patent license -- that have appeared in the media did not exceed $15-20 per unit, at least the ones I'm aware of. (And Microsoft has a stronger software patent portfolio than Apple.) Like the first trial, this one is on track to get real interesting real quick.
The TUAW Daily Update Podcast for March 5, 2014
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get some the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the player at the top of the page. The Daily Update has been moved to a new podcast host in the past few days. Current listeners should delete the old podcast subscription and subscribe to the new feed in the iTunes Store here.
Class action suit alleges POS devices in Apple stores discriminate against the visually impaired
A new class action lawsuit against Apple alleges that the company is in violation of Title III of the Americans with Disabilities Act for not designing and providing store employees with point of sale devices (POS) that can independently be used by blind people. According to the suit, which was filed last week in the US District Court for the Southern District of Florida, visually impaired individuals purchasing an Apple product with a debit card can not independently enter their PIN into Apple's point of sale device. As a result, the plaintiff argues that Apple is denying him and other similarly situated individuals with the ability to fully and equally enjoy the goods, services, and advantages the company provides to the public at large. Further, the plaintiff argues that a large number of other retailers already use POS devices with "tactiley discernible keypad surfaces", implying that there's no reason why Apple can't do the same. The complaint reads in part: Plaintiff intends to continue to be a customer of Defendant's stores, and desires to make future payments by debit card. However, unless Defendant is required to install ADA compliant POS Devices, Plaintiff will continue to be unable to independently make payments for any purchases by debit card. ... Defendant does not provide any auxiliary aids or services calculated to make its POS Devices fully accessible to, and independently usable by, blind people. As a result of Defendant's non-compliance with the ADA, Plaintiff and the Class, unlike persons without visual impairments, cannot independently make a debit purchase at Defendant's stores With respect to recourse, the plaintiff is seeking an injunction that would require Apple to either update or replace its current fleet of POS devices as to make them independently usable by the visually impaired, and thus ADA compliant. The complaint also argues that Apple can, without any undue burden, implement "auxiliary aids and services" to address the issue. Otherwise, the complaint states that Apple's non-compliance would effectively force blind people to part ways with their private banking information (their PIN) if they wish to make debit card purchases. Originally put into law in 1990, Title III of the Americans with Disabilities Act requires that places of public accommodation be readily accessible and usable by individuals with disabilities. You can check out the full complaint below. Apple Class Action Suit ADA
Apple and Samsung tell the Court: We can't reach a settlement agreement
Largely confirming what we already knew, Apple and Samsung issued a joint filing last week detailing their efforts to hammer out a settlement agreement ahead of their upcoming patent trial. According to the filing, Tim Cook, along with three members from Apple's in-house counsel, met with Samsung mobile head JK Shin and five members from Samsung's legal and licensing team. The filing reveals that the parties, together with a mediator, met for an entire day of negotiations during the first week in February without reaching any workable resolution. Since that session, one or more of the foregoing party representatives has spoken with the mediator numerous times in order to progress the settlement efforts. For example, Apple representatives held telephonic conference calls with the mediator more than six times after the mediation. Samsung representatives held telephonic conference calls and other communications with the mediator more than four times after the mediation. Apple and Samsung's second patent trial is due to kick off on March 31, with the trial set to cover different patent claims and a new assortment of accused Samsung devices, including the Galaxy S III, the Galaxy Nexus, and the first two iterations of the Galaxy Note. A few months back, Apple tried to have the Galaxy S IV added to the patent suit, but Judge Paul S. Grewal rejected the idea in the interest of not overtaxing the court's resources. Apple's offer to drop an accused Samsung product from the suit to make room for the Galaxy S IV did not persuade the court. Apple said that by excluding the Galaxy S IV from trial, it would be forced to file an entirely new lawsuit. Indeed, a persistent theme in Apple's ongoing lawsuits with Samsung is that by the time trial commences, many of Samsung's accused products are no longer relevant, or even available for sale.
