Six questions answered on Samsung’s $290m payout to Apple

What features are Samsung ruled to have copied?

Samsung is being forced to pay $290m to rival company, Apple, after a court ruled it copied some of the company’s features. We answer five questions on the payout.

Who made the ruling?

A jury in Silicon Valley ruled that Samsung must pay the significant sum to rival Apple for copying iPhone and iPad features in its devices – these are mostly older Samsung tablets and smartphones.

This verdict comes after a previous jury found Samsung owed Apple $1.05bn for copyright infringement – but a US District Judge found the jury miscalculated the amount Samsung must pay and so ordered a retrial.

Is this the only payment Samsung has to make to Apple?

No. The company also has to pay $550m as a result of the initial verdict. So, in total Samsung is being forced to pay Apple close to $930m in the case.

Apple’s shares were boosted by the news and they traded slightly higher today. Samsung closed down slightly earlier in the day.

What features are Samsung ruled to have copied?

It was found that Samsung infringed Apple patents such as one that allows users to "pinch and zoom" on smartphone and tablet screens.

What has Apple said about winning the case?

Apple said in a statement: "For Apple, this case has always been about more than patents and money. It has been about innovation and the hard work that goes into inventing products that people love.

"While it's impossible to put a price tag on those values, we are grateful to the jury for showing Samsung that copying has a cost."

And Samsung?

It is believed the company plans to appeal the ruling.

In court Samsung’s lawyer William Price, according to the BBC, argued "Apple doesn't own beautiful and sexy.”

He argued that Apple shouldn’t have ownership over the basic rectangle shape of smartphones.

Is this the end of the story?

No. This ruling only covers 13 of the 26 Samsung devices that Apple had argued copied its technology.

A separate trial is pending to determine whether or not current Samsung devices also violate Apple's patents. It is scheduled for March 2014.

Apple has also requested the judge consider a sales ban against all of the older Samsung models that used Apple's technology. However, the judge has previously refused to do so but a separate US Appeals Court has asked for this to be reconsidered.

Cutouts of Samsung Electronics' Galaxy Note 3 in a showroom at the company's headquarters in Seoul on November 22, 2013. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

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What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.