Bloomberg News

Apple Recoups Most Samsung Damages Cut From 2012 Verdict (4)

November 21, 2013

Apple Store

Advertisements for new iPhones hang on display inside an Apple Inc. store in London. Photographer: Matthew Lloyd/Bloomberg

Apple Inc. (AAPL:US) won more than $290 million in damages from Samsung Electronics Co. (005930) for patent infringement in a do-over trial that restored most of the amount cut from the iPhone maker’s jury victory in 2012.

A jury of six women and two men decided the damages amount today after a week-long trial in federal court in San Jose, California, where Apple won a $1.05 billion verdict against Samsung last year over copying of technology used in smartphones.

U.S. District Judge Lucy Koh cut $410.5 million in March after finding the original verdict was flawed because jurors miscalculated the period that the infringement occurred for 13 Samsung devices. In the retrial, Apple sought to restore $380 million of the amount cut, while Samsung recommended that the jury award $52 million.

Apple has won almost $1 billion from Samsung “and has the possibility of winning an injunction against infringing devices,” said Carl Howe, an analyst with Yankee Group. “Samsung may consider patent infringement simply a cost of doing business -- fair enough,” Howe said. “However, I think the costs in public perception will end up being higher, and will force Samsung to do things differently in the future.”

The world’s top two smartphone makers have spent hundreds of millions of dollars in legal fees on claims of copying each other’s features in a global battle to dominate the market. Apple, which initiated the legal fight in 2011, had 13 percent market share in the third quarter of this year, while Samsung had 31 percent, according to IDC, a research firm based in Framingham, Massachusetts.

Fifth-Largest

On its own, today’s verdict is the fifth-largest jury award in the U.S. in 2013, according to data compiled by Bloomberg. It’s the largest jury award this year in a patent case. Total damages owed by Samsung now stand at $930 million.

The verdict includes a breakdown for damages for the 13 Samsung devices covered by the retrial, including almost $100 million for Samsung’s Infuse 4G. None of the devices covered by the trial are currently sold by Samsung.

“For Apple, this case has always been about more than patents and money,” Kristin Huguet, a spokesman for Cupertino, California-based Apple, said in a phone interview after the verdict. “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.”

Lauren Restuccia, a spokeswoman for Suwon, South Korea-based Samsung, said the company is disappointed with the verdict, “which is based in large part on a patent that the U.S. Patent and Trademark Office has recently deemed invalid.”

Samsung Appeals

“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,” Restuccia said in an e-mail.

Colleen Allen, who served as forewoman of the jury, said in an interview after the verdict that Apple’s expert witness on damages, Julie Davis, “was on it.”

Davis was a “superstar witness” who remained steady even on cross-examination, said Allen, an ex-U.S. military medic who served a tour in Afghanistan and now runs a mobile blood collecting business.

In closing arguments, Apple lawyer Bill Lee of WilmerHale, employing a tactic that proved successful in the 2012 trial, urged jurors to focus on documents that he said revealed Samsung’s motive for copying, including a Samsung executive’s e-mail lamenting that the company was experiencing a “crisis of design” due to competition from the iPhone.

Damages ‘Windfall’

Bill Price of Quinn Emanuel Urquhart & Sullivan LLP, an attorney for Samsung, told jurors to resist Apple’s “emotional” argument. In his opening and closing arguments, Price argued Apple sought a “windfall” of damages based on its attempt to patent “beautiful and sexy,” when in fact the patents at issue are “very narrow.”

While Koh rejected Apple’s bid after the 2012 verdict for a U.S. sales ban on infringing Samsung devices, a federal appeals court on Nov. 18 cleared the way for the iPhone maker to pursue an injunction targeting some of its rival’s products.

The U.S. Court of Appeals for the Federal Circuit in Washington said that Apple can tailor its request to focus on infringement of patents covering smartphone features, such as multitouch technology, that were at issue in the 2012 trial. The company can’t block Samsung products for infringing patented designs, according to the opinion.

The jury’s damages verdict today concludes the first U.S. patent-infringement trial between the two companies. A higher-stakes trial is scheduled to go before Koh in March. That case covers technology in newer smartphones, including Apple’s iPhone 5 and Samsung’s Galaxy S III.

Apple rose 1.2 percent to $521.14 in trading in New York.

The case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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