Apple Authorized to Seek $40 Per Device Against Samsung
March 13, 2014 4:31 PM
comment(s) - last by
Some licensing rates are roughly 20-fold what Apple is charging others
The bad news for Apple, Inc. (
) is that the U.S. federal court system appears increasingly opposed to outright denying the American gadgetmaker's largest rival --
Samsung Electronics Comp., Ltd. (
-- the right to compete in the American market.
I. Battle of the Bans
Samsung is the world's top smartphone-maker, accounting for 28.8 percent of global smartphone ships in Q4 2013, according to the Interactive Data Corp. (
). Apple is in second place and leads Samsung narrowly in profitability, despite its smaller 17.9 percent of sales.
Apple contends that Samsung has "stolen" its designs, including software features and even in case designs. The latter claim has quieted as Samsung's designs have diverged more sharply in looks from Apple's, but the former -- software patent infringement -- is perhaps unavoidable due to Apple's large mobile patent portfolio.
Lucy Koh is prepping for a second Apple v. Samsung case, which will start on March 31 with a jury trial. [Image Source: Vicki Beringer]
Last week at the
U.S. District Court for the Northern District of California
Apple's team saw their request to ban a plethora of devices -- including the Galaxy S3 and Galaxy Note --
for a second time
. Judge Lucy Koh had similar struck down a ban request in January, standing her ground
despite pressure from some of her colleagues at the Federal Circuit Court of Appeals
, which ranks a step higher than her Federal District Court.
But the good news for Apple is that its
chances of a major payday increased
when Judge Koh sided with it late last month, throwing out expert testimony of a Samsung witness, while allowing the jury in the upcoming case to hear the testimony of an Apple witness.
II. $40 per Device? Say it Ain't So!
The eye-popping figure is Apple's targeted per-device royalty -- $40 USD.
Apple's expert witness arrived at that figure by incoprorating "lost profits" into the valuation estimate, and also by arguing that Samsung's strong position makes it reasonable to seek larger damages.
[Image Source: Mevvy]
, J.D., a top lawyer at one of Apple's law firms --
(which goes by the humorous abreviation "MoFo") -- argues that while her client agreed to a relatively small licensing settlement with a battered HTC Corp (TPE:2498), that the Samsung case was an entirely different monster. HTC's CEO Peter Chou indicated his company
pays Apple around $5 USD per device
, although the precise figure has not been made public.
Ms. Krevans argued:
HTC is not one of the horses in the two-horse race. There is no showing that has been made that any of these terms would have been terms that would have been acceptable in a hypothetical negotiation.
One of Samsung's lawyers --
of the law firm
Quinn Emanuel Urquhart & Sullivan, LLP
-- complained that Apple was looking to charge his client $12.49 USD/device for a patent that was priced at $0.60 USD/device in its stalled legal war with Motorola Mobility (who was formerly owned by Google Inc. (
)). He argued that 20-fold markup was information the jury needed to know, arguing that such information had never been excluded before in such a case. Apple disagreed, saying that giving the jury more information might confuse them about Samsung's guilt.
Mr. Watson complained:
The only reason Apple is bringing this motion is because the licensing data is completely inconsistent with the idea that anyone would pay $40 for five smartphone patents per unit. Apple shouldn't be permitted to just throw up a huge number and then sit down and we've got our hands tied and we can't even show the jury that it's totally disproportionate to what actually happens in the marketplace. In this case, they're asking for $12.49 [per device] for [a patent licensed to Motorola for 60 cents per device].
And I submit there's simply no Federal Circuit case, or even a district court case, where a court has excluded a license on the exact patents at issue... and the jury is not permitted to see that, and the defendant has to go to trial with no licensing evidence to show the jury at all.
But Judge Koh decided that it's time for a first, and she denied Samsung the ability to present licensing rate comparison to the jury and struck down its expert witness's opposing valuation as inaccurate. Meanwhile she gave Apple nearly unchecked ability to present its expert witness's claims.
II. Samsung Appears at a Modest Disadvantage for Round II
suffered a blow to their reputation
in court last year when they appeared to unethically leak documents of Apple's payment agreement to Nokia to Samsung executives, a disclosure that may have helped Samsung to squeeze a more favorable licensing settlement from Nokia.
The case goes on trial on March 31, and after
losing $929.7M USD
the first round
Samsung looks to
start the second trial
with the back against the wall.
[Image Source: Getty Images]
Depsite turning their backs on
a second set of mediation talks
in January, the second trial is believed to largely be a battle over settlement leverage and public image. Apple wants to
damage Samsung's American brand image
portraying it as a copycat
. And a second large verdict could do precisely that, plus elevate pressure for a higher settlement. On the flip side, an Apple loss could let Samsung off the hook.
But given the distraction the case is posing to both companies and the snail-slow pace of court proceedings, most believe that the pair will settle when the dusts drops after the second round.
While Apple's $40 USD valuation may indeed be some unfair or "ludicrous", it is not without precedent, to some extent. Microsoft Corp. (
) is believed to charge Apple and most Android device makers between
$5-10 USD per device
. But it charges Samsung a significantly higher rate --
reportedly around $15 USD per device
This article is over a month old, voting and posting comments is disabled
3/14/2014 4:21:58 PM
That's odd, how do they do less?? Please quantify??
No? Same evidence everywhere with this guy.
"JUST LISTEN TO ME AND MY BLOGS!!!, OTHERWISE YOU ARE ANGRY"
3/14/2014 4:31:21 PM
Oh how nice, Did your petty little brand get offended and you came back just to reply to me and only me? I am flattered.
Someone wants a list of things you cant get with an iPhone.
- Larger Screens
- Higher resolution screens
- Higher DPI
- Better Edge to Edge display (no giant iBezel)
- Micro SD card
- Removable batteries
- Mini HDMI port
- Can set default apps
- Back button
- Better Notifications
- Better Voice search (Google Now > Siri)
- Better Mapping software
- Live wallpaper
- Plays HD content without downscaling
- Greater than 5x4 icons
- Multi user support
- Multi Window support
- pop up browser(in a window)
- Wireless charging
- Eye scrolling
- Waterproof models
- Air gestures
- Active stylus support
- Better OS
- Better UI
- Micro USB
- Plug and play as a flash drive to copy files
- Flexibility in OS (Tons of Custom ROM's, etc)
- Flexibility in hardware (qwerty models, waterproof models, removable batteries, larger models, smaller models, high end models, mid range models, cheap models)
Some in severe denial will balk at items on this list, but its not about the individual things that THEY may not need, again, its about flexibility to support thing that others DO need. Its a HUGE list that demands respect.
3/14/2014 5:25:31 PM
Oh, and BS... BTW on top of that MASSIVE list of things you cant do with your precious iPhone, here are 10 things that iPhone copied from Android .
I know your gonna be angry at that! But wait, Apple infvents everything. It cant be they copy! NOOOOOO!!!!
3/15/2014 10:36:16 AM
What's funny is that was written in 2011. There's way more features today they stole from Android since.
3/15/2014 11:00:23 AM
Yes but remember, its only "stealing" when others copy from Apple. When Apple copies from other it's called "improving". /s
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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