Apple and Samsung rest cases patent damages trial, jury to decide on Monday

Posted:
in General Discussion edited May 19
Lawyers in the -- maybe -- final Apple v. Samsung trial presented their respective closing arguments on Friday, with Apple fighting to persuade jurors that Samsung's infringement of two utility and three design patents is worth more than $1 billion. Samsung argues it should pay $28 million, at most.


Illustration from Apple's '087 patent.


Proceedings began with Samsung's expert witness, accountant Michael J. Wagner, who was questioned about the Korean tech giant's accounting practices, according to in-court tweets from CNET correspondent Stephen Shankland.

Specifically, Apple counsel Bill Lee in his cross examination asked Wagner if Samsung balances its sheets by tallying profits from front glass displays, bezels and other smartphone components. Wagner said "no" to each. With his line of questioning, Lee looked to prove Samsung also believes, through its accounting practices at least, that an article of manufacture is a whole phone, not its individual parts.

Samsung made $3.3 billion on the sale of 8.6 million smartphones found to have infringed Apple's design patents, Wagner said. That sum, however, takes the whole device into consideration, not specific components covered found to have infringed on Apple's IP.

It is this disagreement, over the legal term "article of manufacture," that is central to Apple's case.

In the U.S., damages in patent lawsuits are meted out based on profits from, or other financial gains made by, an article of manufacture. Prior to Apple v. Samsung, calculations were applied to whole device sales, but Samsung in a Supreme Court petition successfully argued a more modern reading of the term is needed in an age when consumer electronic devices contain hundreds or thousands of smaller components, each made by different manufacturers.

The highest court in the land agreed that article of manufacture can be construed as components of a product, a decision that when applied to Apple v. Samsung greatly reduces Samsung's onus. Instead of paying out damages based on entire phone sales, the Korean tech giant would be responsible for single components deemed to have infringed on Apple's designs.

As per Judge Lucy Koh's instructions, jurors will apply the following four rules to determine an article of manufacture:
1. The scope of the design claimed in Apple's patent, including the drawing and written
description;
2. The relative prominence of the design within the product as a whole;
3. Whether the design is conceptually distinct from the product as a whole; and
4. The physical relationship between the patented design and the rest of the product, including whether the design pertains to a component that a user or seller can physically separate from the product as a whole, and whether the design is embodied in a component that is manufactured separately from the rest of the product, or if the component can be sold separately.
For its part, Samsung argues the article of manufacture, as derived from Apple's three design patents, are a phone's round-cornered, black glass front face, surrounding rim or bezel and display screen. Apple, on the other hand, contends the patents-in-suit adequately cover the entirety of Samsung's found-infringed handsets.

Jurors will have a chance to go hands-on with prototype iPhone units to better determine the extent to which Samsung copied Apple's designs, and whether article of manufacture in this case extends beyond individual components as Apple claims.

As noted by MLex reporter Mike Swift, another bone of contention is whether Samsung can deduct research and development expenses associated with the released phones from the final damages total. Apple argues no, while Samsung says yes.

In summing up its case, Apple lawyer Joe Mueller reiterated arguments made earlier in the week.

"The fact you can pull apart a phone means absolutely nothing," Mueller said, according to Shankland's account. "The question is what did they apply those designs to. It's not a pane of glass. It's not a display screen that doesn't show a GUI. It's the phone."

Apple's expert witnesses, including former Mac designer Susan Kare, said much the same on the stand just two days ago.

Apple marketing VP Greg Joswiak and VP of industrial design Richard Howarth returned to court for today's closing arguments. In testimony delivered on Tuesday, Joswiak said Apple was "betting the company" on the success of iPhone, a point hammered home by Mueller on Friday.

"Mr. Howarth, sitting right there, was one of the two lead designers for the original iPhone," Mueller said, according to Swift. "They were really risking everything they had. They were risking everything that made Apple successful at that time."

Samsung lawyer John Quinn presented a different take on Apple's IP during his closing.

