Samsung Hammers Apple's Damage Claims - InformationWeek
Mobile // Mobile Devices
02:19 AM
Connect Directly

Samsung Hammers Apple's Damage Claims

Samsung attorneys question Apple's calculations; cite evidence of prior touchscreen devices that may have influenced iPhone, iPad designs.

Apple rested its case against Samsung Monday with an estimate that $2.5 billion was the low end of the damage it estimates it has suffered as a result of alleged Samsung infringement of its patents. The high end: $2.75 billion, an additional $250 million.

That latter figure was backed up by complex modeling done by silver-haired accounting expert Terry Musika, founder and managing director of Invotex Group. As the Samsung Galaxy rapidly became the best selling smartphone in the world, Apple lost sales and profits that would have been its own, if Samsung hadn't copied its design and user interface, Apple's suit claimed.

Samsung attorney Bill Price launched a bold cross-examination by allowing that some observers might agree with Apple's claim that the Galaxy's "bounce-back" feature, where a user at the edge of an electronic document bounces back to a central point, closely resembles the iPhone's. But after he suggested Samsung might be vulnerable on that point, Price then fired question after question at Musika as he tried to whittle down the estimated damages. At one point Musika looked to Apple counsel, as if to ask whether he needed to answer the question.

"Don't look at him," Price commanded the $800-an-hour expert. "Look at me. Just tell me what you think."

Musika's model assumed that if buyers hadn't gotten a Samsung phone, they would have bought Apple's, doesn't it? Price asked. It does, Musika agreed.

[ Learn more about how Apple is building its case that Samsung produced a look-alike smartphone. See Apple Design Expert Confused Samsung for iPhone. ]

Price then zinged the witness with Samsung consumer research that suggested buyers bought the phone they did because it enabled them to continue with their present carrier, and for part of the time of Musika's study, the iPhone was available from only AT&T. They also choose a Galaxy model because they knew Google created and backed the phone's Android operating system, he said.

During the period of "infringed" sales, Apple couldn't capture all the buyers it wanted because it couldn't produce iPhones fast enough, Price reminded Musika. Apple had earlier used that data to establish how its brand and reputation for innovative, cool products gave value to its patents. Price turned that shortage into a Samsung advantage, noting that Apple claimed it lost $199 million during from June to October 2010, even though it lacked phones to sell.

Samsung sold 22.7 million smartphones and Galaxy Tab tablet computers during the period for which it's charged with infringement, resulting in $8.16 billion. The vast majority of the devices--21,251,000--were smartphones, which generated $7 billion in sales. Samsung's Tab 10.1 tablet, with 1.4 million sold, on the other hand, is the device that is most likely to lead to an infringement verdict. Judge Lucy Koh said it was "virtually indistinguishable" from the iPad when she ruled in July in favor on an injunction against its further sale.

Apple's larger figure includes penalties for duplicating Apple's trade dress, or the way it packages and presents its iPad and iPhone to consumers. Apple encourages immediate involvement between the user and the device by excluding a product manual from the package. Buyers just pick it up and start using it. Apple's attorneys say Samsung mimics the packaging of Apple products and sells Galaxy products without a product manual. Samsung attorneys denied copying Apple trade dress.

At the end of Musika's testimony, Apple rested its case and Samsung moved for an immediate dismissal of all infringement charges on the grounds Apple hadn't proven its case. Judge Koh listened patiently to Samsung attorney Mike Zellers' argument, but few in the large, fifth-floor courtroom doubted which way her decision was going to go. Without fanfare, she denied the motion, saying a jury may decide "it's fair and reasonable" to judge Samsung has infringed Apple's patents.

The jury had been excused from witnessing the arguments over the dismissal motion and didn't hear the judge's comment.

But in the process of denying the motion, Koh made a small concession to Samsung. The firm had cited three Galaxy smartphones that should not be included in any damages consideration because they were never sold in the United States. Lead Apple attorney Harold McElhinny attempted to convince her they had been because Samsung describes them as "global" smartphones. But Samsung attorneys said "global" was a designation for phones that would not be pushed into the U.S. market, so Judge Koh allowed the removal of those three phones.

1 of 2
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
User Rank: Apprentice
8/14/2012 | 8:32:05 PM
re: Samsung Hammers Apple's Damage Claims
This is the most unbiased article I've read about the case - good job. Everything else I've read has been very biased and in favour of Apple.

If you really want a laugh, type in "Apple sues" into a Google search.- they sued just about everyone except God, whom I imagine the Apple cult will sue next so they install Steve Jobs as iGod, and the ultimate ruler of the universe.

There's about 27,800M citations for "Apple sues"!!

I imagine they they have a case in the works to sue over the word "apple" claiming that it their intellectual property and people confuse Granny Smith apples for iPhones thus causing a loss in sales. Even using a image of an Apple is an infringement of Apple's trade mark and suable.

I wonder if Apple will sue claiming the word "Sue" s their intellectual property, they seem to have the corner on that market.
User Rank: Apprentice
8/14/2012 | 7:36:56 PM
re: Samsung Hammers Apple's Damage Claims
Good Job Samsung. Hit them where it hurts. They stole that touchscreen idea, just like they stole their Mac OS UI. It's funny how this iTHIEF Cupertino company steals from others, but they BITCH like little girls when it comes to theirs. I disliked Apple for whining so much, now I HATE THEM!
User Rank: Apprentice
8/14/2012 | 5:56:34 PM
re: Samsung Hammers Apple's Damage Claims
What's next? Chrysler suing Ford, G.M., Honda et al because they all "copied" mini-vans? Ooh, ooh, isn't the steering wheel a "user interface"? TV remotes? Locks that use keys? Do the descendents of Sholes and Glidden (first commercial typewriter for you history buffs) sue Apple because they use a qwerty keyboard (talk about a copied user interface)? Apple is coming across worse than sleazy patent trolls on this one.
User Rank: Apprentice
8/14/2012 | 5:21:21 PM
re: Samsung Hammers Apple's Damage Claims
Seems to me that this has all been a colossal waist of taxpayer money. Purely an entertainment excercise. I only hope the jury sees the same thing and throws this thing out on its ear.
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll