Trade Commission Told to Review Google Patent Ruling

Acting on an appeal by Microsoft, the U.S. Court of Appeals for the Federal Circuit found that the ITC erred in its reasoning when it found that the Google unit Motorola Mobility did not infringe a Microsoft graphical interface patent.

After a critical discussion of the ITC judge's reasoning, the appeals court said: "This conclusion requires reversal of the 133 patent non-infringement judgment."

But it also said it agreed with the ITC that Motorola Mobility had successfully changed its smartphones so they no longer infringed the patent.

It also found the ITC was correct in ruling that Motorola Mobility, which was acquired by Google during the legal fight, did not infringe three other patents.

The dispute is one of dozens globally between various smartphone makers. Google's Android system has become the top-selling smartphone operating system, ahead of mobile systems by Apple, Microsoft, Blackberry Ltd and others.

In the original case, the ITC found in May 2012 that Motorola Mobility infringed a patent for meeting-scheduling technology but did not infringe several other Microsoft patents. An order was issued banning infringing mobile phones from the marketplace.

Motorola Mobility says it removed the infringing software from its phones. Microsoft disagrees, and has filed a lawsuit against the U.S. Customs and Border Protection, accusing the agency of failing to properly enforce the ITC order.

Microsoft said it was happy with the appeals court decision.

"We're pleased the court determined Google unfairly uses Microsoft technology," said David Howard, corporate vice president and deputy general counsel. "Google is free to license our inventions, but we're equally pleased if Google makes product adjustments to avoid using them."

A Motorola Mobility spokesman also saw good news in the appeals court decision. "Today's favorable opinion confirms our position that our products don't infringe the Microsoft patents," said spokesman Matt Kallman.

U.S. courts continue to work during the shutdown of the federal government but the ITC is largely shut down.

The case at the ITC was No. 337-744. At the Federal Circuit, the case is No. 2012-1445, -1535.

(Reporting by Diane Bartz, editing by Ros Krasny, Gerald E. McCormick and John Wallace)

Tech Giants Fear Spread of Patent Wars to Europe

In the United States, technology companies like Google, Apple and Microsoft have spent years and hundreds of millions of dollars to defend patent-infringement lawsuits by companies that make a business of buying technology patents primarily for suing software companies and makers of products like smartphones. Now they worry that Europe could soon become a broad battleground for similar court battles.

In a letter to be sent to European officials on Thursday, 14 companies outline their concerns about a coming change that will give most of Europe a unified patent court system for the first time. So far, the technology industry has generally supported this pan-European effort as a better way to protect intellectual property, compared with the current thicket of country-by-country rules.

But in looking at the details of the new approach, tentatively scheduled to begin in 2015, the companies now fear that the new system could be vulnerable to what they call patent assertion entities, less politely known as patent trolls, which make a business of filing patent-infringement suits. Such companies say they play a valuable role in protecting innovators, but many corporations see the suits as frivolous and damaging. In the United States, the Federal Trade Commission has a patent-troll investigation under way.

In interviews, executives of some of the companies that sent the letter said one of their concerns was that court-shopping by patent trolls in some smaller European countries could turn parts of the Continent into the equivalent of the Eastern District of Texas. That federal court jurisdiction has become an American capital of patent litigation known for sympathetic juries and speedily moving cases.

In one notable case there, in 2010, a jury awarded an obscure company more than $600 million in a lawsuit against Apple related to its operating systems, although the award was eventually overturned by the trial judge, and by the United States Supreme Court this year. A host of companies also had to fend off a suit in East Texas filed by a company that claimed to have invented the “interactive Web.”

“Unprincipled plaintiffs would be able to extract substantial royalties” through settlements or verdicts “from European and other companies based on low-quality and potentially invalid patents,” the letter said.

The letter was signed by 14 corporations, including Apple, BlackBerry, Cisco, Google, Hewlett-Packard, Intel, Microsoft, Samsung and Yahoo. It was also signed by some big European companies — like Adidas, Deutsche Telekom and Telecom Italia — and was provided to The New York Times by the companies.

Top officials drafting the rules of the new court system said they were listening to the industry’s concerns — which is perhaps no surprise, since several people involved in the drafting process work for law practices or lobbying firms that count such companies as clients.

Some officials suggested that the concerns were overblown.

“I don’t see it as a major problem at all,” said Kevin Mooney, a British patent lawyer who is the chairman of a drafting committee that is advising a panel set up to oversee the creation of the court system. “We have one set of procedures for all these courts,” he said. “It would be nonsense if we allowed one court, Romania, say, to become the Eastern District of Texas.”

Some companies say the new European system is being too heavily influenced by the German model, which requires that the legal question of whether a patent is valid be handled as a separate issue from whether one patent infringes on another. Breaking cases apart in that way can sometimes enable litigants to obtain a ruling on an infringement suit even before a court has determined whether a patent is valid.

In the letter, the companies say the latest draft of the European patent rules may create “significant opportunities for abuse” because it would allow separate rulings in different courts on whether patents have been infringed and whether they are valid.

Germany has already been a tech-patent battleground. Last year, after Microsoft moved a logistics center to the Netherlands from Germany, the company cited the potential impact of a patent lawsuit filed in Germany by Motorola Mobility as its reason for moving. And Deutsche Telekom had to pay this year to settle patent-infringement claims brought by IPCom, a company that holds more than 1,000 patents.

Mr. Mooney said the European system would be less rigid than the German system and would rely on the discretion of judges.

F.T.C. Targets Patent Companies

The action is only the first step in what is likely to be a lengthy and broad investigation, which could eventually result in antitrust lawsuits against the companies.

Edith Ramirez, the chairwoman of the F.T.C., said in June that she believed there is little real evidence about the costs and benefits of a rising tide of patent litigation.

By a 4-to-0 vote, the commission agreed to seek public comments on an investigation of “approximately 25 companies that are in the business of buying and asserting patents,” the agency said in a statement. It also will look at about 15 other companies that assert patents in the wireless communications industry, including manufacturers of smartphones.

After reviewing public comments, the trade commission will seek to issue subpoenas to the patent assertion entities, which are also known, unflatteringly, as “patent trolls.”

“Patents are key to innovation and competition, so it’s important for us to get a better understanding” of how the entities operate, Ms. Ramirez said in the statement Friday.

She said the Federal Trade Commission Act allows the agency to gather information about the financial operations of the companies, and it will seek to uncover how much they earn from patent lawsuits and licensing and how the profits are distributed to investors.

That information can form the basis of antitrust lawsuits, among other actions.

The purpose of the inquiry is “to expand the empirical picture on the costs and benefits” of the companies’ activity, Ms. Ramirez said. “What we learn will support informed policy decisions.”

The New York Times reported in June that Ms. Ramirez was trying to get the approval of the full commission to begin issuing subpoenas to the companies, which accounted for more than 60 percent of the 4,000 patent lawsuits filed in 2012. That figure was up from 29 percent two years earlier.

President Obama also has called for the federal government to ascertain how patent assertion entities are operating; he directed executive agencies to take steps to “protect innovators from frivolous litigation.”

