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Samsung on Back Foot in Patent Battle With Apple: Expert

As Apple and Samsung Electronics head to the courts in the United States on Monday in a technology-patent trial that has a lot at stake for both firms, one intellectual property expert tells CNBC that Apple is in a stronger position than its Asian rival.

Samsung phone and an iPhone 4
Damien Meyer | AFP | Getty Images
Samsung phone and an iPhone 4

“Even though the jury trial hasn’t started, it has already in a way, because the jury has been told that it can draw an adverse inference from the fact that Samsung failed to avoid the auto deletion of emails that Apple later sought as evidence. That’s going to have an immediate impact on Samsung’s credibility,” Chris Baxter, Principal at Baxter IP in Sydney, told CNBC Asia’s “Squawk Box”.

Last week Apple won court permission to tell the jury that Samsung destroyed emails that it wanted to use as evidence in the trial. At this trial, Apple is seeking about $2.5 billion in damages.

A 10-member jury trial will now take place in San Jose, California. Apple claims that South Korea’s Samsung copied the design patents of the iPhone and iPad, while Samsung contends that it has relevant patents of its own and produced many basic smartphone technologies first.

Baxter adds that, “Samsung (also) failed to challenge the validity of Apple’s design patents to avoid a preliminary injunction, so I suppose Apple is off to a strong start but both sides are bringing forward some interesting evidence.”

Samsung faces a potential sales ban on products such as its Galaxy S III smartphone and tablet computers. For Apple, the trial is seen as a key test of its strategy on patent litigation globally.

Smartphones are key to both Apple and Samsung, which together account for more than half of smartphone sales worldwide. Samsung on Friday reported a record $5.9 billion profit for the April-June quarter, boosted by booming sales for its Galaxy S phone, while Apple delivered a rare earnings miss for its fiscal third quarter.

Stiff Competition

Melissa Chau, Research Manager, Client Devices, for research house IDC Asia-Pacific, says the outcome of the trial is unlikely to impact Apple or Samsung in terms of their market share in the mobile phone market over the long-term.

“It doesn’t really matter who wins,” she said. “While they contest these patents, Samsung will be doing things to make sure that new products do not infringe patent laws.”

Chau added that if Apple is successful, this could have an impact on products Samsung ships over the next 6 months but further out, the impact would be reduced as newer products are launched.

“The battle between Apple and Samsung is a long-term one and this trial won’t change the nature of competition between the two,” Chau said.

Baxter adds there is a chance Apple and Samsung could reach an eleventh-hour settlement.

“The problem is that both sides are polarized in terms of the value they put on each other’s patents,” Baxter said. “Whichever party loses will probably appeal but they would probably do well to reach some middle ground,” he added.

By CNBC's Dhara Ranasinghe

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