Samsung Files High-Stakes Suits Against Apple

Samsung Electronics has sued Apple in Paris and Milan to end sales of the Apple iPhone 4S on the ground that they infringe Samsung patents. Samsung is also mulling suits in other markets.

Samsung’s lawsuits kick off a high-stakes gamble that could cost the company as much as $60 billion if it loses. That’s because it would be liable for iPhone 3 and 4S sales of around $52 billion that Apple stands to lose during the lawsuit, plus an additional $8 billion Samsung could lose in sales of chips and LCD screens to Apple which is Samsung’s biggest customer for such components.

Samsung feels it has no choice but to take the gamble.

It has been pushed into a corner by the patent infringement suits Apple initiated which has resulted in the banning of Samsung’s Galaxy Tab 10.1 tablets sales in Germany and the delay in its introduction in Australia due to the risk of Apple’s legal action. The patent war, which Apple initiated with a suit in the U.S. in April to block sales of Samsung’s Galaxy S, has now spread to 20 lawsuits in nine countries, including Korea, Australia and Germany. If Samsung were to take a defensive posture, Apple’s lawsuits would eventually choke off Samsung’s global sales pipelines.

The other reason for making the gamble is the high probability of success.

“We are confident that Apple cannot manufacture its smartphones without using our patented communication technologies,” said a Samsung executive.

In a Sept. 26 hearing in a Dutch court an Apple executive admitted that it used patented Samsung technology because it is simply not possible to make a mobile device without using the technology.