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In Korea, Samsung's loss to Apple puts innovation in spotlight (+video)

Samsung lost a key patent infringement case brought by Apple over mobile technology. The case may force the Korean electronics giant to focus more sharply on innovation, analysts here say.

By Donald KirkCorrespondent / August 26, 2012

A couple walk past a store selling Samsung Galaxy smart phones in Seoul, South Korea, Aug. 26. Apple Inc's decisive triumph over Samsung Electronics in the most closely watched patent trial in years could open the door for Microsoft Corp. to finally hop on board the mobile boom as manufacturers of Android-based smart phones and tablets weigh their legal risks.

Lee Jae-Won/Reuters

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Seoul

The battle between Samsung Electronics and Apple, the two global leaders in mobile devices, gets at the heart of innovation versus creativity in South Korea’s rise as an industrial powerhouse since the Korean War.

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Samsung Electronics, the loser in a milestone patent infringement case brought by Apple, was ordered Friday to pay $1.05 billion for violating Apple’s patents on iPhone and iPad technology. Samsung is vowing, however, to fight to overturn the verdict of the nine-person jury in a federal court in Cupertino, Calif., near Apple’s global headquarters.

Whatever the final outcome, the case may force Samsung to focus more intensively on innovation, according to analysts here.

Samsung should “stop fighting it,” says James Rooney, chairman and chief executive officer of the Seoul advisory firm Market Force. “It’s time to stop copying others. Samsung would be far better advised not to fight it. To continue fighting it is to give themselves a bad name.”

Samsung Electronics chairman Lee Kun-hee, the head of a sprawling empire that accounts for 20 percent of South Korea’s economy, has periodically called on his army of executives and engineers to “shift from copying to innovation.”

Intrinsic to Korea’s rise as an industrial power from the devastation of the Korean War has been the drive to imitate whatever worked for major economies, notably Japan and the United States.

In recent years, however, Korea has been bursting with creativity in fields ranging from motor vehicles to music as epitomized in K-Pop groups with global followings. “There is a huge capacity to create,” says Mr. Rooney, “They’ve been schooled so much in the other way of doing things. Copying has been the backbone of Korea’s economic growth since the 1960s.”

The jury in California, after deliberating for three days on a wide range of complicated issues and questions, came out with the unanimous verdict that Samsung had infringed on six of seven of Apple’s patents for mobile phones. The jury flatly rejected Samsung’s countersuit in which it had asked for $421.8 million in damages.

Although the award of $1.05 billion in damages for Apple was far less than the $2.5 billion Apple had asked for, the amount seems almost incidental when balanced against Apple’s desire to keep Samsung from intruding on its markets with Apple-like products in Samsung packages.

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