Apple, Google, and other tech companies made a secret pact to keep employee salaries low while making billions
In theory, the tech world is supposed to be a bastion of freedom -- people with the best ideas are recruited by the best people to build the best products. Libertarians often point to Silicon Valley as an example of how the free market can set people free. It only works, however, if people are truly given the freedom to go where their talent takes them. But what would happen if two companies made a deal not to poach the best and brightest from each other? Furthermore, what if that deal suppressed salaries in the tech sector by $3 billion? What should be rhetorical questions are actually hard realities that have come to light with the revelation that Google and Apple, along with other companies, worked in collusion to guarantee they'd leave each other's employees alone. The claims, first revealed by PandoDaily in January, are at the heart of an ongoing class action lawsuit that is scheduled to go to court in May. Today, Josh Harkinson at Mother Jones magazine filed a report with further details of the behind the scenes maneuvers between Apple's Steve Jobs, Google's Eric Schmidt, and Intuit's Bill Campbell to directly work to artificially keep wages low using a wide range of dirty, and possibly illegal, tricks. The story starts in 2005 when Bill Campbell of Intuit brokered a deal between Jobs and Schmidt to agree not to hire anyone from each other's firms. Apple's and Google's respective hiring directors sent out emails to their staff ordering them to add their respective rivals to their no-call lists, in an effort to not compete for employees. Schmidt knew their actions were wrong. Mother Jones reports he emailed another executive to only discuss the no-call lists verbally, so as not to create a paper trail; the kind we're talking about right now. These no-poaching policies were the subject of a 2010 antitrust lawsuit filed by the Department of Justice. According to court documents obtained by Mother Jones from the 2010 case, Steve Jobs was a leader in the anti-recruitment movement. It paints a very dark image of the Apple icon, even showing him willing to bully other CEOs into toeing the "party" line. In one instance not yet reported, Jobs allegedly played hardball with a reluctant CEO. In mid-2007, he called Edward Colligan, then president and CEO of Palm, to propose "an arrangement between Palm and Apple by which neither company would hire the other's employees," Colligan testified in a sworn deposition. When he refused, citing the deal's possible illegality, Jobs threatened to sue Palm for patent infringement. "I'm sure you realize the asymmetry in financial resources of our respective companies..." he wrote Colligan in a follow-up email. "My advice is to take a look at your patent portfolio before you make a final decision here." This isn't a case of a few hiring managers making employee retention easier. These are CEOs of some of the most powerful companies in the world -- the policies involved companies like Adobe, Intel, Intuit, and Pixar as well -- actively working to keep the cream from rising to the top if it meant doing so at another company. Beyond keeping one another from offering jobs to highly skilled employees of competitors, senior management discussed salary data to make sure everyone had similar budgets for raises. It's hard to get a raise when every business in town agrees to pay the exact same wage. Where is the free market in quantifying the value of someone's work, when a handful of people with all the power work together to create a glass ceiling for promotion and pay alike? It's a fascinating look at the darker side of the tech world. Head over to Mother Jones for more stories directly from these recently unsealed court documents. Very rarely do you get to look at an honest to god conspiracy among billionaires to suppress the growth of lower level talent in their industry. It reads like a paranoid rant on Facebook, only backed up with incredibly sad fact.
Apple may call Android founder Andy Rubin to the stand in upcoming Samsung trial
With Apple and Samsung's second trial slated to kick off next month, Apple may call Android founder Andy Rubin to the stand to testify. The news comes via a witness list Apple filed with the court last week. According to court documents, Rubin -- who formerly worked at Apple in the 80s -- may be called to testify on the development of Android features Apple believes infringe upon Apple's intellectual property. Rubin may also be called to comment on "Google documents relating to such development." Rubin is certainly a high profile witness, though you might recall that he no longer heads up Android at Google. In March of 2013, Rubin left the Android team to reportedly focus on robot oriented projects for Google. Other Google employees Apple indicated it may call to the stand include: Fred Quintana, a software developer at Google. Kenzo Fong Hing, Google's current Head of Android Marketing. Ann Hsieh, a User Experience Researcher at Google. Hiroshi Lockheimer, a Google VP of Engineering. Also on Apple's witness list is Helena Roeber, a User Experience expert who worked at Google from 2005-2012 where she spearheaded "all aspects of user research" on Android. As for Samsung's witness list, they plan to call Apple marketing chief Phil Schiller to the stand and possibly Scott Forstall as well. While both Schiller and Forstall testified at trial during Apple and Samsung's first legal go-round, Rubin would be a fresh face in the courtroom.
