Apple v. Samsung - The Battle over Damages

Joe Mullin's article Apple v. Samsung: hammering out details before a giant patent battle explains what happened at the pretrial hearing and the factors that may have prevented a settlement earlier this year. Huge money is at stake (e.g., several billions), the parties have different positions on damages and patent rights, and the outcome of this trial may be the tipping point on who is the long term dominant player since they currently share 54% of the market for mobile computing devices.

Barring settlement, the Apple v. Samsung trial will begin the third major mobile computing case to be heard in 2012. The first Oracle v. Google, covered in my blog posts (blog search: Oracle v. Google), resulted in Google winning both the copyright and patent trials. Judge Posner cut off the second case by dismissing Apple v. Motorola with prejudice. Both cases are on appeal to the Federal Circuit.

A damage award is intended to place a patent owner in the same economic position it would occupy if the infringement had not occurred. Here are some of the highlights on the damage cases:

• Apple seeks $2.525 billion in damages (mostly based on lost profits) for Samsung's "illegal copying" of Apple's utility and design patents, but it's not clear if Apple bases damages on the smallest unit containing the accused functionality
• Apple says Samsung's royalty rate of 2.4 percent of the entire device (e.g., an iPhone) for its wireless standard essential patents is far too high
• Apple offers about 1/2 a cent for each infringed standard essential patent (SEP), because a reasonable royalty should be based on the smallest unit containing the accused functionality (e.g., $10 baseband processor) rather than the entire device
• Samsung says Apple’s 1/2 cent per patent is ludicrous, because without Samsung's SEPs Apple would not have a functioning iPhone
• Samsung argues Apple is attempting to stifle competition, limit consumer choice and maintain its historically exorbitant profits

At this time, Apple's damages case makes more sense, but since Judge Koh plans to keep the Apple and Samsung cases together and has promised to make the trial public as possible we should learn more if the trial proceeds. 

Copyright © 2012 Robert Moll. All rights reserved.