Samsung argues Apple has not proved damages
APPLE is claiming that more than a quarter of Samsung’s $30.4bn in US smartphone and tablet sales result from copying the iPhone and iPad or infringements on other patents, a damages expert for the US company said on Monday. Apple is demanding up to $2.75bn in damages, which includes profits lost to infringing Samsung gadgets. Samsung attorneys argued Apple’s evidence was not sufficient for such an award.
The Korean company sold more than 87-million mobile devices from mid-2010 to March this year, according to court documents. Accountant Terry Musika, citing Samsung records and testifying as an Apple expert witness, estimated that $8,16bn in revenue, or 22.7-million of total unit sales over that two-year period, came from products that infringed on Apple patents, such as the first Galaxy S smartphone in July 2010. Samsung earned about a 35.5% gross profit margin on that revenue, Musika said.
"It’s not me sitting at a desk with a calculator," Musika, a former KPMG and PricewaterhouseCoopers accounting partner, told the court. "There are literally hundreds of millions of calculations," he said. It took more than $1.75m to employ 20 programmers, accountants, statisticians and economists to work out damages.
But Samsung argued that Apple, which was struggling to keep up with demand for the iPhone 4 from July to October 2010, did not have the capacity to have delivered on those additional sales. "Apple couldn’t service its own customers with the iPhone 4, but it could service customers it didn’t have?" Samsung attorney Bill Price asked Musika. Price also argued the damages should vary depending on whether the Samsung products infringed on just one or all of Apple’s patents.
The trial continues to offer glimpses behind Apple’s secretive operations, from its industrial design process to its product marketing machine. On Monday, an Apple executive testified that the company had licensed prized design patents to Microsoft but with an "anticloning agreement" to prevent copying of its iPhone and iPad.
Apple had reached out to Samsung in 2010, hoping to strike an agreement with its Korean rival on patent licensing before their dispute hit the courts, patent licensing director Boris Teksler said.
Teksler testified that Apple offered a clutch of patents for licensing but, crucially, viewed patents related to what he called the "unique user experience" as a highly protected category. Those included design patents at issue in the lawsuit, covering the look and feel of the iPhone and iPad. Teksler told jurors last week that he could count "on one hand" the instances Apple has licensed those patents.
Negotiations between Apple and Samsung did not produce a licensing agreement and Apple filed a lawsuit in April last year. Apple’s decision to license its design patents to Microsoft was consistent with its corporate strategy, Teksler said, because the agreement prohibited Microsoft from manufacturing copies. "There was no right with respect to these design patents to build clones of any type."
Apple finished presenting evidence on its own patent claims on Monday and Samsung began calling witnesses. US District Judge Lucy Koh said she hoped the attorneys would be able to present closing arguments next week.
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