The companies that are generally pointed to as the largest of the litigators say that while there is abuse of patents in some sectors, they are not themselves involved in frivolous litigation.

Patent assertion entities span a spectrum. On one end are companies that are essentially legal shells that send letters to businesses claiming infringement and demanding payments; in 2011, for example, such a company targeted coffee shops for setting up Wi-Fi networks for customers.

At the other end are companies like Mosaid Technologies and Intellectual Ventures, which buy large portfolios of patents from technology companies like Microsoft and Nokia, using them to generate licensing payments that run to the millions of dollars.

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Patent Case Has Potential to Give Apple the Upper Hand

But if a final ruling in a case against Samsung goes Apple’s way on Friday, Apple would clearly hold the momentum in the patent disputes engulfing the mobile market.

The federal International Trade Commission is expected to say on Friday whether it will uphold a preliminary finding that Samsung mobile products violated a handful of Apple patents. A decision against Samsung by the commission could result in an import ban on some of the company’s mobile devices.

A decision for Apple would be its second major legal win against Samsung in less than a week. On Saturday, the Obama administration vetoed the federal commission’s ban on Apple mobile products in a separate case brought by Samsung.

That rare move — the first time for such a veto since 1987 — was a major victory for Apple and other companies that had argued that disputes over a class of patents known as standards-essential patents should not lead to import bans by the trade commission.

Carolina Milanesi, a Gartner analyst, said that if Apple were to score a second victory with the International Trade Commission this week, the company would climb to a significant position of power in patent feuds — not just against Samsung, but against other companies as well.

“Apple can use that as a warning and say, ‘Look, if it hasn’t worked with Samsung, why would it work with you?’ ” she said. “It’s not real power. It’s more like a mind game.”

The patent disputes have led to a possible political skirmish between the United States and South Korea, where Samsung is a celebrated hometown legend. The decision on Saturday vexed the South Korean government, which issued a statement expressing concern that the ruling may have violated Samsung’s patent rights. The government pledged to watch the commission’s ruling on Friday in the separate case for fairness.

Essential patents, like those at the center of the dispute in Saturday’s veto, cover basic technologies that companies have to support in their products to comply with industry standards. In the case between Apple and Samsung, the standard involved wireless communications. The Obama administration said it overruled the decision on Saturday partly because it feared essential patents, which holders agree to license on reasonable terms, were being used in ways that could hurt competition and consumers. Apple and Samsung disagreed on whether Samsung was offering to license it essential patents on reasonable terms.

The decision on Friday is not over essential patents. But if the commission hands Apple another victory, Robert P. Merges, a law professor at the University of California, Berkeley, said the Obama administration could again overrule any import ban the commission puts in place, as part of a strategy to diminish the power of patent litigation as an industry weapon.

“I think there are a lot of political implications,” he said, referring to the possible reaction by other governments. “You’ll have the obvious favoring-the-home-team problem. But I would be shocked if they didn’t think this through carefully.”

Kristin Huguet, an Apple spokeswoman, declined to comment on the case before the commission’s decision. David Steel, an executive vice president for Samsung, declined to comment.

Already, Apple has scored the biggest legal victory by far, by winning against Samsung in a federal court last year. In that case, a jury awarded Apple $1 billion in damages for violations of mobile patents related to the iPhone and iPad. That award was later reduced to $599 million by a judge, though the figure could go back up as the case drags on in court.

Although the case was a decisive win for Apple, the judge overseeing it denied a request by Apple for a permanent injunction against the sale of some Samsung mobile products. A Federal Appeals Court is expected to hear arguments on Friday from Apple about why such an injunction should be granted.

In another positive development for Apple, a Federal Appeals Court sent a patent case that Apple brought against Motorola Mobility, which is owned by Google, back to the trade commission this week. The ruling gives Apple another shot at winning an important ban on Motorola mobile products after the commission dismissed Apple’s complaint.

Apple has long argued that companies making smartphones based on Google’s operating system, especially Samsung, are copycats that have swiped many of the technical innovations that, at one point, gave the iPhone and iPad a huge edge.

But the wheels of justice grind along slowly, and as Apple’s suits have snaked their way through the courts in the last several years, the popularity of Android phones has continued to grow, swallowing much of the mobile market. In the second quarter of the year, Android phones accounted for almost 80 percent of global smartphone shipments, up from just under 70 percent the year before, according to IDC, the research firm.

The iPhone accounted for 13.2 percent of smartphone shipments in that same period, while Samsung’s share was 30.4 percent, IDC estimated.

It is unclear whether a series of legal setbacks would be more than a speed bump for Samsung, now the world’s largest mobile phone maker. Samsung has argued that it can modify the software in its phones so they steer clear of Apple’s patents, which could allow it to dodge sales bans.

Still, if the tide of legal battles begins to shift decisively in Apple’s favor, the company could extract a juicy financial settlement from Samsung and put the distraction of fighting its biggest rival behind it.

E.U. Rules Against Patent Play by Google’s Motorola Unit

The finding, which could lead to a steep fine, comes as the commission tries to ensure that companies do not wield their patent portfolios to block others from using the technologies vital to developing some of the most popular consumer electronics.

“I think that companies should spend their time innovating and competing on the merits of the products they offer — not misusing their intellectual property rights to hold up competitors to the detriment of innovation and consumer choice,” Joaquín Almunia, the European Union’s competition commissioner, said in a statement.

Motorola Mobility obtained an injunction from a German court preventing Apple from using patents called standard-essential for the industry.

The commission said it regarded some injunctions to enforce patent claims as legitimate. But it said that holders of standard-essential patents who had already agreed to fair, reasonable and nondiscriminatory licensing terms had to meet certain standards before resorting to injunctions.

Google referred questions to Katie Dove, a spokeswoman for Motorola, who said the company had followed the procedure in a German court ruling.

“We agree with the European Commission that injunctions should only be sought against unwilling licensees,” Ms. Dove said in a statement.

Motorola has two months to respond to the charges.

Of concern to regulators in Europe is how certain national courts, in particular in Germany have made it relatively easy to win injunctions in such cases, and how that could eventually result in a manufacturer having to take a popular device off the market.

“The patent wars are now widespread,” said Michael A. Carrier, a Rutgers Law School professor who specializes in antitrust law. “But there hasn’t yet been an injunction that has really taken phones out of people’s pockets, and that’s probably one thing that the Europeans are probably really worried about.”

Google completed its acquisition of Motorola Mobility last year to take advantage of patents to bolster its Android operating system. Google picked up 17,000 patents, including many relating to wireless devices that Motorola, a pioneer in the wireless phone business, had pledged to license on reasonable terms.

Those commitments were made to technology standards organizations, intended to assure that basic technical innovations were widely available, stimulating growth in the industry.

While virtually all the major tech companies have sought legal or regulatory intervention, one of the biggest battles has been between Apple and Samsung, the South Korean maker of smartphones and tablets. Apple has complained about Samsung’s using designs and packaging from the iPhone and iPad while Samsung has accused Apple of infringing its wireless telecommunications patents.

