Samsung owes Apple $290M more in damages, jury says

Jury rules that Samsung must pay additional damages for patent infringement. The amount is slightly less than what Apple had requested and brings the total award to about $930 million.

Apple vs. Samsung
CBS
SAN JOSE, Calif. -- A jury on Thursday ruled that Samsung must pay Apple $290,456,793 in additional damages for patent infringement, slightly less than the $380 million Apple had requested.

That brings its total award to about $930 million. Samsung believed it owed Apple only $52 million more in damages.

"For Apple, this case has always been about more than patents and money," Apple said in a statement. "It has been about innovation and the hard work that goes into inventing products that people love. While it's impossible to put a price tag on those values, we are grateful to the jury for showing Samsung that copying has a cost."

Samsung, meanwhile, said it is "disappointed by today's decision, which is based in large part on a patent that the US Patent and Trademark Office has recently deemed invalid."

"While we move forward with our post-trial motions and appeals, we will continue to innovate with groundbreaking technologies and great products that are loved by our many customers all around the world," the Korean company said in a statement.

The jury of six women and two men reached the decision slightly before noon PT Thursday after deliberating since midday Tuesday. Wednesday, the jury requested more information about how to determine Apple's lost profits, but most other questions related to office supplies -- they needed calculators and highlighters -- and lunch -- they got pretty sick of the catered sourdough sandwiches.

Most jurors expressed some tech savviness, but one woman professed to having no cell phones in her home. Another, the forewoman, served as a combat medic before moving to the San Francisco Bay area and opening her own business. One man works as a therapist, while another is a pharmacist.

Jurors who spoke with the press following the verdict said they awarded Apple the entire amount it requested for royalties and its lost profits. They split the difference between what Samsung says its operating costs were and what Apple estimated them to be. That figure was key for determining how much profit Samsung made from its copycat devices.

However, the jurors also said Samsung didn't provide enough information to make its case.

"I wish Samsung could have come up with more evidence to support its case," forewoman Colleen Allen said outside the courthouse following the verdict. The 36-year-old from Aromas, Calif., works as a nurse in a community hospital. She formerly served as a combat medic in the US military.

A jury last year ruled that Samsung had infringed on five Apple patents related to the iPhone's design and functionality. A judge earlier this year vacated about more than $400 million of the original award and ordered a new jury to convene to recalculate the damages for patent infringement. Along with the newly awarded money, Samsung also is on the hook for about $600 million in damages from the first trial.

This time around, Apple asked for $380 million in additional damages. Samsung believed it owed Apple only $52 million. The two disagreed on the amount of royalties, lost Apple profits, and Samsung's profits. What the two agreed on was that Samsung sold 10.7 million infringing devices, generating $3.5 billion in revenue.

Duking it out in court
Samsung made two last attempts this week to halt the trial. Tuesday, it requested a mistrial following what it called racist comments made by an Apple attorney during closing arguments. Then Wednesday, it filed an emergency motion to stay after the US Patent and Trademark Office said an Apple patent important to the damages case might not be valid. Judge Lucy Koh denied the mistrial request but hasn't ruled on the motion to stay.

Apple argued against the motion to stay, saying Samsung's strategy to delay "has crossed the bounds of reason." The company said that Samsung misstated the status of the '915 patent reexamination, and granting the motion would nullify the entire retrial and cause a huge waste of resources. It also would cause "extreme prejudice" against Apple's case and require a retrial of the retrial.

A retrial to determine the additional damages Samsung owes Apple kicked off last Tuesday with jury selection, followed by opening arguments Wednesday. Witnesses who took the stand included Phil Schiller, Apple's head of marketing; and several expert witnesses who calculated the total damages owed.

For most, the damages retrial was a case of "Groundhog Day." No new revelations emerged during the testimony, and most witnesses also took the stand during the last trial more than a year ago. Apple's witnesses argued Samsung's copycat devices hurt the company, while Samsung argued that people seek out its devices more for their differences than similarities to Apple gadgets.

