Judge Lucy Koh told Apple that it can't go after lost profits as part of the damages related to four of the five patents in its damages retrial against Samsung based on an assumption as to when the company might have started working around the iPhone and iPad maker's patents. That's good news for Samsung and a perplexing position for Apple because the ruling doesn't seem to follow any sort of logic.
Judge Koh's ruling on Apple's profit loss: Illogical
The presumption in this case is that Samsung, at least hypothetically, would have started working around Apple's patents when the infringement actually started instead of when it was notified. Assuming that's what Samsung did, the four patents in question would fall outside the time frame Apple's complaint covers.
While the idea that Samsung would design a feature for their smartphones, then later realize it infringes on Apple patented technology, and then immediately take action to work around the issue to avoid infringement sounds nice, that doesn't seem to fit Samsung's pattern. Instead, Samsung has shown that it will find ways to sidestep Apple's patents only after the features in question become part of an infringement case.
Florian Mueller of FOSS Patents called the logic "absurd," and offered up an example to demonstrate how it fails, saying,
Which driver would accelerate way beyond a speed limit and then hit the brakes with full force for no reason? But if a driver is speeding and suddenly sees the flashing red light of a traffic enforcement camera, then the instinctive reaction is to hit the brakes, though it's too late anyway if your car triggered it.
The ruling doesn't preclude Apple from seeking damages for the patents, but it does limit the scope those damages can cover. The company can continue to seek damages for lost profits on the fifth patent, too.
Judge Koh's ruling came at the end of last week after Apple senior vice president Phil Schiller took the stand to say that Samsung's ongoing infringement is harming his company.
"At the end of the day, there's a cumulative effect of doing all of this that's incredibly damaging," he said. "As this [infringement] has been occurring, it's harder for us to get new customers and bring them into our ecosystem."
The two companies are facing off in court to determine what damages Apple is owed for several products that were included in its big patent infringement win against Samsung last year. Apple was awarded over $1 billion in damages, but part of that was set aside because the Jury improperly calculated the amount Samsung owed.
The current retrial is looking at those specific devices and a new Jury will determine what Samsung must pay in damages for that part. The remaining portion from the original $1 billion award still stands. Whether or not Samsung infringed on Apple's patents is not in question.
The court's ruling on lost profits could prove to be a sticking point, especially if there is an appeal later on. The court is using a hypothetical scenario to determine when Samsung chose to work around Apple's patents, where Apple claims that time frame is a matter of fact. In essence, Judge Koh is ruling based on what Samsung could have potentially done, independently of what they actually did, to avoid infringement.
"Why would Samsung have started to work on designarounds when actually shipping infringing products? Why not start right after releasing the infringing program code to manufacturing?" Mr. Mueller said. "To me, this is more arbitrary than it is logical."
Judge Koh, however, doesn't see her ruling as arbitrary. Considering the likelihood of an appeal in this case is high, we'll very likely get to see if the Appellate Court agrees with her logic.