"The Apple design patents do not cover anything on the inside of the phones. They don't even cover the entire outside," he said, according to Shankland. "Under the law, Apple is not entitled to profits of any article of manufacture to which the design was not applied."

Lee was last to have a crack at the jury. In his closing argument, the Apple lawyer chided Samsung for revisiting issues decided by another jury in 2012. He also recited reactions the original iPhone design team had after seeing the infringing Samsung phones for the first time.

"Samsung wants you to believe [that] if Ford had decided to rip off the Volkswagen Beetle shape... the right article of manufacture would have been the exterior shell of the car," Lee said, according to Shankland.

Jurors were given final instructions and brief period to deliberate on Friday, but were unable to reach a verdict. They will reconvene on Monday and work toward a final judgment.

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Comments

  • Reply 1 of 30
    9secondkox29secondkox2 Posts: 400member
    Samsung is so clueless. They admit they stole but then they want to set the terms of restitution. It doesn’t work that way. 

    Then they try to set a price on “only the infringing components and not the total smartphone.”

    thats the whole point - that those complete smartphones wouldn’t have sold like that had they not infringed. So yes, the whole cost is included. 

    Samsung had stuff like the Instinct, etc before they blatantly ripped off apple. And the rip-off is what gave them footing in the market so it could be argued Samsung owes Apple far more than Apple is asking. 


    Avieshekracerhomie3olsvukasikarob53bshankberndoglkrupppatchythepiratecornchip
  • Reply 2 of 30
    IreneWIreneW Posts: 110member
    Isn't this question a little similar to the Qualcomm and Ericsson cases, regarding if royalties are to be based on final product value or component cost?
    edited May 19
  • Reply 3 of 30
    wonkothesanewonkothesane Posts: 1,223member
    Samsung is so clueless. They admit they stole but then they want to set the terms of restitution. It doesn’t work that way. 

    Then they try to set a price on “only the infringing components and not the total smartphone.”

    thats the whole point - that those complete smartphones wouldn’t have sold like that had they not infringed. So yes, the whole cost is included. 

    Samsung had stuff like the Instinct, etc before they blatantly ripped off apple. And the rip-off is what gave them footing in the market so it could be argued Samsung owes Apple far more than Apple is asking. 


    I’m a complete layman from a legal perspective, but trying to apply common sense I lean to your argument:

    even if Samsung infringed “only” on component level, the consumer doesn’t buy components, but devices. So any loss of device sales on Apple’s side as well as any additional sales on Samsung’s side should be the reference for damages. I k ow, hard to impossible to quantify precisely, but I’m sure you could get ballparks, Eg by comparing sales right before and after introduction of Samsung’s infringing devices on the market. Another way might have been simply surveys on owners as to what were reasons to buy/not buy, or how important the features in question were in the buying process. 
    jkichlineclaire1watto_cobra
  • Reply 4 of 30
    racerhomie3racerhomie3 Posts: 683member
    In order to set a precedent ,I hope the judges give Samsung at least a $5 Billion fine. At the minimum should be $1 Billion.
    bshankberndogclaire1patchythepiratewatto_cobraradarthekat
  • Reply 5 of 30
    palegolaspalegolas Posts: 1,270member
    The Samsung vs Apple trials is a bag of hurt.
  • Reply 6 of 30
    jkichlinejkichline Posts: 1,296member
    What Samsung fails to realize is that the entire phone has to be designed and completely rethought in order to fit into the design. The whole notion of a single display without a physical keyboard was a radical concept at the time. Samsung would like you to think design is how something looks. No, design embodies the entire piece as a whole.
    rob53claire1cornchipwatto_cobraradarthekatStrangeDays
  • Reply 7 of 30
    gatorguygatorguy Posts: 19,049member
    In order to set a precedent ,I hope the judges give Samsung at least a $5 Billion fine. At the minimum should be $1 Billion.
    There are no fines. The damages award cannot exceed the revenue derived from the infringing devices and that's already a known figure. The only remaining question is how much revenue Samsung is entitled to keep from those infringing US (only) handset sales.
    edited May 19 revenant
  • Reply 8 of 30
    nunzynunzy Posts: 662member
    Samsung should pay all revenue. If they hadn't copied Apple, they would have sold zero phones.
    racerhomie3bshankberndogclaire1chasmradarthekat
  • Reply 9 of 30
    LucioguidoLucioguido Posts: 9unconfirmed, member
    The logistics of what Samsung is arguing, if applied to society at large, would just obliterate a functional society. 

