By Richard Moses
Following nearly a month long trial, the four-man, four-woman jury deliberated for three days before reaching their decision. Along with deciding infringement and validity, the jury was also tasked to determine a reasonable royalty for products found to infringe. In deciding the damages awards, the jury had to navigate their way through a 12 page matrix of products, patents, and dates. All told, it was a formidable endeavour for the eight jurors. The jury foreman, Thomas Dunham, mused after the trial, “My next phone is going to be a landline rotary dial.” The final outcome is summarized as follows:
- Apple’s ’647 “Quick Links” patent – all accused Samsung devices found to infringe
- Apple’s ’721 “Slide-to-unlock” patent – some devices found to infringe, others cleared
- Apple’s ’959 “Universal Search” patent – no infringement found
- Apple’s ’414 “Background Synch” patent – no infringement found
- Samsung’s ’449 “Digital Camera” patent – iPhone 4/4s/5, iPod Touch (fourth & fifth generations) found to infringe
- Samsung’s ’239 “Remote Video” patent – no infringement found
- The jury did not find any of the patents-in-suit invalid
- Apple’s ’172 “Auto Correct” patent had already been ruled by Judge Koh on summary judgement to have been infringed
- Apple is awarded damages of US$119,625,000 for the three patents held infringed
- Samsung is awarded damages of US$158,400 for one patent held infringed
Each side is claiming victory. While the trial has been frequently colored as a major patent battle, it’s not living up to this… In order to streamline the case, the court required both parties to limit their contentions to five patents and 10 asserted claims each. Furthermore, for some of the asserted claims, not all devices were accused of infringement. Given that both Apple and Samsung each own thousands of patents, this is just the tip of the iceberg.
Apple’s damages award of US$119.6 million were nowhere near the US$2.2 billion the company was asking. Some pundits attribute the trial as disappointing for Apple, to the extent that the jury awarded Apple only about 5.5% of what it had demanded. However, other comparisons can be made. Given both parties were allotted an equal number of contentions, Apple’s damages amount to a whopping 755 times the damages awarded to Samsung. The war of the numbers continues.
If we dissect the damages awarded to Apple, we find that US$98,690,625 or 83% of the total amount was awarded to the ‘647 “Quick Links” patent. Looking beyond this trial, the US$98.6 million amount awarded represents 78 times the median damages awarded in 2013 as reported by Lex Machina (2013 Patent Litigation in Review). While the calculus used to determine the damages awarded has not been publically disclosed, we can draw some rough royalty approximations. If we use the damages expert’s number of 55 million infringing Samsung device , this amounts to approximately $1.79 in royalties per device for this one particular feature! Putting aside the legal wranglings and mindshare for public opinion – kudos to the Apple inventors of the ‘647 patent: James R. Miller, Thomas Bonura, Bonnie Nardi, and David Wright. Creative inventions that consumers value, as well as patents that protect owners and inspire innovation, are the ultimate winners.
Samsung commented after the trial, “Apple has been found to infringe Samsung’s patents. It is our long history of innovation and commitment to consumer choice that has driven us to become the leader in the mobile industry today.” This, even though the patent found infringed was not invented by Samsung and the damages awarded were practically insignificant. Will Samsung change their strategy and unleash the full potential of their portfolio? They may have to if Apple persists with its “Holy War.”
Litigations are costly; estimates are that Apple’s award will probably not exceed its expenses relating to this trial by much. Perhaps Apple will determine that further patent lawsuits won’t be worthwhile and decide to settle with Samsung. Still, Apple has lots of patents and cash. If it can find more ‘647-like patents and patents claims, then Apple has the right to assert them. Perhaps it’s a bit of deja-vu. Apple’s Macintosh was indeed revolutionary, but it ultimately lost out to Microsoft Windows and commodity PC compatibles. It took almost a decade for Apple to regain its presence. It is totally understandable if Apple decides to “give it another try.”