Apple and Samsung settlement talks fail ahead of March trial
In a final effort to avoid a second Apple/Samsung trial, Judge Lucy Koh last January ordered that Tim Cook, along with three to four members of Apple's in-house legal team, meet with Samsung executives in an effort to hammer out a settlement agreement. As initially planned, the aforementioned meeting of the minds was scheduled to go down on February 19. Now comes word via ZDNet Korea that the meeting actually took place last week where, surprise surprise, the two companies were unable to come to terms. Top executives of Samsung Electronics and Apple met last week in the US for a possible settlement in their ongoing legal battle but failed to reach an agreement, ZDNet Korea has learned. Local sources say JK Shin, head of Samsung's mobile division, and Apple CEO Tim Cook met in the US. While some assumed that Apple's victory in the first trial might have allowed them to put the squeeze on Samsung, it looks like the whole gang, including Phil Schiller and potentially Scott Forstall, will be headed back to court in just a few weeks.
Phil Schiller to testify in upcoming Apple/Samsung trial
With Apple and Samsung still bickering over their last trial, it's hard to believe that the two companies this March will begin a completely new patent infringement trial over a bevy of accused Samsung products. With the trial date steadily approaching, Phil Schiller will soon have to tuck in his shirt and don a suit as he will be called to testify, according to a recent report from from PC World. "Mr. Schiller will be called to testify regarding design, development, promotion, marketing, advertising, consumer demand for, and sales of the iPhone, iPad, iPod, and other Apple products, including the features accused of infringing the Samsung feature patents, the smartphone and tablet markets, the Apple brand and Apple's marketing and advertising efforts," Samsung said in a filing Thursday with the U.S. District Court for the Northern District of California. When the higher-ups at Apple take the stand, it's generally a good idea to pay close attention as you never know what type of nuggets may be divulged. During Apple and Samsung's first go-round, for example, Schiller testified that he was floored at how similar Samsung's products were to Apple's. "I was pretty shocked when I saw the Galaxy S phone and the extent to which it appeared to copy Apple's products," Schiller explained on the stand. Schiller further added, "My first thought was they're going to steal our whole product line." While there's no reason to believe that the two companies will reach a settlement agreement before trial begins, that isn't stopping Judge Lucy Koh from trying to facilitate such an agreement. Under court orders, Tim Cook and Samsung CEO Kwon Oh-hyun will meet on February 19 in a last-ditch effort to reach a compromise and avoid the time and expense of a completely new trial. Samsung further indicated that it may call Scott Forstall to take the stand as well. Apple and Samsung's first trial yielded a treasure trove of interesting tidbits, including information about the original iPhone development process along with photos of various iPhone prototypes. Perhaps the second trial will be just as enlightening.
Court rules that Apple can't get rid of antitrust monitor Michael Bromwich
Well it looks like Apple and antitrust monitor Michael Bromwich will have to put up with each other, for better or worse. Reuters reports the US Court of Appeals on Monday ruled that Bromwich can continue his monitoring duties even while Apple appeals his appointment to that position in the first place. The court articulated that Apple provided insufficient evidence to support the notion that allowing Bromwich to continue his duties as an antitrust monitor would cause Apple irreparable harm. The court was similarly unpersuaded by Apple's attempt to show that Bromwich was intent on expanding the scope of his court appointed duties. You might recall that Apple previously levied concerns that Bromwich was contacting Apple personnel who have nothing to do with any antitrust related matters, including board member Al Gore and Senior VP of Design Jony Ive. Gigaom adds: Monday's ruling amounts to a face-saving measure for U.S. District Judge Denise Cote, who has been criticized harshly in the Wall Street Journal for appointing Bromwich, who is reportedly her friend and political ally. The appeals court decision serves to remind Bromwich of the limits of his investigation, even as it sides entirely with Cote and the Justice Department. And so Bromwich will be getting back to work as Apple continues its appeal of Cote's decision.