Samsung came under formal investigation by Mr. Almunia late last year for the way it has used standard-essential patents and sought injunctions against its competitors.

Google’s acquisition of Motorola Mobility, worth about $12.5 billion, won regulatory approval in Europe last year. But in a warning at the same time, Mr. Almunia said his decision to approve that acquisition would not exonerate any wrongdoing by Motorola in the past.

Mario Mariniello, a competition expert at Bruegel, a research organization in Brussels, said the case is a difficult one to decide. “That judgment may be very difficult,” he said, “but the commission still looks like it wants to set a strong precedent in this case by punishing Motorola for making it so difficult for Apple to win a license.”

He added that “for an injunction to be abusive, so much depends on a licensee, like Apple in this case, showing that it was actually willing to pay a fair price for the technology.”

Mr. Almunia announced formal investigations last April against Motorola Mobility after complaints by Apple, which is concerned about access to other wireless patents for the iPhone and iPad, and by Microsoft, which is concerned about access to video and wireless patents for its products including the Xbox.

On Monday, Mr. Almunia’s department said in a statement that the Motorola Mobility injunction against Apple could amount to “an abuse of a dominant position prohibited by E.U. antitrust rules.” E.U. officials said they were still considering whether to act on Microsoft’s complaint.

Much of the behavior under investigation in this case occurred before Google purchased Motorola Mobility, according to E.U. officials. But Google, as the parent company, may still face costs to cover any fine incurred by Motorola for any past behavior and continuing harm to Apple.

Google has already settled a similar case in the United States by agreeing to license its standard-essential patents to other companies on “fair and reasonable” terms. It also agreed not to seek court injunctions to halt the shipment of smartphones, tablets and other devices that use its standard patents.

This article has been revised to reflect the following correction:

Correction: May 6, 2013

An earlier version of this article misstated the timing of the American and European approval of Google’s acquisition of Motorola Mobility. It was in February 2012, not February of this year. 

Bits Blog: Intertrust Sues Apple, Charging Patent Violations

Intertrust, a company that nabbed a huge settlement over patents in a lawsuit with Microsoft nearly a decade ago, has turned its focus to Apple, suing the technology giant on Wednesday and charging infringements of its security and content protection patents.

Intertrust, which is largely owned by Sony and Philips, sued Apple in Federal District Court in the Northern District of California, claiming it violated more than a dozen patents throughout its product lines, including the iPhone, Apple TV, iPad, iPod and Macintosh computers. Intertrust is best known as an early developer of digital rights management technologies — software that is used to prevent unauthorized access to music, movies, apps and other forms of electronic content.

In its complaint, Intertrust alleges that the security technology used on Apple devices infringes its patents, which have titles like “Techniques for Defining, Using and Manipulating Rights Management Data Structures”; “Systems and Methods Using Cryptography to Protect Secure Computing Environments”; and “Systems and Methods for Secure Transaction Management and Electronic Rights Protection.”

“No other entity uses Intertrust technologies so extensively at so many levels of its enterprise,” the company said in its complaint.

Steve Dowling, an Apple spokesman, declined to comment, citing the company’s policy of not commenting on pending litigation.

Apple and other big technology companies with deep pockets are often targets for patent lawsuits (and sometimes initiators of them). A particular irritant to these tech companies is a class of plaintiffs pejoratively called “patent trolls,” which dedicate most of their energies to suing rather than making products.

But Intertrust does not quite fit that profile. The company has been around since the early 1990s, went public in the late 1990s and was taken private in 2003 through a deal that resulted in Sony and Philips owning the vast majority of the company. The company has teams of programmers that work on security software and services, according to Talal Shamoon, chief executive of Intertrust.

“We have a very focused mission around trust and security and around open platforms,” Mr. Shamoon said. “We’re not a troll by any stretch of the imagination.”

Litigation is also rare for Intertrust, which previously has sued only one other company, Microsoft, for patent infringement, according to Mr. Shamoon. That lawsuit resulted in a $440 million settlement from Microsoft in 2004. Intertrust has reached patent licensing agreements with Adobe, HTC, Samsung and others.

Mr. Shamoon said he had sought to negotiate similar licensing deals with Apple for years but the conversations never went anywhere. “You have a culture over there where they see the courtroom as an extension of the conference room,” he said.

“I have a lot of respect for the company,” Mr. Shamoon added. “I’ve been using their equipment for years. But you can’t be the only person on earth who ever invented anything.”

Mr. Shamoon said that Sony and Philips had not directed Intertrust to go after Apple in court to further their own strategic objectives. “This is not some proxy war between big companies,” he said.

In Google Patent Case, F.T.C. Set Rules of Engagement for Battles

Yet even as Google made only a few voluntary promises on search, it agreed to a legal settlement on patents that Jon Leibowitz, the commission chairman, called a “landmark enforcement action” that applies to huge high-tech markets like smartphones and tablet computers.

The commission action by no means spells the end of the smartphone patent wars, a global conflict in which major corporations including Apple, Samsung and Google have spent billions amassing patent portfolios and then suing and countersuing one another in courts around the world. But legal experts say Google’s settlement with the F.T.C. signals progress in clarifying the rules of engagement in high-tech patent battles, and thus could ease them.

“The agreement represents a significant stride forward in reducing the confusion and uncertainty that currently surrounds how these patents can be used,” said Colleen Chien, a patent expert at the Santa Clara University School of Law.

The commission’s settlement with Google, announced on Thursday, focused on patents covering communications and data transmission technologies that are crucial for the basic operation of smartphones and tablets — what are known as standard-essential patents. (There are many other patents in mobile devices, covering physical design and software features.) The legal gamesmanship of the epic smartphone patent battles, according to economists and technology experts, consumes time and investment that could be better used to develop new products. In his comments on Thursday, Mr. Leibowitz pointed to those concerns. “Today’s commission action,” he said, “will also relieve companies of some of the costly and inefficient burden of hoarding patents for purely defensive purposes, savings that we hope can be invested in job-creating research and development.”

Under the settlement, Google agreed to license its standard-essential patents to other companies on “fair and reasonable” terms. It also agreed not to seek court injunctions to halt the shipment of smartphones, tablets and other devices that use its standard patents.

The issue arose from Google’s $12.5 billion purchase of Motorola Mobility, announced in 2011 and completed last year. Google acquired Motorola partly to defend itself and the smartphone makers that use its Android software after rivals had already loaded up on patents.

With the acquisition, Google picked up 17,000 patents, including many relating to wireless devices that Motorola, a pioneer in the wireless phone business, had pledged to license on reasonable terms. Those commitments were made to technology standards organizations, intended to assure that basic technical innovations are widely available, stimulating growth in the industry.

Over the years, according to Mr. Leibowitz, companies took Motorola at its word and developed products assuming they could routinely license Motorola’s patents. But Motorola later refused to license its standard-essential patents and sought court injunctions to stop shipment of rival products.

“After Google purchased Motorola,” Mr. Leibowitz said, “it continued these same abusive practices.”

In recent months, the F.T.C. has issued position papers and filed friend-of-the-court briefs, opposing the motions for injunctions using standard patents. The Justice Department and European regulators have echoed the commission’s stance.

