Apple, Samsung Patent Infringement Damages Retrial Primer

| Analysis

Apple and Samsung are set to square off in U.S. Federal Court today for a retrial to determine just how much money Samsung owes as damages for infringing on the iPhone and iPad maker's patents. Apple scored a big win in its patent fight with the electronics maker last year, but part of the damages the company was awarded was tossed out for being improperly calculated.

Apple, Samsung patent infringement damages retrial starts todayApple, Samsung patent infringement damages retrial starts today

The Apple win came in August 2012 when a Federal Jury ruled that Samsung infringed on a long list of the company's mobile device patents, and also ruled that Apple wasn't infringing on any of Samsung's patents. Apple was awarded over $1 billion in damages, part of which was set aside when the court determined the Jury hadn't correctly handled the calculation process for determining just how much Apple was owed.

Instead of leaving Apple high and dry on the $365 million that was improperly calculated, however, the court scheduled a retrial to determine the what the company is owed for the devices that were part of the bad math. The remaining amount is still owed to Apple -- assuming Samsung doesn't get that overturned in appeal -- and the part that's the focus of this new trial could ultimately be higher or lower than was awarded by the first Jury.

Today's trial isn't determining whether or not Samsung infringed on Apple's mobile device patents. That determination came last year, making this new trial about figuring out what to do for the dollar amount that was tossed out.

Samsung is hoping to convince the new Jury that it shouldn't have to pay more damages while Apple would like to see that $365 million figure pushed up higher. There isn't any guarantee Apple will get what it wants, but the fact that it did so well in the original trial is a good sign.

Once this retrial runs its course, Samsung will be back in front of Judge Lucy Koh to face possible sanctions for taking confidential documents related to Apple and Nokia licensing agreements and then allegedly using those to gain an unfair advantage in its own licensing talks. The company, along with its legal firm, could be hit with stiff sanctions for sharing the documents and then dragging their feet during the court's investigation into the incident.

So far, Samsung hasn't come out well in its legal patent fights with Apple. Today's retrial has the potential to keep that streak alive, and the upcoming sanctions hearing in December will likely play out poorly, too.

That's OK news for Apple, but not great, because Samsung's modus operandi is to stay a step ahead of the legal system by releasing new products faster than the courts can keep up with the case load. Don't expect to see the fight between Apple and Samsung to end any time soon. Samsung's tactics are working well for the company so far, and that means we'll be reading about their court room battles for at least the next few years.

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12 Comments Leave Your Own

Bosco (Brad Hutchings)

Ultimately, Apple is going to have to compete in the marketplace. This ongoing dispute is basically background noise over rounding error. The worrisome part for Apple is that going forward, it’s slower deliberate pace will mean that Samsung has probably innovated there before. Larger screens, gestures, curved screens, etc.

gnasher729

Since when is a larger screen “innovation”?

vpndev

If the “Galaxy Gear” is any clue to Samsung’s “innovation” then I think that Apple has little to fear. It’s just poor execution of an idea that’s been around for quite a while, as Samsung’s own ads demonstrate.

I think that the iPhone UI is a good example of Apple’s innovation. And I notice that everyone [except WinPhone] in the smartphone business has copied it. And Samsung seems to be the most slavish copy.

Having WiFi in a phone and a full browser also did not originate at Samsung, if I remember correctly.

RonMacGuy

Yeah!!  Bosco’s BACK!!  Hit us with a new prediction, Bosco!!  PLEASE!!

There is no doubt that Apple is competing (and succeeding) in the marketplace already.  $1B is hardly rounding error or background noise.  There is no worry on the part of Apple, no matter what Bosco is implying.  Samsung barely innovates, and it’s pretty obvious.  But nice misdirection.

Bosco (Brad Hutchings)

Samsung’s profits on mobile, 4Q 2012, were $5B. Koh has noted that Apple licenses many of its patents, so Samsung’s use of them is not catastrophic, and can be remedied with cash. Half a billion or a billion every couple of years won’t hurt Samsung. And as Samsung scattershots every conceivable product space with first products, Apple will have tough roads to navigate to avoid copying Samsung.

For the record, I don’t think a patent war between big players does anyone any good. Not Apple, not Samsung, not consumers, not anyone. If governments are going to grant monopolies on so-called inventions, they need to provide more efficient licensing mechanisms, which are more than likely compulsory.

vpndev

>For the record, I don’t think a patent war between big players does
>anyone any good. Not Apple, not Samsung, not consumers, not anyone.

Full agreement here. The system is broken today.

>If governments are going to grant monopolies on so-called inventions,
>they need to provide more efficient licensing mechanisms, which are
>more than likely compulsory.

Thin ice under this theory. Patents are an appropriate reward for invention and it is not unreasonable for a company to profit from its inventions for a time. But we all need to be careful about what we propose here.

- many patents have been granted that should not have been, especially those known as “business method” patents. Probably some of Apple’s patents are in this category but many/most are reasonable inventions. The same is probably true for Samsung.

- many of the patents that Samsung has claimed against Apple are subject to FRAND licensing of the kind described by “...licensing mechanisms, which are more than likely compulsory”. There are valid disputes in several countries and this is, in general, an issue that will be determined by the Courts

- most, if not all, of the patents that Apple has asserted against Samsung are non-FRAND. There is no particularly good reason that Apple should be forced to license them to Samsung. Nor is there any good reason why Apple should quietly watch while Samsung blatantly violates them

So I agree that “the system” needs work. Quite a lot. But proposing “...more efficient licensing mechanisms, which are more than likely compulsory” sounds to me to be just the thing that Samsung would lobby for.

Let’s not license “theft” under the guise of “more efficient”.

Bosco (Brad Hutchings)

Add up licensing deals and awarded damages in the mobile space. Divide that number by the size of the mobile market. That very small fraction should tell you all you need to know about the incentive for invention that patents provide, i.e. less than negligible.

Bottom line: the government does not have to provide $1B protection or even $10M protection for the ideas in the patents at issue in Apple v. Samsung to flourish. These patents are simply a tool of an egregious rent-seeker with the courts playing the role of egregious rent-seeker’s bitch. The only thing that tempers the damage back near proportion is the pace of legal proceedings, which go about 1/100 the pace of the market, if that.

RonMacGuy

For the record, I don’t think a patent war between big players does anyone any good. Not Apple, not Samsung, not consumers, not anyone.

Hmm, sounds like something the losing side of the war says…

 

vpndev

Yeah, Brad. I seem to remember that Samsung demanded 2.5% of TOTAL iPhone price to license its FRAND patents. The alternative was for Apple to cross-license its non-FRAND patents in “exchange”. It’s no surprise that Apple declined the offer.

So you are right ...“These patents are simply a tool of an egregious rent-seeker with the courts playing the role of egregious rent-seeker’s bitch”

Bosco (Brad Hutchings)

And I fully agree with you on that count too, vpndev. It’s all BS. It’s all a circus. Not just Apple’s side. Not just Samsung’s side. Both sides. With a compulsory licensing regime on ALL patents, with invention values negotiated and understood before temporary monopolies are granted, we don’t have any of this garbage.

Intruder

Do you happen to hold any patents?

Bosco (Brad Hutchings)

I do not. I am on applications for several which were not taken to completion. Knowing what I know now about the application process and patent litigation, I would make it tremendously expensive up front for a future client or investor to get my cooperation securing a patent. We’d bill at least twice the rate of the attorney handling it grin. And no, I don’t ever expect to desire to work for a company big and powerful enough where this patent garbage would be part of my employment contract.

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