Apple wins $538.6 million from Samsung in latest iPhone patent retrial

Venture Beat ^ | May 24, 2018 | by JEREMY HORWITZ

[Swordmaker]

Nearly six years after a federal jury awarded Apple over $1 billion for Samsung infringements of iPhone intellectual properties, a jury retrying the damages portion of the case has reached a unanimous verdict, modifying the figure to $538,641,656 across five design and utility patents. The verdict comes after years of damages-only retrials and appeals, including a visit to the United States Supreme Court.

Apple Inc. v. Samsung Electronics Co. began in April 2011 with Apple’s allegation that certain Samsung smartphones infringed on iPhone inventions including patents and trademarks. Apple won the trial in August 2012, receiving an initial award of $1.049 billion, but was forced back into court for subsequent disputes over legal questions and damages. Following the first verdict, Samsung paid Apple $548 million in damages, roughly $399 million of which was at stake here.

During the latest retrial, the key issue has been the appropriate definition of the phrase “article of manufacture” — specifically, whether to calculate the damages Apple suffered based solely on the specific value of five iPhone patents Samsung infringed, or upon the total value of a phone containing those innovations. If a $600 phone contained $300 of infringed Apple parts, Samsung might argue that it owed Apple damages only for the $300 portion, while Apple might say that its $300 of innovations enabled sales of $600 phones.

The retrial has been looming since December 2016, when the U.S. Supreme Court returned the case to a lower federal court for a jury to determine whether the entire phone or its components were the correct “article of manufacture.” Last October, the federal court ordered a jury retrial on that issue, using a new test focused on four factors:

• “[T]he scope of the design claimed in the plaintiff’s patent, including the drawing and written description,”
• “[T]he relative prominence of the design within the product as a whole,”
• “[W]hether the design is conceptually distinct from the product as a whole,” and
• “[T]he physical relationship between the patented design and the rest of the product… [whether] the design pertains to a component that a user or seller can physically separate from the product as a whole” and “the design is embodied in a component that is manufactured separately from the rest of the product, or if the component can be sold separately.”

Not surprisingly, each side polarized its measure of damages to persuade the jury to fall somewhere in the middle. Samsung suggested damages of $28 million, while Apple asked for $1 billion, telling the jury to “put it in context: Samsung infringed millions and millions and millions of times.” The jury’s verdict included $533,316,606 for infringement of Apple’s design patents, and $5,325,050 for infringement of its utility patents, totaling just over $538.6 million. That figure sits roughly in the middle of the companies’ extremes, but is higher than the $399 million that was originally at stake in the retrial, a victory for Apple.

[Swordmaker]

FINALLY, after six years of Samsung obfuscating and appealing, the courts have finished the patent infringement case and awarded Apple $538.6 million from Samsung for infringing the design and utility patents of the iPhone in a case originally brought to court in 2012 that made its way all the way to the US Supreme Court and which Samsung lost at every step. —PING!

Apple wins Samsung Infringement Case, FINALLY! Ping!

If you want on or off the Mac Ping List, Freepmail me.

[Swordmaker]

Maybe we can lay to rest the “rectangle with rounded corner” canard once and for all. . . which was Samsung’s propaganda lie attempting to poison the jury base.

[aMorePerfectUnion]

Man, I hope this doesn’t make fake iphones more expensive for cheap Freeps...

[gibsonguy]

538 Billion, can Samsung make that kind of payoff and Survive?

[gibsonguy]

Oops I Misread it. It’s Million, big difference.

[TheBattman]

Hey - I would be more than happy to try out $538.6 million! I think maybe I could afford my electric bill with that! LOL

[aMorePerfectUnion]

Samsung made about $50 billion last year, selling imitation iPhones and other stuff.

[\/\/ayne]

So Samsung got it reduced by almost half?

[PAR35]

So Samsung got it reduced by almost half?

Yes, that is what they call " a victory for Apple."

But when you dissect the story, it looks like Samsung will actually be writing a check for around $135 million. They've probably paid close to that to their lawyers.

[Swordmaker]

So Samsung got it reduced by almost half?

No the judge in the original case reduced it drastically saying that the jury misunderstood her instructions. This is a big increase over the amount it was when it went to the US Supreme Court and was remanded for rejudging of the penalty with them saying both the judge and both appellate levels got it partially wrong but Apple was right.

[Swordmaker]

But when you dissect the story, it looks like Samsung will actually be writing a check for around $135 million. They've probably paid close to that to their lawyers.

What are you talking about? Apple doesn’t PAY Samsung’s lawyers out of Apple’s infringement award. The winner doesn’t pay the loser’s lawyers. SAMSUNG has to pay them over and above the judgement.

Apple will most likely petition the court to have Samsung to pay their lawyers and will likely prevail.

[Swordmaker]

Ah, I think I see what you’re getting at. . . and you’re correct. But they’ll also have to pony up interest on the entire $399 million they kept tied up since they appealed.