“Regulators around the world have become increasingly sensitive to just how important technical standards and standards-setting bodies are to the modern system of economic innovation,” said Josh Lerner, an economist at Harvard Business School.

The threat of court injunctions to stop shipment of products, economists say, is the factor that drives up the cost of patent wars. Because an injunction could be devastating, companies will pay dearly to remove that risk, settling with a plaintiff or spending on patents to build a defensive arsenal.

Some courts have recently resisted granting injunctions based on standard patents. Google’s settlement with the F.T.C., said Carl Shapiro, a former chief economist in the Justice Department’s antitrust division, “helps solidify the move to stop injunctions in standard-essential patent cases, which is great.”

Dr. Shapiro, a professor at the University of California, Berkeley, said that courts had also been more hesitant recently to grant injunctions in cases that did not involve standard patents. In suits involving smartphones and tablets — amalgams of hardware, software and telecommunications technologies covered by many thousands of patents — judges are sometimes less likely to halt the shipment of a device based on a few infringing patents.

Last month, for example, Lucy Koh, a Federal District Court judge in San Jose, Calif., denied Apple’s motion for an injunction against Samsung products. In August, a jury in that court found that Samsung products infringed on a handful of Apple design and software patents, and awarded Apple $1.05 billion in damages.

Judge Koh declined to grant Apple’s motion for injunction, essentially saying that Apple’s claim was outweighed by the public interest in keeping Samsung shipments flowing. Apple is appealing the ruling.

“The courts seem to be moving toward taking a dimmer view of injunctions generally,” Dr. Shapiro said. “That’s a big deal.”

Patent Office Rejects Apple Patent Used Against Samsung

The United States Patent and Trademark Office has dealt a blow to Apple in its legal battle with Samsung Electronics over smartphone patents, declaring that a patent that helped Apple win $1.05 billion in damages against Samsung in a jury trial should not have been granted.

The patent office’s action this week was made public by Samsung in a filing on Wednesday in Federal District Court in San Jose. In the court document, Samsung, the Korean electronics giant, said the action should be weighed in evaluating its petition for a new trial and its challenge to the damages award.

Apple is expected to appeal the patent office’s ruling, so the patent has not been invalidated yet.

The patent, No. 7,844,915, is one of six that a jury in August found that Samsung had infringed. It covers usability software that distinguishes between single-touch and multitouch gestures on a smartphone or tablet screen.

The patent is widely known as the “pinch to zoom” patent, but the software is actually narrower in scope. Apple’s legal documents refer to it as controlling a “scroll versus gesture” feature.

Of the six patents that were the basis of the ruling against Samsung, this is the second that the patent office has concluded, on re-examination, should not have been granted.

In October, the office came to the same conclusion about the patent for Apple’s “rubber-banding” or “bounce” feature, which makes a digital page bounce when a user pulls a finger from the top of the touch screen to the bottom.

“It’s a strike against Apple, but it is far from the whole ballgame,” said Mark A. Lemley, a Stanford Law School professor.

Apple is likely to challenge the patent office’s action this week, as it did the October decision.

If the patent office’s rejections hold up after Apple makes its appeals, the court could grant Samsung’s motion for a new trial. It is more likely, however, that the damages award will be considerably reduced, said James Bessen, a patent expert at the Berkman Center for Internet and Society at Harvard University.

U.S. Disavows Patent at Center of Apple-Samsung Dispute

The United States Patent and Trademark Office has decided that one of the smartphone patents at the center of the legal dispute between Apple and Samsung Electronics — which resulted in a jury award to Apple of $1.05 billion — should never have been granted.

The patent office decision is an initial ruling, in a document dated Oct. 15, and filed electronically on Monday, and probably will be challenged by Apple. It affects the patent for Apple’s “rubber-banding” or “bounce” feature, which makes the digital page bounce when a user pulls a finger from the top of the touch screen to the bottom.

If the patent office ruling withstands challenges by Apple, it could be used to roll back the $1.05 billion in damages in the California case and strengthen Samsung’s hand in settlement talks with Apple, said James E. Bessen, a lecturer at the Boston University School of Law. The patent office’s action, patent specialists say, shows that the office, and not only courts around the world, will be an important front in the smartphone patent wars. These legal clashes mainly pit Apple against companies that use Google’s Android software for smartphones, including Samsung, HTC and Motorola Mobility, which Google acquired last year.

The patent office ruling was first reported Tuesday by Florian Müeller, a patent analyst and blogger based in Germany.

The decision to invalidate the Apple patent was made under longstanding procedures for re-examining previously granted patents.

Under the America Invents Act, which was passed last year, the post-grant review process is being strengthened and applies to patent re-examination requests filed after Sept. 16.

Patent specialists say the new rules will make it more likely that courts will wait until the patent office has finished studying whether a patent should be invalidated. And the new law gives the director of the patent office the power to order that a patent be re-examined.

“The patent office now has the opportunity to actually take the lead rather than following the courts,” said Arti K. Rai, a professor at Duke University School of Law and a former external affairs administrator at the patent office. “This has the potential to be a really important way to try to curb the problems with existing patents.”

A major problem, according to patent specialists, is that the patent office grants patents too easily in the first place. That is particularly the case, they say, with certain kinds of patents, including those on software. Unlike pharmaceuticals, where a single clearly defined molecule can be the patented invention, software patents often describe digital concepts carried out in code. In software, the boundaries are less clear, and innovation tends to be step-by-step, building on years, sometimes decades of work.

Big technology companies, patent specialists say, have exploited the complexity and uncertainty of software to amass large portfolios of patents.

Frontline patent examiners, working under tight time pressure, they say, tend to be outmatched by wealthy companies when patents are filed. But post-grant review affords another, more painstaking look. “It gives the patent office the ability to focus on the patents that really matter,” said Colleen Chien, an assistant professor at the Santa Clara University Law School.

The patent office’s re-examination team issued its invalidation decision on patent 7,469,381. It was one of the six patents that formed the basis of the jury verdict against Samsung in a federal court in San Jose, Calif.

The patent is at the center of Apple’s intellectual property strategy in smartphones and tablets of patenting user-experience software. Upon review, the patent office determined that the idea and the bounce feature had been invented earlier, even if the pointing device was not a finger on a touch screen.

Before the California trial, Samsung had made a change to sidestep the Apple patent on its newest smartphones. The same finger stroke brings a blue glow at the bottom of the screen, not a bounce.

This week, Samsung filed a copy of the patent office’s initial invalidation ruling on the Apple patent with the judge in the California case, Judge Lucy Koh. Samsung has asked that Judge Koh overrule the jury. And the company is appealing the entire verdict.

The Android camp has filed other requests to re-examine Apple smartphone patents with the patent office.

In a statement, Allen Lo, Google’s deputy general counsel, said: “The patent office plays a critical role in ensuring that overly broad patents cannot be used to limit consumer choice. We appreciate the care the patent office has taken in re-examining dubious software claims."

Apple did not respond to an e-mail request for comment.