    Basically, Samsung is saying that if you steal something, and use the stolen good to make billions of dollars, the most you can get in trouble for is the amount you should’ve paid to begin with. 

    So, in this system, there would be no incentive to pay for anything, ever. Basically, every single sale would have to go through courts and juries would decide fair value. Until then, everything is free. There’s no reason to worry about stealing, the worst that can happen to you is you pay what the company was legally determined was a far asking price back when you stole it. 
    racerhomie3bshankretrogustoclaire1chasmpatchythepiratewatto_cobraradarthekat
  • Reply 10 of 30
    rob53rob53 Posts: 1,902member
    IreneW said:
    Isn't this question a little similar to the Qualcomm and Ericsson cases, regarding if royalties are to be based on final product value or component cost?
    Similar but that suit is about components not about the design of a complete product. Apple was restricted to the number of patents it could sue Samsung over which pushed the trial in Samsung’s favor. As was mentioned in closing, this suit should have been addressed the same way if Ford ripped off the Beetle design. That’s how radical the difference was between the iPhone and other phones of the time (with very few exceptions, none of them by Samsung). Once the iPhone was released, with nobody preempting the announcement with rumors, everyone copied the design, not just Samsung. Apple did all the R&D work and all the leeches took advantage of a broken patent system. Samsung made the most of the situation and $1B isn’t enough restitution but Koh already messed things up so that money is already gone in legal fees.  
    claire1watto_cobra
  • Reply 11 of 30
    macxpressmacxpress Posts: 4,544member
    Whatever the decision is...the defeated side will be appeal and the case will continue on!
    lkrupp
  • Reply 12 of 30
    lkrupplkrupp Posts: 6,295member
    In order to set a precedent ,I hope the judges give Samsung at least a $5 Billion fine. At the minimum should be $1 Billion.
    Well, first of all it’s a jury who will decide the amount, not the judge. And we all know how squirrelly juries can be. There have been a couple of articles about the difficulty of finding an impartial jury in Silicon Valley where the trial is being held and it seems the place is teeming with Android and Apple fanboys that hate the companies involved respectively. So anything can happen at tis point.
    watto_cobra
  • Reply 13 of 30
    silvergold84silvergold84 Posts: 22unconfirmed, member
    Look at the Samsung smartphones before iPhone and after it. Samsung copied the external design and the software design , the way to interact with the smartphone. No more pencil or keyboard , icons on grid ecc ecc. So they offered similar experience of use with a low price: but that is been possible only thanks to violations of Apple patents. So samsung have to pay for that. And what Apple ask is the minimal. They have right to have 1 billions dollars 
    claire1patchythepiratewatto_cobraradarthekat
  • Reply 14 of 30
    nunzynunzy Posts: 662member
    Look at the Samsung smartphones before iPhone and after it. Samsung copied the external design and the software design , the way to interact with the smartphone. No more pencil or keyboard , icons on grid ecc ecc. So they offered similar experience of use with a low price: but that is been possible only thanks to violations of Apple patents. So samsung have to pay for that. And what Apple ask is the minimal. They have right to have 1 billions dollars 
    It was worse than that. Google stole iOS and renamed it Android. It is a stolen OS. And Google tried to kill iPhone, but Steve wouldn't let them.
    claire1patchythepiratewatto_cobraradarthekat
  • Reply 15 of 30
    retrogustoretrogusto Posts: 654member
    The logistics of what Samsung is arguing, if applied to society at large, would just obliterate a functional society. 