Also, Apple has another infringement case just starting against Samsung on subsequent models that now just can go with a presumption of infringement and move to damages because they have fully adjudicated AND appealed patents. Samsung’s only case is to argue these, phones don’t look like the infringement phones or use the utility patents infringed, but they do and did. . . As did every Samsung phone and tablet afterward.

It also opens the door for Apple to sue all the other infringers of their patents.

[PAR35]

If the money has already been paid, the post judgment interest wouldn’t apply. The rate tracks one year Treasuries anyway, so in the scheme of things, so even if it was escrowed, it probably hasn’t lost much ground, if any.

I just looked the rates up - in 2012 when the judgment was handed down, the rate was never higher than .2% ( a 0.002 multiplier).

Even though Treasury rates have gone up, it is my recollection that the judgment rate is set based on the week before the judgment is taken. “Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding. [FN1] the date of the judgment.” So if they didn’t pay, they probably made a nice profit on the judgment - or at least enough to cover the cost of the bond.

[Swordmaker]

I just looked the rates up - in 2012 when the judgment was handed down, the rate was never higher than .2% ( a 0.002 multiplier).

As I recall Samsung insisted the entire judgement had to be put into escrow, but I defer to your findings. All the way through the appeals process Samsung kept trying to get the whole thing tossed out, including invalidating design patents, so they wouldn't have to pay anything, and get it all back.

If the escrow paid sufficient interest, then the point would perhaps be moot, although Apple might be able to argue they could have made more with the money in their investment pool.

I suspect they will also request payment for their attorneys' fees as I mentioned. They've done it before in previous infringement suits and gotten them.

I do, however, think that Apple may also appeal the judge's ruling about the willfulness of Samsung's infringement as there was ample evidence the infringement was willful. They had published a 132 page internal memo they distributed to their engineering, design, and programers with a page-by-page demands from upper management how each feature had to be identical to the iPhone. It was published both in Korean and English. It was introduced into evidence. If they can get the judge's ruling that it was "not willful" then treble damages could accrue. This memo shows absolutely it was willful.

The Korean-American Judge Lucy Koh would not let the jury make that particular determination of fact. She made it, saying in her opinion any infringement was not willful, despite the obvious evidence it was.

[PAR35]

Yes, Apple probably will get an award of attorneys fees.

I had one case where funds were escrowed. They tried to put them into speculative investments but we insisted on treasuries. My guess is that they would have gone conservative on the escrow, but if the parties agreed to something else, I expect the judge would have gone along.

As to the merits on willfulness, I’ll plead ignorance.

I do know that Samsung has features that Apple doesn’t match. I got a Samsung because it can do what Apple can’t. Maybe Apple needs to license removable batteries from Samsung to settle the case.

[Swordmaker]

I do know that Samsung has features that Apple doesn’t match. I got a Samsung because it can do what Apple can’t. Maybe Apple needs to license removable batteries from Samsung to settle the case.

Apple doesn’t want removeable batteries. . . Nor excess pixel screens. What else do Samsung phones that you use do that can’t be done on iPhones? Don’t give me gimmicky things available on only one madel of a Samsung phone such as their model with the glitchy blood oximeter. Use real features. By the way most high-end Samsung phones don’t have user swappable batteries now. So, exactly what does Samsung have that’s useful that Apple doesn’t match or better?

[PAR35]

What else do Samsung phones that you use do that can’t be done on iPhones?

Unlimited, in phone, storage. Let's see Apple match that.

Apple doesn’t want removeable batteries.

Of course THEY don't. Replacement phones are a lot more profitable than replacement batteries. And being able to track you has benefits all their own.

[Swordmaker]

Unlimited, in phone, storage. Let's see Apple match that.

Uh, no, you don’t. You require swapping and managing SD cards for that, SD cards which are a considerably slower memory format than the memory in iPhones.

I have full access from every one of my iOS devices to remotely save to and retrieve data from my Mac at home which has ten terabytes of storage. . . Why would I want something on my phone that can be stolen by merely removing and copying an SD card?

I also have as much storage as I care to have for files on iCloud Drive instantly available on all my devices and computers. Currently I use that for images for all my devices because it’s convenient and instantly syncs all of them, regardless of where I add an image or video.

Hers a clue for you, PAR35, batteries grow old on sealed Android devices at the same time frame and rate as Apple devices, but Apple devices have a much longer useful lifespan. Apple replaces batteries in their pones for just $29, which are generally good for at least two years. Tracking? It’s Android devices that still get tracked when turned off. iPhones have been tested by independent labs, and when actually turned off, or put in "Airplane mode," do not send any radio signals at all. No tracking. That was NOT the case with many Android phones. . . some even with the batteries removed for a short time due to charges left in capacitors.

Adding user replaceable batteries reduces the space available for battery capacity, requires access to the internal space of the device which allows environmental ingress of pollutants, adds parts which can be lost, and adds failure modes to the device. It’s an engineering option being embraced by more and more Android device makers.

So far you’ve shown me nothing but the standard Android talking point that are not really advantages, but kludges to do something the iPhone/iPad already does more elegantly and securely.

So, I’m still waiting to hear about these remarkable capabilities. . .