Bits Blog: In the High-Tech Patent Wars, an Inventor's Lament

Peter DaSilva for The New York Times Stephen G. Perlman worked at Apple in the 1980s. Today, he runs a start-up incubator called Rearden in San Francisco, and he says that patents are crucial to his business.

A long, narrative article we ran last week on the challenges facing the patent system, “The Patent, Used as a Sword,” prompted a lot of comments, and we posted more than 275 of them.

But I thought it might be worthwhile to present one more — an extended commentary from one of the sources who made a cameo appearance in the piece, Stephen G. Perlman. In the article, Mr. Perlman was a counterpoint to the main focus of the piece, which was big companies using patents as tools and weapons in the smartphone patent wars. (What he says below comes from both earlier interviews, and a lengthy e-mail he sent after the article ran.)

Mr. Perlman is a successful inventor and entrepreneur. He helped design Apple’s Quicktime multimedia software. Over the years, his start-up ventures have ranged from WebTV, for bringing Internet services to television (sold to Microsoft in 1997 for $425 million), to Mova, for producing extraordinarily detailed computer-generated facial imagery like the reverse-aging of Brad Pitt’s face in “The Curious Case of Benjamin Button,” which won an Academy Award.

The latest creation of his San Francisco invention factory, Rearden, is a technology called DIDO, which Mr. Perlman thinks promises a breakthrough in wireless communications — speeds of more than 100 times faster than current cell networks, without the need for cell towers.

Mr. Perlman holds about 100 granted patents with roughly the same number of applications pending. He knows what each patent does, and has never sold one. “It’s a very different breed of patent,” he said, “than we’re seeing with the clash of the smartphone titans, with truckloads of patents for minor sub-features being bought and sold like commodities.”

“There are patents, and then there are fundamental patents,” he added. “In my world, we deal with fundamental patents.”

The different breeds of patents, according to Mr. Perlman, reflect different kinds of innovation. Most innovation is incremental, he says. “Incrementalism is 99 percent of what corporate research and development does,” Mr. Perlman said, adding:  ”Heavens, that is not to say it isn’t vitally important. Where would we be without it.”

What Mr. Perlman labels incrementalism is what others call integrated innovation. By that, they mean that increasingly complex products, like smartphones, are triumphs of melding many different technologies — each, to be sure, a smallish step rather than breakthrough.

Again, Mr. Perlman does not belittle the incremental path. Speaking of smartphones, he said, “Man, it’s incredible what they’ve done.”

But, Mr. Perlman wrote in an e-mail: “The problem is that fundamental patents are lumped together with incremental patents. And, as the world is trying to mitigate the over-litigation of incremental patents and patent offices are buried under them, little guys like us are just being steamrolled over. And it’s not accidental steamrolling.”

“Incumbents with a deep vested interest in maintaining the status quo,” he continued, “see the screwed-up patent system as a means to disrupt our ability to bring breakthroughs to market.”

That kind of big-company gamesmanship played a role, Mr. Perlman suggests, in the recent bankruptcy of one of his start-ups, OnLive. The company had developed a wireless streaming technology for delivering online games and office productivity applications to tablet computers, with photo-realistic images and high-speed performance. In a review earlier this year, David Pogue of The Times called OnLive “jaw-dropping, extremely polished technology.”

Part of the problem for OnLive, Mr. Perlman said, was that it was five years before government patent examiners looked at the application for its basic patent — and three years more before it was granted. All the while, Mr. Perlman said, OnLive could not enforce its patent or use its patent asset to help raise further funding.

In August, OnLive went through a form of bankruptcy, called assignment for the benefit of creditors, and shareholders including Mr. Perlman lost their investment and employees were laid off. The OnLive service continues to operate.

The iEconomy: In Technology Wars, Using the Patent as a Sword

For three decades, Mr. Phillips had focused on writing software to allow computers to understand human speech. In 2006, he had co-founded a voice recognition company, and eventually executives at Apple, Google and elsewhere proposed partnerships. Mr. Phillips’s technology was even integrated into Siri itself before the digital assistant was absorbed into the iPhone.

But in 2008, Mr. Phillips’s company, Vlingo, had been contacted by a much larger voice recognition firm called Nuance. “I have patents that can prevent you from practicing in this market,” Nuance’s chief executive, Paul Ricci, told Mr. Phillips, according to executives involved in that conversation.

Mr. Ricci issued an ultimatum: Mr. Phillips could sell his firm to Mr. Ricci or be sued for patent infringements. When Mr. Phillips refused to sell, Mr. Ricci’s company filed the first of six lawsuits.

Soon after, Apple and Google stopped returning phone calls. The company behind Siri switched its partnership from Mr. Phillips to Mr. Ricci’s firm. And the millions of dollars Mr. Phillips had set aside for research and development were redirected to lawyers and court fees.

When the first lawsuit went to trial last year, Mr. Phillips won. In the companies’ only courtroom face-off, a jury ruled that Mr. Phillips had not infringed on a broad voice recognition patent owned by Mr. Ricci’s company.

But it was too late. The suit had cost $3 million, and the financial damage was done. In December, Mr. Phillips agreed to sell his company to Mr. Ricci. “We were on the brink of changing the world before we got stuck in this legal muck,” Mr. Phillips said.

Mr. Phillips and Vlingo are among the thousands of executives and companies caught in a software patent system that federal judges, economists, policy makers and technology executives say is so flawed that it often stymies innovation.

Alongside the impressive technological advances of the last two decades, they argue, a pall has descended: the marketplace for new ideas has been corrupted by software patents used as destructive weapons.

Vlingo was a tiny upstart on this battlefield, but as recent litigation involving Apple and Samsung shows, technology giants have also waged wars among themselves.

In the smartphone industry alone, according to a Stanford University analysis, as much as $20 billion was spent on patent litigation and patent purchases in the last two years — an amount equal to eight Mars rover missions. Last year, for the first time, spending by Apple and Google on patent lawsuits and unusually big-dollar patent purchases exceeded spending on research and development of new products, according to public filings.

Patents are vitally important to protecting intellectual property. Plenty of creativity occurs within the technology industry, and without patents, executives say they could never justify spending fortunes on new products. And academics say that some aspects of the patent system, like protections for pharmaceuticals, often function smoothly.

However, many people argue that the nation’s patent rules, intended for a mechanical world, are inadequate in today’s digital marketplace. Unlike patents for new drug formulas, patents on software often effectively grant ownership of concepts, rather than tangible creations. Today, the patent office routinely approves patents that describe vague algorithms or business methods, like a software system for calculating online prices, without patent examiners demanding specifics about how those calculations occur or how the software operates.

As a result, some patents are so broad that they allow patent holders to claim sweeping ownership of seemingly unrelated products built by others. Often, companies are sued for violating patents they never knew existed or never dreamed might apply to their creations, at a cost shouldered by consumers in the form of higher prices and fewer choices.

“There’s a real chaos,” said Richard A. Posner, a federal appellate judge who has helped shape patent law, in an interview. “The standards for granting patents are too loose.”