Not at issue in this case was whether Samsung infringed Apple's patents. The judge instructed the jury that a previous jury already decided Samsung infringed, and that they shouldn't revisit that issue. The sole consideration in the retrial was money -- just how much Samsung owes Apple for infringing its patents.

Apple arrived at the $380 million amount based on lost profits of about $114 million, Samsung's profits of about $231 million, and reasonable royalties of approximately $35 million. Apple estimates it would have sold 360,000 devices if Samsung hadn't released infringing rivals.

Samsung, meanwhile, said Apple shouldn't receive any money for lost profits, $52.7 million for Samsung's profits, and royalties of only $28,452 because the patents have limitations.

Apple and Samsung made their final pitches to the jury in the United States District Court for the Northern District of California here on Tuesday. Apple attorneys Bill Lee and Harold McElhinny argued that Samsung's patent infringement significantly harmed the company. Apple made a big investment and took huge risks when building the first iPhone, they said. As a result, Apple should receive higher damages, the attorneys argued.

"Apple can never get back to where it should have been in 2010," Lee said.

Judge Lucy Koh presides over Apple's patent infringement case against Samsung last year. Vicki Behringer
Samsung attorney Bill Price, meanwhile, argued that Apple's patents are limited and that no one sought out Samsung's devices because of Apple's patented technologies.

"Apple has tried to mischaracterize these patents so they are the iPhone," Price said. But "these patents are very narrow.. Apple doesn't own beautiful and sexy."

When closing arguments had ended, Price asked Koh to declare a mistrial because of what it called "racist" comments made by an Apple attorney. Koh declined to declare a mistrial but did instruct the jury not to consider race, location, or other factors when deliberating.

The Apple lawyer, Harold McElhinny, had warned jurors during his closing statement that the entire San Francisco Bay Area and US economy would suffer if Samsung wasn't adequately fined for its infringement. He compared the situation to US TV makers who went out of business because they didn't protect their intellectual property from foreign companies. Now, the majority of TV manufacturing takes place abroad, he said. Samsung, which is based in South Korea, is currently the world's biggest TV maker by a wide margin.

History of Apple v Samsung
Apple originally filed suit against Samsung in April 2011, accusing the Korean company of copying the look and feel of its products. Samsung countersued two months later over patent infringement and said it was at work on touch-screen phones with giant rectangular screens and rounded corners well before Apple showed up. The initial trial, which stretched more than three weeks in August 2012, wrapped both of those cases in one, somehow squeezing together the patent infringement issues, alongside antitrust claims, and even trade dress issues.

In August of last year, a nine-person jury sided with Apple on a majority of its patent infringement claims against Samsung. At that time, the jury awarded Apple $1.05 billion in damages , much less than the $2.75 billion sought by the Cupertino, Calif., electronics giant. Samsung, which asked for $421 million in its countersuit, didn't get anything.

However, Koh in March ordered a new trial to recalculate some of the damages in the case, striking $450.5 million off the original judgment against Samsung.

The products in question include the Galaxy Prevail, Gem, Indulge, Infuse 4G, Galaxy SII AT&T, Captivate, Continuum, Droid Charge, Epic 4G, Exhibit 4G, Galaxy Tab, Nexus S 4G, Replenish, and Transform. The Prevail in particular racked up $57.9 million of the damages tally, which Koh said was a failure on the jury's part, since the device was found to infringe only on utility patents, and not on design patents.

Even with a verdict now reached for damages, the Apple versus Samsung saga continues. There are likely to be appeals galore, and another patent trial starts in March. The upcoming trial in 2014 deals with a newer set of devices from both companies, as well as different patents. The case has since grown to include a multitude of products including Samsung's Galaxy S3 and Note 2, along with a counterclaim that targeted Apple's iPhone 5.

Updated at 2:15 and 2:25 p.m. PT with comments from jurors, Apple, and Samsung.
 

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