Judge Lucy Koh rebukes Apple for evoking national prejudice while denying Samsung's motion for a retrial
During Apple and Samsung's November retrial on damages, a jury verdict found that Samsung owed Apple an additional US$290 million, bringing the final damages amount from the original summer 2012 trial to $930 million. In the wake of that verdict, Samsung cried foul, alleging, among other things, that Apple improperly invoked notions of racial prejudice in its closing arguments. In a motion seeking a reduction in damages or a new trial altogether, Samsung's argued in part: Apple's insidious "American-us versus foreign-them" theme permeated the trial. Apple's counsel referred to SEC employees as the "Korean bosses" of "Samsung America." Throughout trial, Apple gratuitously reinforced SEC's foreign status, rebranding it as "Samsung Korea," "Korean Samsung," the "Korean parent," and "the Korean company," or simply equating SEC with Korea. Apple injected additional reminders of "otherness," repeatedly pointing out when witnesses could not speak or read Korean and that certain Samsung engineers "don't speak English." By closing, Apple lumped all the defendants with "Samsung Korea," arguing that no "Samsung executive has been brave enough to come into this courtroom"... Meanwhile, Apple's counsel appealed to U.S. nationalism and local parochialism, describing the Bay Area as "the center of one of the most vibrant economies in the world," and threatening: "if we allow [the patent] system of law to decay, investors will not invest, people will not take risks, and our economy will disappear." His meaning was clear: accept Apple's arguments or a foreign company will destroy Silicon Valley business. This past week, Judge Lucy Koh issued a ruling denying Samsung's motion for a retrial of the retrial. I suppose the retrial madness has to stop somewhere, right? In any event, while Koh didn't buy into Samsung's allegations of racial prejudice, she did find the tone of Apple's closing argument to be somewhat "troubling." Indeed, the thrust of Samsung's racial and ethnic bias argument centers on Apple's aforementioned closing argument which reads as follows: We are extremely fortunate to live in what I'll call the Greater Bay Area. Not only is it beautiful, but we live in the center of one of the most vibrant economies in the world. Intel, Yahoo, Oracle, Facebook, eBay, and hundreds and hundreds of other companies, including Google, and including Apple, and these companies attract talented employees at every level. Even, we heard, Samsung has opened a research center here so that they can take advantage of the talent in this area. The companies provide jobs. They create technology that improves the way people work. And the company -- and this economy supports an education system that is second to none in the world, Berkeley, Stanford, San Jose State, U.S. [sic] Santa Cruz, even Santa Clara where I went to school. These educational institutions interact with this economy, interact with these companies and create a place that the whole world knows as Silicon Valley. But let's be equally clear about one thing. Our vibrant economy absolutely depends on fair competition. It depends on a patent system that encourages inventors to invent, it encourages investors to invest, and it encourages employers to hire. If we allow that system of law to decay, investors will not invest, people will not take risks, and our economy will disappear. When I was young, I used to watch television on televisions that were manufactured in the United States. Magnavox, Motorola, RCA. These were real companies. They were well known and they were famous. They were creators. They were inventors. They were like the Apple and Google today. But they didn't protect their intellectual property. They couldn't protect their ideas. And you all know the result. There are no American television manufacturers today. Koh, in her ruling, writes that the implications of Apple's statements are "troubling" and clearly suggest an "us versus them," "American vs. Non-American" mentality. What's more, Koh writes that the raw transcript by itself does not fully convey how the jury likely interpreted the above statements. This effect is minimized by the cold transcript, which elides counsel's strategic and effective pauses, timed in a way that created silence for listeners to connect the dots and make troubling inferences. Nonetheless, while Koh found Apple's closing argument to be worthy of a rebuke, she didn't find that Apple's conduct rose to a level that would warrant a mistrial. In this case, the Court finds that Apple counsel's statements at closing argument, while potentially evoking prejudice, do not meet the standard for two reasons. First, misconduct did not permeate the proceedings. Rather, the problematic comments were confined to a few seconds of the closing argument, which quickly came to an end upon Samsung's objection and this Court's admonishment to Apple's counsel to move on. As to Samsung's complaint that Apple routinely employed phrases like "Samsung Korea" throughout the entire trial, Koh writes that Samsung never complained about Apple's language choices as they happened. Indeed, Samsung only brought this issue to the court's attention after the trial ended. And with no evidence that the jury was persuaded or influenced by Apple's closing arguments, the retrial of the retrial has come to an end and we can now look forward to yet another mega-trial between these two tech giants slated to get underway next month. Meanwhile, recall that Tim Cook is slated to meet with Samsung CEO Kwon Oh-hyun on February 19 in a last-ditch effort to reach a settlement agreement. Koh's full ruling can be read below courtesy of FOSS Patents. 14-02-07 Order Denying Apple and Samsung's Motions for JMOL
Apple and Google band together and ask Supreme Court to help keep patent trolls at bay
Bloomberg reports that Apple, Google and 13 other companies are teaming up in an effort to convince the Supreme Court to make it easier to recoup attorneys fees stemming from frivolous patent suits. With more than US$140 billion in the bank, Apple is naturally an attractive target for patent trolls looking to make a quick buck. It therefore shouldn't come as much of a surprise that Apple is the most sued tech company on the planet. Indeed, Apple since 2009 has been hit with nearly 190 lawsuits from non-practicing entities alone. This February, the Supreme Court will hear two cases that center on a defendant's ability to recoup legal costs in patent suits. As it stands now, a defendant can successfully recoup its legal costs only when a case is found to have been "baseless' and "filed in bad faith." Apple and co. believe that the bar should be a tad lower. Apple told the justices that the company faces 228 unresolved patent claims and employs two attorneys just to respond to letters that demand royalties. The iPad maker, based in Cupertino, California, says it has been sued 92 times by patent-assertion entities in the last three years, settling 51 cases, with most of the rest pending. "Apple has rarely lost on the merits," the company said in court papers. "But victory figures as small consolation because in every one of these cases, Apple has been forced to bear its legal fees." And speaking of patent suits, FOSS Patents reported earlier today that Apple is being sued by a German patent firm called IPCom over a standard-essential patent relating to managing "access to overloaded wireless communication channels by handsets." The suit is seeking damages of $2.12 billion.
Apple and the DOJ square off in US Court of Appeals over antitrust monitor Michael Bromwich
Reuters reports that Apple appeared before the US Court of Appeals on Tuesday. The company argued before a three-judge panel that antitrust monitor Michael Bromwich's duties should be put on hold until a final determination can be reached regarding his role as an antitrust-compliance monitor. It's no secret that Apple and Bromwich's relationship has been rocky from the start, and Apple has been anything but shy about articulating why it wants him removed. Recall that Apple took issue with Bromwich's hourly rate (more than US$1,000 an hour) along with his efforts to meet with high-ranking Apple personnel, some of whom have nothing to do with anything e-book- or antitrust-related. The gist of Apple's argument was that allowing Bromwich to maintain his monitorship position will cause Apple irreparable harm if it's subsequently determined that his appointment was erroneous. "The court can't give us relief," Apple attorney Theodore Boutrous explained. "It can't turn back the clock. The DOJ, not backing down an inch, stressed that Apple, having already been found guilty of violating antitrust law, needs to fulfill the terms of its punishment "not a year from now, but today." While reports from the hearing indicate that the three-judge panel was receptive to Apple's concerns regarding Bromwich's "roving investigation," the same can't be said for Apple's assertion that Bromwich's interview requests are disruptive and soak up valuable employee time. "Maybe if they had spent some of their valuable time keeping the company from violating antitrust laws, perhaps they wouldn't be in this position," Judge Gerald Lynch said at the proceeding. Ouch. In an effort to broker some sort of compromise between the two parties, Lynch floated the idea that Bromwich's mandate be more carefully sculpted as to ensure he doesn't overstep his assigned task. Not surprisingly, Apple said it "would still oppose the monitorship as unnecessary." Apple is also appealing Judge Denise Cote's initial ruling, which found Apple guilty of colluding with a number of publishing houses to artificially raise the price of e-books.
Apple parts ways with external antitrust monitor, for now...
Just days after Judge Denise Cote ruled that Apple couldn't get rid of antitrust monitor Michael Bromwich, Retuers reports that a federal appeals court has granted Apple a temporary reprieve from its court-appointed monitorship. The 2nd U.S. Circuit Court of Appeals in New York granted Apple an "administrative stay" of the court order appointing the monitor, Michael Bromwich, while the company seeks permission for a longer stay during its appeal. In a brief order, the 2nd Circuit said a three-judge panel would hear Apple's motion for a stay pending appeal as soon as possible. It gave the government until January 24 to file opposition papers. The government did not oppose the request for an administrative stay. In short, Apple is hoping that they can put off supervision from Bromwich until a decision regarding Apple's appeal of the original ruling is reached. If you recall, Apple and Bromwich didn't exactly get off to a good start, with Apple levying complaints about Bromwich's hourly rate and his interest in securing interviews with top Apple executives and board members who have no involvement in the e-book case or antitrust matters at large. The DOJ, meanwhile, accused Apple of engaging in "character assassination."