Almost every major technology company is involved in ongoing patent battles, but the most significant player is Apple, industry executives say, because of its influence and the size of its claims: in August in California, the company won a $1 billion patent infringement judgment against Samsung. Former Apple employees say senior executives made a deliberate decision over the last decade, after Apple was a victim of patent attacks, to use patents as leverage against competitors to the iPhone, the company’s biggest source of profits.

Verizon to Pay $250 Million to TiVo in Patent Settlement

TiVo has turned to litigation to generate revenue from licensing fees as it struggles with competition from low-cost rivals.

Analysts said the settlement could bode well for a TiVo victory in cases against other companies, including Time Warner Cable and Motorola Mobility, which is now owned by Google. TiVo reached a similar deal in January with AT&T, which agreed to pay $215 million.

TiVo also prevailed in a similar case against Dish Network and EchoStar in May 2011. Verizon declined to comment and referred questions to TiVo.

Regarding the continuing legal cases, “Verizon has set a strong precedent for Motorola to settle,” said Todd Mitchell, an analyst at Brean Murray, Carret, a boutique investment bank.

TiVo sued Time Warner Cable in connection with the Motorola litigation, and Monday’s settlement only improves the company’s position, according to Barton Crocket, an analyst at Lazard Capital Markets.

“It also potentially sets the stage for a similar settlement with Time Warner Cable over the next year or so,” Mr. Crockett said.

Time Warner Cable declined to comment on Monday. Motorola Mobility had no immediate comment.

TiVo said Verizon would initially pay $100 million in cash, and recurring quarterly payments totaling $150.4 million through July 2018.

As part of the deal, the companies were discussing having TiVo boxes carry a new Internet video streaming service that Verizon is developing with Coinstar’s Redbox to compete with Netflix. TiVo’s DVRs already feature video services from Netflix and Amazon.com.

In addition to the guaranteed compensation, Verizon will pay TiVo license fees on a monthly basis through July 2018 for each Verizon DVR subscriber above a certain number.

If Verizon and TiVo pursue “certain commercial initiatives” by Dec. 21, up to $29.4 million of the payments made by Verizon would be subject to a credit of an equal amount, TiVo said.

This appears to refer to a nonexclusive deal for Verizon to offer TiVo boxes to customers, according to Mr. Mitchell of Brean Murray.

The companies also agreed to dismiss all pending litigation between them.

Bits Blog: The Patent Clues to the Apple iPhone Beyond '5'

Bigger screen, longer battery life, clever new features. It’s another version of the iPhone, waiting in the wings to be announced on Wednesday, as everyone expects.

But for a look at Apple’s longer-term ambitions for the iPhone, take a stroll through its patent portfolio. That is what the Thomson Reuters intellectual property group did for a report released on Tuesday, “Inside the iPhone Patent Portfolio.”

For example, Apple filed a patent application in 2010 for a miniature fuel-cell power supply that could power an iPhone or iPad for days or weeks without recharging. It’s the same hydrogen fuel-cell technology now used in some hybrid electric buses, especially in Europe, said Bob Stembridge, an analyst for Thomson Reuters.

“It’s just drastically scaled down for mobile devices,” he said.

Another patent filing in 2010 is for a sort of supersmart multimedia hypertext. It’s a feature for tapping on a word in text on a touch screen, and related information pops up. The extra information could be in most any form — text, pictures, audio or video. A drawing in the patent application shows a finger touching the word “apple,” as in a “big juicy red apple.” The software apparently both understands the context and fetches related content — a picture of an apple, according to the patent application drawing.

The Thomson Reuters report finds, as you might expect, a surge of innovation, patents filed and litigation at Apple since the iPhone was introduced in 2007. Thomson Reuters said that Apple filed 1,200 patent applications since then, and there are 479 lawsuits in which Apple is involved in one way or another, worldwide.

Though not in the report, Thomson Reuters has also done research on the smartphone-related patents held by Samsung, Apple’s main adversary in court and leading competitor in the marketplace. Samsung has filed about 4,000 patents, far more than Apple.

“Samsung has thrown everything into it,” Mr. Stembridge said. But patent disputes, as he noted, “play out in the courts ultimately.”

Bits Blog: The Patent Clues to the Apple iPhone Beyond '5'

Bigger screen, longer battery life, clever new features. It’s another version of the iPhone, waiting in the wings to be announced on Wednesday, as everyone expects.

But for a look at Apple’s longer-term ambitions for the iPhone, take a stroll through its patent portfolio. That is what the Thomson Reuters intellectual property group did for a report released on Tuesday, “Inside the iPhone Patent Portfolio.”

For example, Apple filed a patent application in 2010 for a miniature fuel-cell power supply that could power an iPhone or iPad for days or weeks without recharging. It’s the same hydrogen fuel-cell technology now used in some hybrid electric buses, especially in Europe, said Bob Stembridge, an analyst for Thomson Reuters.

“It’s just drastically scaled down for mobile devices,” he said.

Another patent filing in 2010 is sort of supersmart multimedia hypertext. It’s a feature for tapping on a word in text on a touch screen, and related information pops up. The extra information could be in most any form — text, pictures, audio or video. A drawing in the patent application shows a finger touching the word “apple,” as in a “big juicy red apple.” The software apparently both understands the context and fetches related content — a picture of an apple, according to the patent application drawing.

The Thomson Reuters report finds, as you might expect, a surge of innovation, patents filed and litigation at Apple since the iPhone was introduced in 2007. Thomson Reuters said that Apple filed 1,200 patent applications since then, and there are 479 lawsuits in which Apple is involved in one way or another, worldwide.

Though not in the report, Thomson Reuters has also done research on the smartphone-related patents held by Samsung, Apple’s main adversary in court and leading competitor in the marketplace. Samsung has filed about 4,000 patents, far more than Apple.

“Samsung has thrown everything into it,” Mr. Stembridge said. But patent disputes, as he noted, “play out in the courts ultimately.”

Judge Urges Apple and Samsung to Settle Patent Dispute

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Bits Blog: Apple's Schiller Testifies in Smartphone Patent Trial

A new day of testimony in the patent infringement trial between Apple and Samsung kicked off Friday with an iPhone history lesson from Philip W. Schiller, the most senior Apple executive yet to appear in court in the case.

David Paul Morris/Bloomberg NewsPhilip W. Schiller arriving at the courthouse on Friday.

But the morning began with a scolding from the federal judge in the case, Lucy H. Koh, directed at Samsung and its lawyer, John Quinn, over Samsung’s public release of evidence earlier in the week that she had ordered excluded from the case. The evidence, Samsung argued, would have helped the company show that Apple’s smartphone designs had been inspired by another company, Sony.

To ensure that no jurors had been tainted by the release, Judge Koh ushered in members of the jury, one by one, and asked if they had seen any news coverage of the case since the last time they were in the courtroom. One juror admitted to reading headlines about the case on the Internet but did not recall seeing anything related to the Samsung press release. Judge Koh warned jurors not to read press reports about the case and said the court planned to save them for the jurors.

“We’re going to compile all of the articles about this case,” Judge Koh said. “At the very end of this case, you’re going to get it all.”

