Platforms Technology

Apple Samsung patent war may cause $2.5 Billion damages

Samsung vs AppleApple and Samsung’s patent war has been spreading across the globe with varied results depending on the country. The California trial is going to be one of the largest decisions though as the latest public filings by both companies have shown us. This trial is going to be the big one I believe with what they are showing to be both at stake and what the winner will be awarded.

Apple’s recently filed claim shows exactly how much they need to win, not just for the financial gain that they will have but for the rights that the win will give them. There is a lot at stake here for both companies and while this will not determine a solid winner in the ongoing war between the two tech giants this will be a battle that will give one side a decisive victory.

Let’s take a look at the filing and what they say public redacted version that was released shall we?

Samsung adopted as its number one goal to [redacted]’ in the smartphone and tablet markets, and it chose to compete by copying Apple. Samsung’s infringing sales have enabled Samsung to overtake Apple as the largest manufacturer of smartphones in the world. Samsung has reaped billions of dollars in profits and caused Apple to lose hundreds of millions of dollars through its violation of Apple’s intellectual property. Apple conservatively estimates that as of March 31, 2012, Samsung has been unjustly enriched by about [redacted; presumably $2 billion] and has additionally cost Apple about $500 million in lost profits. Apple also conservatively estimates that it is entitled to over $25 million in reasonable royalty damages on the proportionately small set of remaining sales for which it cannot obtain an award of Samsung’s profits or Apple’s own lost profits, for a combined total of $2.525 billion.

So it’s hard to ignore the magic number that is listed so prominently. Apple wants $2.5 billion dollars in damages. That is a lot of money and it’s easy to get lost in the number that would make anyone take note of.

The main part of this number though comes from Apple’s claim that the amount is owed from a disgorgement of profits from products that infringe upon its design patents.

Before I continue let me explain what the above legal term means: Disgorgement is the forced giving up of profits[1] obtained by illegal or unethical acts.

So since they can’t base the amount on just part of the profits as no one can say how much of the sale was from the patents in question they are looking for all of the profits from the products in question. They are also saying in the lawsuit that as Samsung did this willingly that some of their other products may also fall into this category which would require even more money being owed to Apple.

So which patents are included in ths one? There are 4 specific ones that stick out:

  • “overscroll bounce” (or “rubber-banding”) ‘318 patent
  • “scrolling API” ‘915 patent
  • “tap to zoom and navigate” ‘163 patent
  • use of any of Apple’s design patents or trade dress rights

Apple’s patents are only looking for past reparations and not future royalties. They won’t ask for products to be pulled just a payment and a willing to work around them.

Samsung’s counter response have to do with standard-essential patents (SEPs) and three non-SEPs. These are patents that have been having an increasing amount of issues in various cases between tech companies that deal with telecom equipment and tablets that use wifi and broadband. They are in fact, the same kind of patents that Apple and Google have been talking to the US government on how they should even be addressed in situations like this. One of the key points to note though is that the SEP’s that Samsung are going after claim that the percentage that they are owed comes from the sale price of the entire device and not from the pieces of hardware in the device that the patents cover. This means they are going after a percent of a $500 device and not after $10-$100 in parts. that $400+ initial difference causes the amount that Samsung would be owed when they won this case to skyrocket, even with how low of a % that they are seeking.

The problem on comparing these is that Apple’s $2.525 billion claim is mainly based on unjust enrichment and lost profits while Samsung’s is pure patent infringement and licensing issues. It’s a circus of patents that has constantly been growing with no end in site. Apple, Samsung, Google, Microsoft, all of the big companies are having a legal war with one another and it’s the consumer that’s going to end up losing.

Related Link: FOSS Patents

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