SAN FRANCISCO (Reuters) - The chief executives of Apple Inc and Samsung Electronics Co Ltd are used to running the show at their global tech empires, but they will be in for a different experience when they arrive at a San Francisco federal courthouse on Monday.
Apple’s Tim Cook and Samsung’s Choi Gee-sung, whose companies are embroiled in bitter patent litigation, have been instructed by a federal judge to appear for court-supervised mediation. A joint court filing in April said that “as directed by the Court, Apple and Samsung are both willing to participate” in the discussions. In other words, it was not exactly their idea.
Courts across the United States are increasingly demanding that parties in civil disputes take a stab at mediation, and the federal courts in northern California have been pioneers in pushing litigants toward various forms of alternative dispute resolution. Mediation has also become routine in big intellectual property cases. Last week, for example, a federal judge in Delaware ordered mediation in a patent dispute between Apple and Taiwan phone maker HTC Corp.
In some cases, though, courts have taken the effort to a new level: hauling in the CEOs of big companies to try to work things out directly. It is the corporate equivalent of therapy, only in this case, the participants each get to bring a team of lawyers.
Since lawyers can often get emotional in the heat of litigation and may grow to dislike each other, bringing a decision-maker from above the fray makes sense, said Wayne Brazil, a former U.S. magistrate who founded the federal court’s alternative dispute resolution program in northern California.
Apple and Samsung are fierce rivals as the leading makers of high-end smartphones and the outcome of their legal battle could give the winner crucial advantages in the marketplace. Apple has accused Samsung of “slavishly” copying the iPhone and iPad through products that run on Google’s Android operating system, and Samsung has countersued on claims that Apple infringed its patents.
The U.S. case, the most closely watched in the global patent war between the two companies, is set for trial at the end of July in San Jose, California. Each company denies the other’s allegations of patent infringement.
On Sunday, a top Samsung executive in Seoul said the South Korean technology company still wanted to resolve differences with Apple in the legal dispute.
“There is still a big gap in the patent war with Apple but we still have several negotiation options including cross-licensing,” Samsung mobile division chief JK Shin said before departing for the United States to accompany his boss to the mediation talks.
The two companies already have had at least one mediation session, according to court documents. However, it was unclear whether Cook and Choi attended. A Samsung representative declined to comment, while Apple spokeswoman Kristin Huguet reiterated a prior statement, saying Apple needs to protect its IP against “blatant copying”.
This week’s session, scheduled for two days, will take place in a federal courtroom 40 miles north of Silicon Valley, in San Francisco’s seedy Tenderloin neighborhood. It will be up to U.S. Magistrate Judge Joseph Spero — a bow-tie wearing extrovert with a reputation for handling complex cases — to corral the CEOs and their lawyers toward a settlement.
If Spero senses animosity between the two men, he may separate them, with the judge shuttling between both sides, said one lawyer who has participated in mediations with the magistrate. In that scenario, the lawyer said, one company may have to set up camp in a room usually used for jury deliberations, while the other could be in the judge’s offices.
“You’ll see each other when you’re headed to the common bathroom, but that’s about it,” said the lawyer, who declined to be identified because of pending cases. Spero declined to comment on the mediation.
The relationship between the two companies is complex: While Samsung’s smartphones and tablets run on Android and compete with Apple’s products, Samsung is also a key components supplier to Apple.
Cook became Apple CEO last year as company co-founder Steve Jobs wrestled with a terminal illness. Jobs told his biographer he intended to go “thermonuclear” on Android, but it is unclear whether Cook shares the same degree of emotion. Choi became Samsung’s leader in 2010.
If Spero senses a rapport between the two men, he may opt to have them spend more time talking face to face.
Still, a CEO mediation session may only go so far. Last year, Oracle’s Larry Ellison and Google’s Larry Page undertook mediation in their high-stakes intellectual property fight over Android, but no settlement was reached and a trial in the case is entering its sixth week.
“I can’t imagine that the heads of a major enterprise of that kind would take any more seriously a decision of that magnitude, simply because they are in the room together,” said Vaughn Walker, a former northern California federal judge who now works as a mediator.
The case in U.S. District Court, Northern District of California is Apple Inc v. Samsung Electronics Co Ltd et al, 11-1846.
Editing by Amy Stevens, Vicki Allen, Maureen Bavdek and Dale Hudson