Mr. Schiller, Apple’s senior vice president for worldwide product marketing, entered the courtroom in San Jose, Calif., shortly after 9 a.m. During questioning by Apple lawyers, Mr. Schiller discussed how the iPhone had come to be.

“First, Apple had been known for years for the Mac. Then we had a big hit called the iPod — it really changed the view inside and outside the company,” Mr. Schiller said, adding that Apple began looking at other products it could build. “People were suggesting every idea: make a camera, make a car — crazy stuff.”

“We realized that at the time, cellphones weren’t good as entertainment devices,” Mr. Schiller said. “In addition, at the same time, we’d already started working on a tablet device that would become the iPad.”

Citing press coverage in early 2007, Mr. Schiller said that leading up to the release of the product, “we didn’t need any marketing; we allowed the press to talk about the iPhone.”

That approach soon changed. Apple’s lawyers showed a slide indicating how much money Apple had spent on advertising for the iPhone. Mr. Schiller said that in 2008, it spent $97.5 million in the United States. In 2009, it spent $149.6 million.

Mr. Schiller spoke of Apple’s products as if he was speaking at one of the company’s product unveilings, focusing repeatedly on beauty, design and simplicity.

The Apple legal team seemed to be using this as a cornerstone of their case.

Through court documents and questioning, they continually emphasized the idea that customers are drawn to Apple because of the quality and design of its products. Mr. Schiller said customers buy products like the iPhone and iPad over other products because of Apple’s “consistent design.” He said: “All together, it’s a simple, beautiful look that has stayed consistent across the product line. Customers value beautiful products.”

When asked by Apple lawyers if copying of its products was a problem for Apple, Mr. Schiller said, “It’s a huge problem.” He said that it was confusing for customers, who might see a product advertised on a highway billboard for just a split second.

Mr. Schiller was shown a slide of an iPhone 3GS next to a number of Samsung smartphones. He said  he thought Samsung had “ripped off a bunch of our design elements.”

In challenging the originality of the iPhone, Samsung lawyers cited the LG Prada phone that was on the market before it. The phone had a full touch screen with an onscreen keyboard instead of a physical one.

Samsung’s legal team cited an internal Apple e-mail thread discussing different marketing approaches for the iPhone. In one e-mail, Steve Sinclair, an employee in the Apple marketing team, noted that the company could not say that the iPhone was the first full touch-screen phone. “Not true,” he wrote, then linking to a Wikipedia page for the LG Prada phone.

Disruptions: Disruptions: Apple Patent Fight With Samsung Spills Some iPhone and iPad Secrets

APIC/Getty ImagesHorace Goldin sawing a woman in half. The magician’s secrets were revealed in the 1930s when he went to court to defend his signature illusion, much like Apple’s secrets are being brought to light in a patent lawsuit the company has brought against Samsung.

SAN JOSE, Calif. — Back in the early 1930s, a magician by the name of Horace Goldin went to court to defend his signature illusion: sawing a woman in half.

Mr. Goldin filed a lawsuit against the R. J. Reynolds Tobacco Company for using this magic trick in an advertisement and explaining how it worked. According to an article in The New York Times from March 1933, Mr. Goldin, who had won a patent for the illusion a decade earlier, asserted that the ad had adversely affected his ability to get people to see his shows. He asked for $50,000 in damages. (That’s about $865,000 in today’s dollars.)

I thought about Mr. Goldin last week as I sat in a federal courtroom here in the capital city of Silicon Valley. I listened to evidence presented in a patent lawsuit that Apple has brought against Samsung Electronics. Apple claims that Samsung copied its designs for the iPhone and the iPad.

You see, even just by filing his patent, and then using it to litigate, Mr. Goldin publicly drew attention to the secrets of his profession. Apple, by going to a jury trial to defend the patents of its most prized products, is also allowing competitors and the public to see inside one of the most secretive companies in the world.

Steven P. Jobs, the co-founder of Apple, was very much in the mold of a magician. People often spoke of being sucked into a “reality distortion field” as he pitched his new products. Anyone who closely watched those dramatic announcements may recall how he repeatedly used the word “magical” to describe his latest devices.

The way the audience oohed and aahed during his performance was as if Mr. Jobs was saying: “Step right up! Ladies and gentlemen. Boys and girls of all ages! See the latest magical Apple device. You can stretch your fingers on the flat screen and zoom into a photo or map!”

More oohs and aahs.

It was, after all, Arthur C. Clarke, the science fiction author, who once said, “Any sufficiently advanced technology is indistinguishable from magic.” And as Mr. Jobs knew so well, one thing that makes magic so, well, magical, is that you don’t know how it works. It’s also one reason Apple is so annoyingly tight-lipped.

Based on early depositions and courtroom documents that have been submitted for the Apple v. Samsung trial — including photos, e-mails and prototypes — we’re starting to learn just how Mr. Jobs pulled off his tricks.

On the first day of the trial, Christopher Stringer, a longtime industrial designer at Apple with a flair for the theatrical — he wore an ice-cream-white suit — explained the process the company goes through to create these prototypes.

For example, 15 or 16 designers worked together around a kitchen table. When it came time to plan the devices, the company tried almost everything. There are iPads of various exaggerated shapes and sizes. They are white, black or metallic. One iPad has a strange stand that protrudes from the back.

Some of the early prototypes of the iPhone are bizarre. One, a long black rectangle, looks as if it is twice the size it should be. Others have beautifully curved glass screens. Another resembles an old silver iPod that just happens to be a phone, too. And there’s the strangest of all: an iPhone that looks like a stretched hexagon made of cheap black plastic.

While in court on Friday, Philip W. Schiller, Apple’s senior vice president for worldwide product marketing, pulled the curtain further back when he divulged the company’s advertising budgets — often more than $100 million a year for the iPhone alone. Also at the hearing, Scott Forstall, senior vice president for iPhone software, explained that the early iPhone was called “Project Purple.” Mr. Forstall said it was built in a highly secure building on Apple’s campus. A sign on the back of the building read “Fight Club.” Behind the security cameras and locked doors, most employees on the project did not even know what they were working on.

This is just the beginning. There will be weeks of trials and other executive inquisitions that will explain how other magic tricks work inside Apple.

For its part, Samsung accuses Apple of copying from Sony — Sony! — and other electronics makers. It even sent out a news release containing evidence that the court would not allow to be presented before the jury that showed what it says is truly behind the magic.

It seems that even if Apple wins the patent case against Samsung, it may find itself in the same pickle that Mr. Goldin did 80 years ago.

Although the federal court threw out Mr. Goldin’s claim in 1938, the damage had already been done. Besides the large legal fees, the news media brought more attention to how the magic trick of sawing a woman in half actually worked — it was no longer magical. (The secret involved two women. The first woman’s feet protruded from the base of the box, the other’s head stuck out of the top.)

Years later, when Mr. Goldin developed a new illusion in which a giant buzz-saw blade appeared to cut through a woman who was not even enclosed in a box, he chose not to file a patent. He didn’t follow up with any litigation against people who tried to copy or use his trick. He had learned it didn’t pay to protect his secrets that way.