    Basically, Samsung is saying that if you steal something, and use the stolen good to make billions of dollars, the most you can get in trouble for is the amount you should’ve paid to begin with. 

    So, in this system, there would be no incentive to pay for anything, ever. Basically, every single sale would have to go through courts and juries would decide fair value. Until then, everything is free. There’s no reason to worry about stealing, the worst that can happen to you is you pay what the company was legally determined was a far asking price back when you stole it. 
    I agree with this 100%, and I think it’s a really important point. For certain types of theft, there is very little incentive to follow the law, because the potential for punishment is so limited, and a more appropriate punishment would be so astronomical that it is never even considered. This happens sometimes when big banks do shady things too. The punishment should always incorporate a punitive element, otherwise the absolute worst-case scenario is you break even. Not much of a gamble.

    But I don’t agree with the people who think that Samsung is making these arguments because they are clueless or they see things differently—they are making these arguments because a calculation has been made that this is the strongest argument anyone could come up with to support their actions. I’m sure they have known all along that they were doing something illegal, and I bet they still feel pretty good about it, given that they have been very successful in a tough competitive landscape. Even a billion-dollar fine would be just a slap on the wrist in the larger scheme of things. It’s the cost of doing business. 
    Lucioguidoclaire1watto_cobra
  • Reply 16 of 30
    tallest skiltallest skil Posts: 43,399member
    gatorguy said:
    The only remaining question is how much revenue Samsung is entitled to keep from those infringing US (only) handset sales.
    0%.
    RonnnieOnunzyclaire1watto_cobra
  • Reply 17 of 30
    analogjackanalogjack Posts: 1,043member
     I have a feeling that Cook being seen to be playing nice with Trump will mitigate any residual Apple animosity that certainly will be present in some of the jurors. Why do I say this, just call it a hunch, I somehow equate Android and Samsung users with being sympathetic towards Trump as a very loose generalisation of course, crazy I know but these are crazy times. I think this is going to work out well for Apple. 
    watto_cobra
  • Reply 18 of 30
    gatorguygatorguy Posts: 19,049member
    gatorguy said:
    The only remaining question is how much revenue Samsung is entitled to keep from those infringing US (only) handset sales.
    0%.
    I'm leaning that way myself. 
    nunzy
  • Reply 19 of 30
    anantksundaramanantksundaram Posts: 18,649member
    The jury will uphold. Samsung will appeal. Rinse. Repeat. 

    Wake me up in 2040. Yawn. 
    cornchipwatto_cobra
  • Reply 20 of 30
    Rayz2016Rayz2016 Posts: 4,040member
    The logistics of what Samsung is arguing, if applied to society at large, would just obliterate a functional society. 

    Basically, Samsung is saying that if you steal something, and use the stolen good to make billions of dollars, the most you can get in trouble for is the amount you should’ve paid to begin with. 

    So, in this system, there would be no incentive to pay for anything, ever. Basically, every single sale would have to go through courts and juries would decide fair value. Until then, everything is free. There’s no reason to worry about stealing, the worst that can happen to you is you pay what the company was legally determined was a far asking price back when you stole it. 
    This is an interesting point. The worry here is the precedent that would be set if they’re allowed to get away with this. 

    In the U.K. it’s been known for some time that due to government underfunding, the police can no longer afford to investigate what they see as “low level” crime: burglaries, shop break-ins …
    The result of this is that criminal gangs don’t go in for big news-breaking crimes such as bank robberies; they’re now focusing on robbing domestic properties and company premises because they know that there is little chance of the police sending anyone to investigate. 

    If Samsung is allowed to argue this then intellectual property theft will switch to the component level, if it hasn’t already. 

     I mean look at Android. It’s not the theft of a whole operating system; it’s lots of components stolen from different places. 
    edited May 21 Hyperealityradarthekat
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