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Jury Goofs Blamed as Judge Tosses|$1 Billion Award in Apple-Samsung Fight

SAN JOSE, Calif. (CN) - A federal judge halved a $1 billion jury award in the Apple-Samsung patent fight Friday, faulting the jury for not following her instructions.

After just 21 hours of deliberations last summer, a nine-person jury found Samsung had infringed a number of Apple's iPhone and iPad patents to produce its Galaxy line of smartphones and tablet devices. In particular, the jury found that Samsung willfully copied Apple's "bounce-back" and double-tap screen features as well as several design elements.

U.S. District Judge Lucy Koh crafted a 22-page, 700-question verdict form for jurors to guide them through the morass of both complex patent litigation and awarding the potentially billions of dollars at stake in the case.

But Koh said Friday that the jury ignored her instructions in making its award by using the calculation theories of Apple expert Terry Musika, which she had ruled as legally impermissible before the trial ended.

"In this case, it is apparent that the jury awarded 40 percent of Apple's expert Terry Musika's calculation of Samsung's profits for a wide range of products, and in some cases, added the same expert's calculation for Apple's lost profits," Koh wrote. "Moreover, it is clear that for several products, the jury awarded exactly half of the reasonable royalty award proposed by Mr. Musika. ... These numbers are 'to the dollar;' it is thus quite apparent how the jury arrived at them."

She added: "This court cannot ignore the import of these numbers, even if the evidence as a whole could have supported an award of a similar, or even higher, amount."

While Koh upheld jury awards for lost profits and design patent-trade dress apportionment - which she declined to apply until the case works its way through the appeals process - she concluded that, if the jury had followed her instructions to the letter, Samsung's bill to Apple would have been just under $600 million.

Koh also found it impossible to affirm the award on Samsung's Galaxy Prevail and 13 other products, which the jury found to infringe only utility patents. In fact, she said the jury's mistakes were so grave that she ordered a new trial on the products.

"As the court instructed the jury, infringer's profits are not a legally permissible remedy for utility patent infringement," Koh wrote. "Accordingly ... it is apparent that the jury failed to follow the court's instructions on the law, and awarded damages based on a legally impermissible theory. This award cannot stand."

She continued: "The jury's award was apparently based on Samsung's profits, which is an impermissible type of compensation for utility patent infringement. Thus, rather than including some identifiable portion of excess, such as particular sales for which there should have been no damages, the entire award was tainted. Further, the jury did not award the full amount Apple requested for Samsung's lost profits, but rather awarded only 40 percent of Apple's requested amount of $142,893,684. Thus, it does not appear that awarding the full amount that Apple requested for either of the two permissible forms of compensation for utility patents (Apple's lost profits, for which Apple requested $8,573,370, or a reasonable royalty, for which Apple provided no calculation), which is the usual method for calculating a remittitur, could reasonably be thought to represent the jury's award, stripped only of the impermissible excess. Accordingly, the court cannot reasonably and fairly calculate an appropriate remittitur. Nor can the Court, having identified the impermissible legal theory on which the jury made its award, turn a blind eye or 'bend over backwards' to find a possible permissible justification for the amount awarded."

Koh encouraged both companies to "seek appellate review of this order before any new trial."

Both Apple and Samsung have already appealed numerous aspects of the trial to the Federal Circuit, a Washington, D.C.-based court that handles patent cases. A second trial - on Samsung's claims that Apple products infringe its patents - is also slated to begin in Koh's courtroom next year.

The San Jose suit is one of several between the companies, which are waging a global war that spans five continents for technological domination.

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