By showing the public how it designs products that twice radically changed the electronics industry, Apple could risk losing some of its magic.

E-mail: bilton@nytimes.com

Bits Blog: Apple's Schiller Testifies in Smartphone Patent Trial

A new day of testimony in the patent infringement trial between Apple and Samsung kicked off Friday with an iPhone history lesson from Philip W. Schiller, the most senior Apple executive yet to appear in court in the case.

David Paul Morris/Bloomberg NewsPhilip W. Schiller arriving at the courthouse on Friday.

But the morning began with a scolding from the federal judge in the case, Lucy H. Koh, directed at Samsung and its lawyer, John Quinn, over Samsung’s public release of evidence earlier in the week that she had ordered excluded from the case. The evidence, Samsung argued, would have helped the company show that Apple’s smartphone designs had been inspired by another company, Sony.

To ensure that no jurors had been tainted by the release, Judge Koh ushered in members of the jury, one by one, and asked if they had seen any news coverage of the case since the last time they were in the courtroom. One juror admitted to reading headlines about the case on the Internet but did not recall seeing anything related to the Samsung press release. Judge Koh warned jurors not to read press reports about the case and said the court planned to save them for the jurors.

“We’re going to compile all of the articles about this case,” Judge Koh said. “At the very end of this case, you’re going to get it all.”

Mr. Schiller, Apple’s senior vice president for worldwide product marketing, entered the courtroom in San Jose, Calif., shortly after 9 a.m. During questioning by Apple lawyers, Mr. Schiller discussed how the iPhone had come to be.

“First, Apple had been known for years for the Mac. Then we had a big hit called the iPod — it really changed the view inside and outside the company,” Mr. Schiller said, adding that Apple began looking at other products it could build. “People were suggesting every idea: make a camera, make a car — crazy stuff.”

“We realized that at the time, cellphones weren’t good as entertainment devices,” Mr. Schiller said. “In addition, at the same time, we’d already started working on a tablet device that would become the iPad.”

Citing press coverage in early 2007, Mr. Schiller said that leading up to the release of the product, “we didn’t need any marketing; we allowed the press to talk about the iPhone.”

That approach soon changed. Apple’s lawyers showed a slide indicating how much money Apple had spent on advertising for the iPhone. Mr. Schiller said that in 2008, it spent $97.5 million in the United States. In 2009, it spent $149.6 million.

Mr. Schiller spoke of Apple’s products as if he was speaking at one of the company’s product unveilings, focusing repeatedly on beauty, design and simplicity.

The Apple legal team seemed to be using this as a cornerstone of their case.

Through court documents and questioning, they continually emphasized the idea that customers are drawn to Apple because of the quality and design of its products. Mr. Schiller said customers buy products like the iPhone and iPad over other products because of Apple’s “consistent design.” He said: “All together, it’s a simple, beautiful look that has stayed consistent across the product line. Customers value beautiful products.”

When asked by Apple lawyers if copying of its products was a problem for Apple, Mr. Schiller said, “It’s a huge problem.” He said that it was confusing for customers, who might see a product advertised on a highway billboard for just a split second.

Mr. Schiller was shown a slide of an iPhone 3GS next to a number of Samsung smartphones. He said  he thought Samsung had “ripped off a bunch of our design elements.”

In challenging the originality of the iPhone, Samsung lawyers cited the LG Prada phone that was on the market before it. The phone had a full touch screen with an onscreen keyboard instead of a physical one.

Samsung’s legal team cited an internal Apple e-mail thread discussing different marketing approaches for the iPhone. In one e-mail, Steve Sinclair, an employee in the Apple marketing team, noted that the company could not say that the iPhone was the first full touch-screen phone. “Not true,” he wrote, then linking to a Wikipedia page for the LG Prada phone.

Apple-Samsung Trial Highlights Tricky Patent Wars

A jury will be asked to sort through all that to settle a dispute between Apple and Samsung Electronics beginning Monday in a federal court in San Jose, Calif.

The jury trial is the latest phase in a global campaign of smartphone patent litigation that began more than two years ago. The legal clashes mainly pit Apple against rival smartphone makers whose handsets are powered by Google’s Android software, notably Samsung, HTC and Motorola Mobility, which Google bought last year. Dozens of lawsuits and countersuits have been filed in courtrooms around the world.

Yet the escalating patent battle is more than just legal maneuvering. Patents can be powerful tools for determining the rules of engagement for major companies in a fast-growing industry like smartphones.

Patents are declarations of invention that are often easily obtained from government patent examiners, but their real value — their validity and strength — is determined in court.

A few significant rulings in favor of one side or the other, industry and patent experts say, could shape the competitive landscape in smartphones and a sister industry, tablet computers. Court decisions, they say, can provide the basis for negotiating the terms and cost of licensing and cross-licensing of patents — or for keeping certain patented features exclusive to one company.

“Once you determine who is the genuine innovator, and in what technologies on the product, you reset the playing field,” said Kevin G. Rivette, a Silicon Valley patent consultant and former vice president for intellectual property strategy for I.B.M.

But to bring a real shift in the marketplace, Mr. Rivette added, one side must have “strong patents, not incremental ones.”

That issue is much debated, and litigated, in the smartphone arena.

Apple scored some points in June. Judge Lucy H. Koh, who will also preside over the jury trial that begins this week, issued a preliminary injunction against Samsung, ordering it to stop selling its Galaxy Nexus smartphone in the United States.

Judge Koh found that Samsung had infringed on an Apple patent for a “universal interface,” which broadly describes crucial ingredients found in Siri, Apple’s question-answering application (though the patent itself was filed by Apple before it acquired Siri in 2010).

But the power of smartphone patents in general suffered a blow in another federal court in June.

Richard A. Posner, a prominent federal appeals court judge in Chicago, dismissed a case involving Apple and Google’s Motorola Mobility subsidiary. In his “pox on both of your houses” ruling, Judge Posner ridiculed Apple’s broad claims for its user-experience patents and Motorola’s claim that Apple should pay it a rich royalty on its basic communications patents. Both companies are appealing that ruling.

Fierce patent battles in new industries have been the rule for more than a century, from the steam engine to semiconductors. The lessons of history are decidedly mixed.

Sometimes, patent warriors can hold off rivals for years, as the Wright brothers did in the airplane business — though the cost in time, money and innovative energy diverted was daunting even then. In 1912, Wilbur Wright wrote, “When we think what we might have accomplished if we had been able to devote this time to experiments, we are very sad.”

In smartphones, some analysts say, the sheer number of patents and the speed of innovation in product development undermine the power of patents. Because a smartphone combines many communications and computing technologies, as many as 250,000 patents may touch the device, according to estimates by RPX, a patent licensing company.

“You necessarily litigate individual patents, but there are thousands of patents behind the ones in court,” said Mark A. Lemley, a patent expert at the Stanford Law School. “That complexity and the speed of innovation may well make it easier to invent around the patent system in smartphones.”

Indeed, for its new Galaxy models, Samsung developed an alternative to one of the Apple-patented features cited in this week’s trial.